Guidance

Regulations relating to the European Supervisory Authorities and the European Systemic Risk Board

Updated 29 October 2019

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1. Stay up to date

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2. The European Supervisory Authorities and the European Systemic Risk Board

The European Supervisory Authorities (ESAs) are three regulatory agencies established by the EU in 2010, to help facilitate the development and convergence of financial services regulation and supervision across the EU.

The three agencies are:

  • the European Banking Authority (EBA)
  • the European Insurance and Occupational Pensions Authority (EIOPA)
  • the European Securities and Markets Authority (ESMA)

The European Systemic Risk Board (ESRB) was also established in 2010 to monitor the financial system of the EU in order to help prevent and mitigate the build-up of systemic risk.

The ESAs and ESRB are an important part of the EU’s joint framework for the regulation and supervision of financial services. Once the UK has left the EU, the UK will be outside of this framework. The ESAs and ESRB will no longer carry out their functions in relation to the UK. Legislation that underpins their operation or assigns functions to them will no longer be operable or appropriate in UK law. Where the EU (Withdrawal) Act (“the act”) incorporates directly applicable EU legislation related to the ESAs and ESRB into UK law, HM Treasury will use statutory instruments under the act to amend or revoke those provisions as necessary.

3. The ESA and ESRB regulations

The following EU regulations establish the ESAs and ESRB, providing the legal basis for their objectives and general functions:

  • Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC

  • Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC

  • Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC

  • Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board

As these regulations form part of directly applicable EU law, they will become “retained EU law” by operation of the act. These regulations will no longer be operable or appropriate in the UK’s regulatory regime after exit. HM Treasury therefore intends to revoke these Regulations in their entirety using a statutory instrument under the act.

The ESA regulations include powers for the ESAs to issue guidelines and recommendations to financial services firms and market participants. It will not be necessary to transfer these guidance functions to the UK regime as the UK financial regulators can already produce guidance for UK firms and market participants.

The guidelines and recommendations that have been produced by the ESAs are not retained EU law under the act and so will not form part of UK law after exit. However, the UK financial regulators will be able to communicate their expectations of firms and market participants in relation to EU guidelines or recommendations, as appropriate. The regulators intend to consult on their approach to EU guidelines and recommendations.

4. ESA functions set out in EU sectoral legislation

Where other specific functions carried out by the ESAs will need to be replicated in the UK to ensure there is a fully functioning UK regulatory regime after exit, HM Treasury will use statutory instruments under the act to transfer those functions to the appropriate UK body. These specific functions are set out in relevant EU sectoral directives and regulations. The approach to onshoring these functions is explained in the policy document published by HM Treasury on 27 June.

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