Positions

EFA Policy Statement on Basel III

January 31, 2022

The European FinTech Association (EFA) welcomes the European Commission’s (Commission) proposal to review the Capital Requirements Regulation and the Capital Requirements Directive, implementing the Basel III agreement in the EU.  

The EFA broadly supports the principle of a more harmonised regulatory framework at an EU-level: It enables a functioning market for financial services in Europe, and has the potential to remove cross-border barriers for businesses and consumers. In addition, harmonised supervisory requirements and the removal of “gold-plating” on a national level create a more resilient European economy overall.

You can find the PDF version of our position here.

Ensuring a fair oversight

In the review proposal, the Commission envisages to address supervisory gaps relating to FinTech groups with banking operations in the EU. While the EFA strongly agrees with supervisory measures that would tackle fraudulent activities as well practices of misconduct in European financial services, we would like to stress the importance of ensuring that this enhanced supervision does not lead to unfair or disproportionate targeting of the European FinTech sector.

Instead, the regulations should uphold tech-neutrality, and follow the “same activity, same risk, same rules” principle. They should also aim to encourage flexible, innovative, sustainable solutions for granting credit, such as ‘buy now pay later’ (BNPL), which is emerging as a prominent way of financing in Europe, whilst supporting the objective to increase risk sensitivity of the SA-CR approach. Such parameters would allow for a level-playing field among market participants under the scope of the proposed regulation, keeping a financial services ecosystem that continues to foster innovation and competition, while also protecting financial stability and European citizens.

Safeguarding Competitiveness

The review enhances the definitions of the terms underpinning ‘ancillary services undertaking’(ASU), ‘financial holding company’ and ‘financial institution’, in Article 4, broadening consolidated supervision towards entities that fall within these criteria. The EFA understands the approach taken by the Commission, but is concerned that further clarity may be needed on the interpretation of these criteria, to ensure that certain business models are not inadvertently captured.

The European FinTech sector has been growing exponentially over the past decade, giving consumers and businesses access to innovative solutions.  In this context, the EFA believes that any additional oversight envisaged in the review should bear in mind the competitiveness of European FinTechs on a global level.

More Positions

EFA Position Paper on the Revised Payment Services Directive 2

The European FinTech Association (EFA) welcomes the European Commission’s (Commission) review of the Payment Services Directive 2 (PSD2). PSD2 has delivered a more innovative, competitive payments landscape in Europe, however, challenges remain in its implementation.

July 13, 2022

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EFA Position Paper on Open Finance

The European Fintech Association’s (EFA) vision is for European FinTechs to be the most innovative and competitive in the world, providing European consumers with solutions to meet their individual needs. If done right, the open finance framework can prove to be a game changer for the industry.

July 13, 2022

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EFA Statement on the Transfer of Funds Regulation

The European FinTech Association (EFA) welcomes the efforts of the European Commission, Council, and European Parliament on the proposed anti-money laundering package which will ensure a harmonized European framework to prevent money laundering and counter-terrorist financing (ML/TF) in the EU.

June 21, 2022

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