EC published its communication, to the European Parliament and the Council, to provide guidance on the existing EU rules for treatment of cross-border EU investments. The EC communication will help to prevent member states from adopting measures that infringe EU rules and assist investors in invoking their rights before administrations and national courts. It will also help legal practitioners to apply the EU rules. Additionally, EC published questions and answers (Q&A) on the communication issued by EC.
The communication aims to strengthen the business environment for EU investors. This is a crucial element in supporting more investment in the EU Single Market. EU investors can no longer rely on intra-EU bilateral investment treaties (intra-EU BITs). As EC has consistently stated, these treaties are illegal because they overlap with the EU single market rules and discriminate between EU investors. The communication provides the following clarifications:
- The free movement of capital, services, goods, and workers in the EU Single Market are fundamental freedoms for EU individuals. They give companies and citizens the right to establish a business, invest in a company, and provide services and goods across European borders. EU investors are also protected by general principles of non-discrimination, proportionality, legal certainty, and protection of legitimate expectations.
- Investor-State arbitration between a member state and an investor from another member state is incompatible with the EU law, including through intra-EU BITs. EU law already offers a comprehensive and effective legal framework, including remedies, to intra-EU investors when they invest in another member state.
- The EU law allows for markets to be regulated to pursue legitimate public interests such as public security, public health, social rights, consumer protection, or the preservation of the environment, which may have negative consequences for investors. Public authorities of EU and the member states have a duty and a responsibility to protect investments and to regulate markets. Therefore, EU and member states may take legitimate measures to protect those interests.
Keywords: Europe, EU, Securities, Cross-border Investments, Capital Markets Union, Q&A, Guidance, EC
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.