Community programme to support financial services, financial reporting and auditing (2010-2013)

The financial crisis which began in October 2008 has raised new questions in the area of financial supervision. The Member States and the European Commission therefore consider it necessary to review the funding arrangements of the supervisory committees in order to make them more independent. The Community programme to support financial services, financial reporting and auditing appears to be able to meet this new requirement.

ACT

Decision No 716/2009/EC of the European Parliament and of the Council of 16 September 2009 establishing a Community programme to support specific activities in the field of financial services, financial reporting and auditing.

SUMMARY

The aim of the Programme is to support the activities or actions of certain bodies in the fields of financial services, financial reporting and auditing. It applies to two types of activity:

• activities supporting the implementation of Community policies aimed at the convergence of supervisory practices;
• activities developing or providing input to the development of standards.

Beneficiaries of the Programme

The following bodies may benefit from the Programme:

• the European Financial Reporting Advisory Group (EFRAG);
• the International Accounting Standards Board (IASB);
• the Public Interest Oversight Board (PIOB);
• CEBS Secretariat Limited, based in London, which supports the Committee of European Banking Supervisors (CEBS);
• a French not-for-profit organisation, based in Paris, which supports the Committee of European Securities Regulators (CESR);
• a German not-for-profit organisation, based in Frankfurt, which supports the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS).

Other bodies may also benefit from the Programme provided they meet the following criteria:

• they must be non-profit-making legal persons which carry out activities connected with public interest and pursue an aim of general European interest;
• they must not be in the situation described in Articles 93(1), 94 and 96(2)(a) of the Financial Regulation.

Award of grants

The European Commission awards grants to the EFRAG, the IASCF and the PIOB in the form of operating grants, to cover expenses such as the running of secretariats and the remuneration of employees.

The support structures of the European supervisory committees receive funding in the form of action grants covering the following activities:

• information technology projects;
• training programmes and staff secondment schemes for staff from national supervisors;
• hosting conferences, seminars, training sessions and meetings of experts;
• preparing and issuing publications, preparation and execution of other information activities;
• carrying out research and preparing studies;
• other specific supporting activities in the field of accounting, auditing and supervisory convergence or cooperation.

The Commission awards funding in the form of grants to other bodies which have submitted an appropriate work programme and estimated overall budget.

Grant beneficiaries are obliged to indicate, on a website or in the annual report, that they have received funding from the budget of the European Union.

The financial reference amount is EUR 38.7 million for the period 2010-2013.

Monitoring procedures

The Commission shall ensure that a technical and financial report, and an activity and financial report are submitted annually by the beneficiary of the grant. It may exercise supervision and financial control, as may the Court of Auditors.

Context

This Programme is introduced as part of the period of reflection which followed the financial crisis of October 2008. This period has been marked by a range of initiatives such as the adoption of the Communication from the Commission of 29 October 2008 – From financial crisis to recovery: A European framework for action, and the establishment of the De Larosière Group of experts responsible for considering the future supervisory architecture in Europe.

At the same time, the G20 summit held in Washington on 15 November 2008 also highlighted the need to improve international coordination between financial supervisory bodies.

RELATED ACTS

Communication from the Commission of 29 October 2008 – From financial crisis to recovery: A European framework for action [COM(2008) 706 final – Not published in the Official Journal].

This Communication emphasises the need to redefine the regulatory and supervisory model of the European Union financial sector.

Last updated: 05.05.2010