On September 11, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a press release announcing the adoption of its draft report on Digital Finance.

The draft report (PE650.539v01-00), which was prepared in June, is non-binding in effect and sets out recommendations made in response to the European Commission’s Digital Finance strategy consultation. The press release welcomes the Commission’s commitment to finalizing a FinTech action plan by Q3 2020, with ECON also emphasizing European Union (EU) measures are to ensure all market participants have space to innovate, be proportional and technologically neutral and risk-based, whilst allowing for high levels of consumer and investor protection. The report further calls for the development of a common EU model to be utilized to set standards by the European Supervisory Authorities (ESAs) and international co-operation.

ECON highlights issues and recommendations within the report, including:

  • Cryptoassets: Targeted legislation changes to fill regulatory gaps, comprehensive pan-EU open-ended taxonomy for new products, common monitoring and supervisory framework.
  • Cyber resilience: Legislative changes focusing on modernization, compliance with international standards and operational resilience testing, to information and communications technology ICT and cybersecurity requirements for the EU financial sector.
  • Data: Enactment of EU legislation on privacy and data protection to monitor cross-border data flows, including to and from third countries. (However, the press release notes that the free flow of data within the EU is a necessity in the scaling-up of innovative finance).

The procedure file for the report indicates it will be under consideration of the European Parliament in its plenary session commencing between October 5 and October 8.

The ECON’s press release is available here.

The ECON’s Draft Report is available here.