Since the establishment of ESMA treasurers have been trying to get representation on the various stakeholder groups that ESMA operates. You might reasonably expect that end-users of the financial system, the non-financial counterparties of EMIR’s language, should be given appropriate stakeholder involvement. Senior corporate treasurers have since 2010 regularly applied for membership of these groups; we have been consistently rejected.

Early in the life of ESMA I raised this issue with its newly appointed chair, Steven Maijoor. I came away with the strong impression that he felt that in the approach to stakeholder involvement errors had been made and that under his stewardship this would change. Regrettably there has been no change, as exemplified by the most recent appointments to the Securities and Markets Stakeholder Group (SMSG).

We are so frustrated by this failure of stakeholder involvement on ESMA’s part that we have now launched a formal complaint to the European Ombudsman. I am in new territory here and we no doubt face a lengthy and possibly unsatisfactory process. I am however convinced for at least two reasons that we should go down this route: firstly, we should never relax our focus on the failures in Brussels and elsewhere to take proper account of the role of the real economy as end-users of the financial system; and secondly, it must always be right to shed light on some of the more absurd outcomes of EU governance – especially so if it proves to be the case here that EU political correctness rather than logic has driven the approach to stakeholder involvement.

In the last round of appointments to the SMSG, of the 30 members four were described as ‘consumers’ and five as ‘users of financial services’. Closer examination however shows that under the latter category there are only shareholder association representatives – and an additional consumer representative. No other users of financial services were successful. Ten ‘financial market participants’ were appointed but amongst these there are no representatives of purely non-financial companies. This is the pattern that we have consistently experienced with ESMA stakeholder group appointments.

The substance of our case is that ESMA has failed to ensure the balanced representation of stakeholders as required by the provisions of Article 37 (2) of Regulation 1095/2010, which established ESMA. By rejecting all the applications from non-financial counterparties and corporate treasury representatives ESMA is disregarding a relevant stakeholder group. We reference the relevance of these applications in the context of the use made by the real economy of the financial system and its inclusion within the scope of recent EU financial services legislation.

We also refer to the Ombudsman’s decision on a related complaint made against the European Banking Authority (EBA): in essence this outcome supports our view that ESMA is at fault (and has repeatedly been so) in not ensuring that there is any representation of non-financial counterparties within the category of users of financial services.

Why go down this route? For me it is the familiar tune that has been a recurring theme through all the post-crisis story of financial regulation. Too often the role of the real economy as a user of the financial system is at the outset neither understood nor given proper focus by the legislators and regulators.

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