A notable development over the past decades has been the emergence of corporate groups which provide a wide range of financial services, incorporating traditional banking, insurance and securities – financial conglomerates.
The supervision of these financial conglomerates posed new challenges for the European Union. The supervision includes the following elements: capital adequacy, risk concentrations, intra-group transactions and internal control mechanisms and risk management processes. In addressing these challenges, the Directive 2002/87/EC, establishes harmonised rules for the supervision of financial conglomerates that operate in the EU Single Market.
From April to September 2018, the National Bank of Serbia and the Republic of Serbia Securities Commission were provided with assistance in harmonisation of the legislation with the Directive. Following an extensive analysis of the existing national legislation in the area of supervision of banks, banking groups, insurance undertakings and investment firms, proposals for adequate institutional framework for supplementary supervision of financial conglomerates were prepared.
In addition to this, the provisions of Draft Law on financial conglomerates were analysed and detailed overview of the proposed changes and amendments was prepared. Furthermore, an assessment was prepared, comprising the amendments of the Serbian sectoral legislation that should be made in order to harmonise it with the Directive.