FESE response to the Commission consultations on prudential treatment of equity exposures under CRR & Solvency II Delegated Acts

Solvency II

FESE supports the Commission’s proposal for a dedicated, risk-sensitive treatment of long-term equity investments by insurers. The response advocates for recognising Type 1 funds (e.g. EuSEF, EuVECA, ELTIFs) as lower-risk when invested in qualifying infrastructure equities, and calls for safeguards to ensure supervisory consistency. FESE urges the inclusion of reverse repos and centrally cleared SFTs in the preferential capital treatment, and supports aligning Solvency II with CRR to remove regulatory barriers. The review should increase insurers’ equity investment capacity, especially in SMEs, and FESE encourages further reforms, including a review of the IORP II Directive to mobilise pension fund capital.

Capital Requirements Regulation (CRR)

FESE welcomes the Commission’s guidance on Article 495a of CRR, supporting favourable treatment for equity exposures under public legislative programmes. The response calls for a broad and inclusive interpretation of “significant public subsidies or guarantees” to ensure consistent application and reduce capital charges that deter bank participation. Legislative programmes are key to catalysing private sector involvement in long-term equity investments, aligning with FESE’s strategy for the Savings and Investments Union.