CESR Consults On Application Of EU Regulations

by Ulrika Lomas, for LawAndTax-News.com, Brussels

15 April 2004

Earlier this month, the Comittee of European Securities Regulators (CESR) launched a consultation paper seeking responses from market participants, consumers and end-users of financial services regulation on how regulators can fully play their part in ensuring firstly, that there is greater consistency across Europe in the process of implementation, and secondly, in facilitating greater EU-wide convergence through the application of this legislation.

Explaining the reasoning behind the consultation, the CESR observed that:

"As the European Union reaches the final stages of an ambitious programme to modernise Europe’s Financial Services Legislation, with the ultimate goal of ensuring the single market in financial services is realised, the ability of regulators to fulfil their part in working towards the realisation of this objective becomes more critical. Particularly, as consumers will need to be sure that they receive equivalent levels of protection across Europe and companies will need to know what they can expect in terms of regulation and that there is a level playing field across Europe."

It continued:

"The role of regulators in working towards the realisation of this objective was recognised by a Group of ‘Wise Men’ who proposed in June 2001 a new legislative approach for the revision of Europe’s securities legislation, at the request of the Europe’s Finance Ministers and which following approval by the European Parliament was introduced into the European Union’s decision making processes. This established what is commonly known as the ‘Lamfalussy Process’."

"This created a four level approach to the application of EU Financial Services legislation and established a role for CESR members to contribute to this legislative process both, in what is known as Level 2 of this process, where regulators are asked by the European Commission to provide advice during the development of EU legislation (known as technical implementing measures). And, in Level 3, which concerns a strengthened co-operation between (national) regulators to ensure consistent and equivalent transposition of Level 1 and Level 2 legislation. The Lamfalussy framework envisaged an active role for CESR in the field of common and uniform implementation of EU legislation."

The recently released consultation paper explores how CESR members might exercise their responsibilities within the four level framework.

It additionally establishes a number of proposals on how the Committee can develop its role in Level 3 further whilst also recognising the need for CESR to co-ordinate its execution of this role with other key players such as the Member States, responsible for transposition of EU law into national legislation and, the role of the European Commission as ‘Guardian of the Treaties’, whose function includes enforcing by law any failure to implement legislation under Level 4 of the legislative framework.

Responses to the paper are requested by June 1.

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