EUROPE – The European Commission has announced the creation of two powerful new committees for securities legislation in its response to March’s European Council resolution in Stockholm calling for more effective market regulation in the EU.

The two new bodies, the European Securities Committee (ESC) and the Committee of European Securities regulators (CESR), both of which were proposed by February’s Lamfalussy report on securities market regulation, are designed to aid the Commission in the implementation of the Financial Services Action Plan for an integrated European capital market.

The Commission says the ESC, to be composed of high-level representatives of the Member States, will speed up the legislative process and advise the Commission on matters of securities policy.
The CESR, an independent advisory body composed of representatives of the national public authorities in the securities field, will advise the Commission on the technical details of securities legislation. It will also help co-operation between supervisory authorities and ensure consistent day-to-day implementation of EU legislation.

Frits Bolkestein, Internal Market Commissioner, says the creation of the committees highlights the Commission’s desire to move quickly in implementing the Stockholm European Council Resolution and the Lamfalussy proposals.
“ They represent crucial components of a new European regulatory network to build an integrated capital market in the European Union. The prize is enormous, and that is why we must complement the European Union’s political efforts with its best regulatory brains and get both working in the same direction.”

However, the two European Parliament rapporteurs for the first Lamfalussy-style Commission draft directives, Robert Goebbels, economic spokesperson for the Party of European Socialists and Chris Huhne, economic spokesperson for the European Liberal Democrats, have warned that democratic safeguards must be allied to the committees if they are to work.

The rapporteurs said there was a strict trade-off between the freedom given to the new committees and the capacity of the Parliament to put any mistakes right.
“ We want Lamfalussy, not Lamfalussy Lite,” the two announced, arguing that if there was no subsequent ability to put decisions right, such as a call-back mechanism in the event of a parliamentary majority against any proposal, then the Parliament would inevitably restrict the scope of the committees’ powers to minor matters.