European Commission Forms Securities Regulatory Committees

Washington, DC, June 11, 2001 - The European Commission recently adopted two decisions that would create a European Securities Committee (ESC) and a Committee of European Securities Regulators (CESR), as recommended by the Committee of Wise Men in its final report on the Regulation of European Securities Markets.

These committees would assist the Commission in a regulatory capacity regarding the adoption of directives and regulations. The power to adopt implementing rules would be delegated to the Commission and the ESC.

Under the decisions, the ESC would be comprised of member state representatives and the CESR would consist of senior representatives from national public authorities competent in the field of securities regulation. Because the decisions establish the committees only in advisory capacities, the Commission would propose specific legislation to define the functions of the ESC as a regulatory committee.

Under the new approach, the CESR would draft the implementing measures for a directive or regulation, which would be submitted by the Commission to the ESC in its capacity as a regulatory committee, and the ESC would vote on these rules. The CESR also would ensure consistent implementation of the directive or regulation in the member states.

The Commission would keep the European Parliament informed on a regular basis of the ESC proceedings, and would provide Parliament with all relevant documents. The Commission also would inform Parliament of any formal mandate it gives to the CESR.

Before the four-level approach suggested by the Committee of Wise Men can be fully adopted, Parliament and the Commission must determine Parliament's role under the new approach. Parliament has indicated that it must be given a greater role in implementing legislation, otherwise it would limit severely the scope of delegation in adopting implementing measures.