engleski

The Role of CESR in EU Securities Market Law From technical advisor to sectoral supervisor

The Lamfalussy process deeply reformed law-making in financial sector, i.e. internal market of the EU. The main characteristic of the Lamfalussy model, as introduced in the 2001 Report of Wise Men Committee, is that it is a model based on comitology and extensive consultation with market participants, where committees advise and assist Commission in its regulatory policy. Since the comitology means that Parliament and Council delegated law-making powers to Commission, and subsequently to the level 2 and level 3 committees of the Lamfalussy model, it raised a justified concern to Parliament that the committees, namely the European Securities Committee (ESC) and the Committee of European Securities Regulators (CESR), will become too powerful law-making factors in financial market. It was reluctant as to whether Lamfallussy legislative technique would be able to grant expected level of transparency, legal certainty and to preserve principle of institutional balance. Indeed, CESR showed a great expansion of its sphere of influence and consequently, it exceeded the pure advisory role. Also, it occasionally acted independently and outside of the area of its competences. At the same time, it grew into a respectful institution, which opinions and interpretation of the existing legislative provisions significantly contributed to the uniform application of legislation under the EU internal market. The obstacle in achieving the complete harmonisation was the fact that recommendations and interpretations are a soft law instruments, which could not legally bind physical persons nor national supervisors. New legislative proposal made by Commission radically changes the role of CESR, by building the platform of independent national and EU supervisors, the so-called European System of Financial Supervisors (ESFS). In that new network, CESR became one of the sectoral supervisors of the EU internal market, with the power to make legally binding decisions towards market participants and national supervisors, although under strict conditions. Authors shall further explore how CESR developed from the technical advisor on level 2 and coordinator on level 3 to the sectoral supervisor.

CESR; Lamfalussy process; financial crisis; supervisor of the EU financial market; European System of Financial Supervisors;

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