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Brussels, 10th October 2002

Financial Markets: Inter-institutional Monitoring Group for securities markets meets for the first time

The European Parliament, the Council and the European Commission have welcomed the first meeting of the Inter-institutional Monitoring Group for securities markets on 7 October. The group is composed of six independent experts, two nominated by each institution. It has a mandate to assess the progress made on implementing the "Lamfalussy process" (see IP/02/195) which aims to create a more efficient system for the EU institutions to prepare, adopt and implement new legislation to integrate securities markets. The group is expected to report results twice a year, with its first report in Spring 2003.

Internal Market Commissioner Frits Bolkestein said: "This is the last piece in the Lamfalussy jigsaw. The Lamfalussy process gives us enormous potential for better and swifter financial legislation. The Monitoring Group will help us to make the best use of that opportunity, to keep up to speed and fulfil our commitments. It will keep all of us on our toes."

The members nominated by the European Parliament are:

  • Mr Graham BISHOP (United Kingdom), Consultant for securities markets matters

  • Mr Norbert WALTER (Germany), Deutsche Bank and former member of the "Committee of Wise Men" on the Regulation of European Securities Markets, chaired by Alexandre Lamfalussy

The Council nominated as members:

  • Mr Mario DRAGHI (Italy), Goldman Sachs, former Head of Italian Treasury and former Chairman of the Economic and Financial Committee (EFC)

  • Mrs Kari LOTSBERG (Sweden), Consultant, former State Secretary in the Swedish Ministry of Finance

The European Commission nominated:

  • Mr Michel PRADA (France), departing President of the Commission des OpĂ©rations de Bourse (COB)

  • Mr Walter VAN GERVEN (Belgium), former Advocate General with the European Court of Justice.

In its first meeting, the experts agreed that Graham Bishop should act as a Rapporteur for the first report which should be made public in Spring 2003. The experts will deal with the processes related to the forthcoming Directives on market abuse and on prospectuses, as well as the future proposals for the revision of the Investment Services Directive and for a Directive on transparency of security issuers (Regular reporting).

The Monitoring Group is the last remaining structural element which the Lamfalussy Committee recommended in February 2001 (see IP/01/215) and which has not yet been put in place.

According to the mandate agreed between the Parliament, the Council and the Commission, the Monitoring Group should :

  • assess the progress made on implementing the Lamfalussy process to secure a more effective regulatory system for securities markets; and

  • identify any possible emerging bottlenecks in this process.

This mandate may be revised as part of a full review in 2004 without prejudice as to whether the Group might continue or not after 2004. The Group should report results to the Institutions twice a year and publish them on the Internet.

A light secretariat, provided by the Commission with the full participation of the European Parliament and the Council will support the Group in preparing their reports.

Any comments for the group can be sent by e-mail to:

The recommendations of the Committee of Wise Men are centred around a four-level approach to European securities regulation, based on two new committees, the European Securities Committee (ESC) and the Committee of European Securities Regulators (CESR). This approach should allow the EU to respond rapidly and flexibly to developments in financial markets in order to achieve greater market integration and improved competitiveness. European Heads of State and Government endorsed these recommendations at the March 2001 Stockholm European Council. The European Parliament welcomed them in February 2002. The two committees were set up by the European Commission in June 2001 (see IP/01/792 and MEMO/01/213).

The four-level approach is to work as follows:

  • level 1 will consist of legislative acts, namely Directives or Regulations, proposed by the Commission following consultation with all interested parties and adopted under the "co-decision" procedure by the Council and the European Parliament.

  • at Level 2, the ESC, the future regulatory committee, will assist the Commission in adopting detailed technical implementing measures the nature and extent of which should be decided by Level 1 legislation. CESR will provide technical advice to the Commission on these implementing measures following a Commission mandate.

  • level 3 measures will have the objective of improving the common implementation of Community legislation (Level 1 and 2 acts) in the Member States. The CESR will have particular responsibility for this.

  • at Level 4, the Commission will strengthen the enforcement of Community law.

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