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Brussels, 19th November 2004

Securities markets: Commission seeks views on how the Lamfalussy process is working

The European Commission is inviting comments on a working document concluding that significant progress has been made in implementing the four-level “Lamfalussy approach” to securities legislation (see IP/02/195). The process, and its extension to banking, insurance and occupational pensions (see MEMO/04/110 and IP/03/1507) should therefore continue. The document also makes practical suggestions to further improve the Lamfalussy approach.

The Commission’s document is part of the 2004 review of the Lamfalussy process, which the Council of Finance Ministers discussed on 16 November (see MEMO/04/258).

The preparation of EU legislation affecting securities markets is now more open and transparent, with better involvement of external stakeholders. Political cooperation between the Commission, Council and European Parliament has been enhanced, leading to swifter and higher quality legislation. The use of implementing measures will make it easier and faster to adapt EU legislation in the future. The process is also encouraging regulatory and supervisory convergence.

It is too early to assess the implementation and enforcement of measures adopted under the Lamfalussy approach. A more thorough evaluation could take place in 2007.

Meanwhile, the working paper proposes improvements:

  1. further developing consultation processes and taking steps to obtain better input from consumers
  2. looking again at deadlines for writing measures into national law, so that there is sufficient time for implementation and for market participants to adjust to new rules
  3. strengthening efforts to foster greater understanding of the Lamfalussy process, in particular the roles and tasks of the respective levels
  4. focusing framework Directives on general rules and principles, and carefully calibrating implementing measures so as to avoid over-prescriptive regulation and/or duplicative requirements
  5. articulating more clearly the role of national supervisors (more convergent implementation), with due regard for the institutional roles of the Parliament, the Council and the Commission;
  6. Strengthening enforcement through clear, practical arrangements;
  • Renewing the mandate of the Inter-institutional Monitoring Group (see IP/03/650) and widening it to cover banking, insurance and occupational pensions, with new members and working arrangements agreed by the Institutions;
  • Intensifying regulatory dialogue with non-EU countries, in particular the United States.


Level 1 of the Lamfalussy approach consists of framework Directives or Regulations. At Level 2, four regulatory Committees assist the Commission in adopting implementing measures, ensuring that technical provisions can be kept up to date with market developments. Committees of national supervisors are responsible for Level 3 measures, which aim to improve the implementation of Level 1 and 2 acts in the Member States. At Level 4, the Commission will strengthen the enforcement of EU law.

The Commission’s paper is at:

The Commission welcomes comments on it, and on the third report of the Inter-institutional Monitoring Group, by 31 January 2005. Comments should be sent to:

All comments will be made public and posted on the Europa website unless the respondent requests otherwise.

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