02 June 2009

CESR publishes key principles for the delegation of tasks between competent authorities and 3L3 report on the delegation of responsibilities

The Report gives an overview of the pros and cons of delegation of responsibilities and possible issues that need to be tackled in different directives. The Key principles deal with several aspects of the cross- border delegation of tasks.

This Report on the delegation of responsibilities gives an overview of the pros and cons of delegation of responsibilities and possible issues that need to be tackled in different directives.

 

The notion of delegation of responsibilities refers to cases whereby one supervisor, on the basis of legal texts permitting such delegation and a delegation agreement decides upon a certain supervisory matter in its own name in lieu of another supervisor, who would initially be the competent supervisor on the basis of the applicable legal and regulatory framework.

 

As a consequence, the delegator would be bound by the decision of the delegatee, and will not be entitled to challenge this decision or intervene in the decision- making process.

 

Delegation of responsibilities may take different forms. One could distinguish between different grades, which may, sometimes, occur within the same subject matter:

Ø       A simple form is the one in which delegation relates to a single/one-off determination: e.g. delegation of the decision about whether a manager is “fit and proper” may be cited as a possible example7, delegation of the approval of a prospectus for public offer of securities in accordance with Art. 13 of the Prospectus Directive, etc.

 

Ø       Ongoing supervision would result in a follow-up either of a single initial decision (e.g. does the person continue to be “fit and proper”?) or of more complex decisions (e.g. approval of internal rating based model, supervision of the financial statements of listed companies etc.) and

 

Ø       Ongoing supervision on an entire entity: all aspects of the supervision of a foreign branch are delegated by the home supervisor to the host supervisor, or referring to art. 131 of CRD, all group related powers are delegated to the home supervisor.

 

The Key principles paper is restricted to the delegation of tasks among competent authorities who are members of CESR, CEBS and CEIOPS and does not cover the delegation of responsibilities/powers/decisions. Future work of the Task Force would be focused on the delegation of powers/ responsibilities/ decisions and on the real/ practical obstacles to the delegation such as obstacles arising out of deposit guarantee schemes (differences of the schemes), crisis management, local issues such as those related to IT systems, transferability of assets etc.

 

This paper deals with several aspects of the cross-border delegation of tasks and not the delegation of tasks that can take place at the national level from the competent authority to another authority of the same Member State or from the competent authority to a third entity within the same Member State.

 

3L3 Delegation task force

Key principles

 

© CESR - Committee of European Securities Regulators