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04 July 2011

Summary record of the 75th meeting of the European Securities Committee on 24 May 2011


First published today, this summary record covers the following topics that were on the meeting agenda: ESC and Expert groups, CDS, MAD and MiFID, and social businesses.

ESC and Expert groups

The Commission services updated the ESC Members on Expert Groups in the securities field and on changes affecting the format and role of current ESC meetings after the Lisbon Treaty. The future framework for the exercise by the European Commission of its powers to adopt implementing and delegated acts and the relationship with the old comitology procedures was briefly explained.

Several Member States enquired about the composition and nomination of Expert Groups, the quality of these experts and the budgetary implications. Two Member States asked for clarification on the interaction between the old comitology procedures and the new 182/2011 Regulation. Other ESC members stressed that representatives of the private sector should be excluded from Expert Groups.

ESMA and one Member State representative asked the Commission about the future role of ESMA in relation to delegated acts. Finally, the ESMA and ECB representatives wondered whether their observer roles would be preserved also in the Expert Groups.

MAD and MiFID

The Commission services updated the ESC Members on the possible future options regarding the legal instruments for MiFID and MAD. The Commission services briefly explained the cost-benefit analysis conducted in relation to the possible amendments to the current MiFID through a Regulation and a Directive, and the repeal of the current MAD by a Regulation.

The representatives of three Members States claimed that the current MAD provisions are strictly related to the different national criminal regimes and case law, and therefore asked for some clarification on the interaction of a Regulation with the different national legal systems. The representatives of three other Members States asked whether the analysis on MAD had been conducted within the broader framework of the horizontal exercise of the Commission's Communication of December 2010 on sanctions. They also claimed that a Regulation should not weaken the prohibitions and requirements existing in the Member States. Another representative supported the Commission services' approach, subject to the conditions that the prohibitions and requirements of the Regulation being precise and that the possibility of combining administrative and criminal sanctions remains. Two other members urged the Commission services to consider the cost implications for the stakeholders and the public administrations of transforming MiFID and MAD in Regulations.

Central Securities Depositaries

The EU Commission services recalled that the project to regulate central securities depositories (CSDs) was put on the agenda of the EU Commission for September 2011. They recalled in particular that the purpose of the draft text was to regulate not only CSDs but the settlement cycle at large, with a particular focus on safety aspects (including international standards applicable to CSDs as well as settlement discipline for participants). Level playing field between Member States was an important parameter since the harmonisation of the notary function undertaken by CSDs should not infringe on domestic corporate laws. Last, the legislation would facilitate the consolidation of the very fragmented CSD market (30 CSDs) and that the general "freedom" of access to CSDs provided by MiFID should be progressively moved into a "right" of access.

In response to two Member States asking whether the future CSD legislation would be adopted together with the envisaged Securities Law Directive (SLD), the Commission services recalled that the two pieces of legislation are to one extent complementary, in particular because they both address the integrity of the issue. The Commission services are therefore currently working on articulating the overlaps between CSDs and SLD. On the other hand they also address structurally different issues. The most important thing is to ensure consistency in substance. In response to another Member State asking whether a particular status would be considered for International CSDs (ICSDs), the Commission services answered that it is important to provide for a single framework for both CSDs and ICSDs. It acknowledged that the two existing ICSDs are more advanced than the other 30 CSDs, especially because they are dedicated to the Eurobonds market and obey a different logic concerning the settlement of the cash leg of their transactions.

Social business initiative – social investment funds

The Commission services presented the work programme on venture capital and social business ventures. Both initiatives were presented in the wider context of a post-crisis orientation on growth and competitiveness. While the focus on venture capital and social business was welcomed, most Member State interventions stressed that the overall coherence on EU rules on asset management should not suffer as more "thematic" approaches to fund legislation emerge.

One Member State representative wanted a precise demarcation between the new rules governing venture capital and the general rules applicable to alternative investment funds (AIFMD). Another stressed that the "better treatment" envisaged for venture capital needed to be carefully reasoned, especially since a venture capital fund would obtain an EU management passport on the basis of a simple registration, whereas all other funds would need to "opt-in" to the strict rules of AIFMD to benefit from a management passport. It was also argued by another representative that special rules for a registration-only passport might be contested by private equity firms who might argue that their activities should be treated more akin to venture capitalists than to hedge funds.

Press release



© European Commission


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