CESR published its 2006 report on Supervisory Convergence in the field of Securities Markets. The Committee states that obstacles to supervisory convergence with the other level 3 committees in the area of securities still exist. Also, the shift in nature of CESR’s work from the provision of advice on level 2 to the Commission to the more operational level 3 work has increased during the last year.
With regard to supervisory convergence, CESR considers that there is a need to address the following:
There continues to be a lack of clarity among Member States regarding who the relevant competent authorities under the Transparency Directive are, which may result in a delay of its timely implementation in some Member States thus diminishing supervisory convergence.
The delay in making a decision about applying rules regarding the equivalence of third countries GAAP and in particular US GAAP, is a significant risk to achieving harmonisation of treatment by CESR members of third county GAAP’s and thereby issuers who use them.
CESR finds the lack of harmonisation of sanctioning powers in relation to breaches of market integrity rules to be an obstacle to achieving supervisory convergence.
CESR set up a task force and has agreed on a number of strategically important changes for the years to come. This will include a three criteria test to establish which work CESR will undertake, ensuring an operational focus on its work.
All work will need to pass the following three part test:
Risk - the issue identified as a possible priority for supervisory convergence has to represent a significant market failure, or a repeated or major regulatory/supervisory failure.
EU Dimension – the issue identified is likely to have an EU-wide impact on market participants or end users (whether retail or wholesale), and on the smooth functioning of the single market.
Role of CESR - the issue identified as a possible priority for supervisory convergence is something about which CESR can positively do something, for example by providing input and influencing, thus creating change, or by the collective direct action of CESR members.
CESR future areas will include practical improvements to home/host collaboration, the development of IT data sharing arrangements, as well as to facilitate the application of different directives such as MiFID and Prospectus. Also, CESR will participate in the asset management modernisation debate and in evaluating the need for common approaches to takeover bids and corporate governance issues.
Report
© CESR - Committee of European Securities Regulators
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