22 December 2006

CESR: Market Participants Consultative Panel 18 October

The Market Participants Consultative Panel held its 12th meeting on 18 October 2006 in Paris jointly with all CESR members. The discussion included a policy discussion pertaining to the future regulation of investment funds in Europe, the evaluation of implementation of the Market Abuse Directive and developments in Clearing and Settlement.

On the future regulation of investment management the Panel had a policy discussion on the issues arising from the Expert Groups’ reports on investment management with particular regard to hedge funds activity. This discussion will help CESR in giving input to the European Commission for the forthcoming White Paper.

On the Market Abuse Directive the Panel had a discussion on aspects of implementation of the Market Abuse Directive. This discussion will provide input to the evaluation of the supervisory functioning of the MAD that CESR is currently conducting.

With regard to Clearing and Settlement the Panel was invited to comment on the recent way forward announced by Commissioner McCreevy and have a policy discussion on the role that CESR could play.

In his introduction Jeffrey Tessler started by comparing the costs of cross border equities transactions in Europe and in the US. He also mentioned how the project launched by the European Central Bank on Target 2 Securities might affect the system. Finally he noted the difference between the activities of CSDs and ICSDs and the impact of the initiative of the Commission on the industry code of conduct.

In the following discussion members of the Panel supported the clarifications about the different activities performed by CSDs and banks. As regards the various initiatives currently undertaken by the Commission and the ECB it was felt that there is not yet a clear picture about possible evolutions. Supervision of Target 2 securities raised some questions. The approach of the code of conduct was supported, with particular regard to the transparency of prices.

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