12 April 2005

CESR First Progress Report on Supervisory Convergence in Securities Markets

The Committee of European Securities Regulators (CESR) issued its first progress report on Supervisory Convergence in the Field of Securities Markets for the Financial Services Committee (FSC). The report introduces the various activities that CESR has either conducted or is developing at Level 3 under the Lamfalussy approach, in order to facilitate the day-to-day application of the FSAP directives in the area of securities. The report also includes current limits to supervisory convergence. Similar reporting to the FSC will take place once a year hereon, and will be particularly focused on CESR’s work on supervisory convergence.

With regard to the daily implementation of Level 1 and Level 2 texts, it appears that CESR and its members need more than a common willingness to succeed. CESR therefore suggests some political conditions that are necessary to support the work of CESR:

Stable relations with the European Commission, the Council Committees (in particular the FSC), the European Parliament and a commitment from Member States to provide their respective securities supervisors with the necessary authority and resources to fulfil their obligations under the FSAP directives;

A political backing of peer pressure tools developed at Level 3 that might lead to changes in national supervisory practices;

A clear focus for the future role of CESR at Level 2 and Level 3. EU Institutions have not yet expressed in detail what they expect from CESR. Support for the development of peer pressure tools and a better articulation between Level 3 and Level 4 would significantly assist.

The debate on a future EU supervisory structure should be closely connected to developments in markets: CESR advocates for an adaptive strategy where the development of EU supervisory tools should follow the rhythm of integration of securities activities in the single market.

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