Resolution of the European Council

of 23 March 2001

on more effective securities market regulation in the European Union

(2001/C 138/01)

THE EUROPEAN COUNCIL, meeting in Stockholm on 23 March 2001,

CONSIDERS THAT:

Financial markets play a crucial role in the overall economy of the European Union. Rapid implementation of the prioritised "Financial services action plan" is therefore of utmost importance. The creation of a dynamic and efficient European securities market is an essential element of this strategy.

Every effort should be made by all parties concerned to implement key steps for achieving an integrated securities market by the end of 2003, including notably the priorities set out in the report by the Committee of Wise Men on the regulation of European securities markets, and recognising also the need for further convergence of supervisory practices and regulatory standards.

To achieve this the legislative process must be speeded up. The regulation of securities markets needs to be sufficiently flexible to be able to respond to market developments and to ensure that the European Union is competitive and can adapt to new market practices and regulatory standards, while respecting the requirements of transparency and legal certainty.

This can and must be achieved whilst fully respecting the Treaty provisions, the prerogatives of the institutions concerned and the current institutional balance,

HAS THEREFORE RESOLVED AS FOLLOWS:

(1) The European Council welcomes the report of the Committee of Wise Men on the regulation of European securities markets. The proposed four-level approach (framework principles, implementing measures, cooperation and enforcement) should be implemented to make the regulatory process for European Union securities legislation more effective and transparent, thus improving the quality of the legislative measures proposed. This process should take full account of the conceptual framework of overarching principles set out in the report.

(2) The Commission is invited to make use of early, broad and systematic consultation with the institutions and all interested parties in the securities area, in particular strengthening its dialogue with consumers and market practitioners.

The Commission is asked, without prejudice to its right of initiative, to give the Council and the European Parliament an opportunity to comment at an early stage, for the purpose of improving the efficiency of the process, on the distinction between the essential elements and the supplementary and technical provisions.

(3) The split between framework principles (level 1) and implementing measures (level 2) should be determined on a case-by-case basis in a clear and transparent way. The split will be decided by the European Parliament and the Council on the basis of the Commission's proposals. The Commission is invited, when it presents its proposals, to give indications as to what kind of implementing measures is foreseen. All parties would then know in advance the precise scope and purpose of the provisions pertaining to each of those levels. All institutions involved need to respect the basic conditions of the split-level approach.

Level 2 implementing measures should be used more frequently to ensure that technical provisions can be kept up to date with market and supervisory developments. Deadlines should be set for all stages of level 2 work.

In formulating its proposals, the Commission is invited to consider more frequent use of regulations where this would both be legally possible and would help to speed up the legislative process. The European Council takes a positive view of the possibility within the co-decision procedure of allowing for speedy adoption of acts (fast track procedure).

(4) The European Council welcomes the intention of the Commission immediately to establish a Securities Committee of high level officials from Member States, chaired by the Commission. The Securities Committee, acting in its advisory capacity, should be consulted on policy issues, in particular, but not only, for the kind of measures the Commission might propose at level 1.

(5) Subject to specific legislative acts proposed by the Commission and adopted by the European Parliament and the Council, the Securities Committee should also function as a regulatory committee in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(1) to assist the Commission when it takes decisions on implementing measures under Article 202 of the EC Treaty.

The European Parliament will be informed on a regular basis by the Commission of the Securities Committee's proceedings, when this committee is acting under the regulatory procedure, and receive all relevant documents. If the European Parliament resolves that the draft measures submitted by the Commission exceed the implementing powers provided for in the framework legislation, the Commission commits itself expeditiously to reexamine those draft measures, taking the utmost account of the Parliament's position and stating its reasons for the action it intends to take.

The European Council notes that within the framework of the comitology Decision 1999/468/EC, the Commission has committed itself, in order to find a balanced solution for those cases of implementing measures in the field of securities markets acknowledged in the light of discussions to be particularly sensitive, to avoid going against predominant views which might emerge within the Council, as to the appropriateness of such measures. This commitment will not constitute a precedent.

(6) The European Council welcomes the intention of the Commission to formally establish an independent Regulators Committee, as proposed in the report of the Committee of Wise Men. It should be chaired by a representative of a national supervisory authority. It should set out its own operational arrangements and maintain close operational links with the Commission and Securities Committee. It will act as an advisory group to assist the Commission in particular in its preparation of draft implementing measures (level 2). Each Member State will designate a senior representative from the competent authorities in the securities field to participate in the meetings of the Regulators Committee.

It should consult extensively, in an open and transparent manner, as set out in the final report of the Committee of Wise Men and should have the confidence of market participants.

National regulators and the Regulators Committee should also play an important role in the transposition process (level 3) by securing more effective cooperation between supervisory authorities, carrying out peer reviews and promoting best practice, so as to ensure more consistent and timely implementation of Community legislation in the Member States.

The European Council welcomes the intention of the Commission and the Member States to strengthen enforcement of Community law (level 4).

(7) An interinstitutional monitoring system should be set up to assess the progress made on implementing these proposals to secure a more effective securities market regulatory system, identifying the bottlenecks. Regular reports will be made to the institutions as part of this monitoring process.

(8) The new regulatory structure should be operational from the beginning of 2002 at the latest and there will be a full and open review in 2004.

(1) OJ L 184, 17.7.1999, p. 23.