actions of the Financial Services Action Plan<sup>22</sup> , were drafted following the new regulatory approach described in the Lamfalussy report.

On the supervision aspect, for the first time in securities Community legislation, provisions related to the minimum powers of the competent authorities were included, respectively in Article 12 and 21 (notably possibility to require information and documents, suspension and prohibition of trading, scrutiny of information, etc.). The same approach has been used for the new proposals for an Investment Services Directive adopted in November 2002 (Article 46) and for a Transparency Obligations Directive adopted in March 2003 (Article 20). Such approach should normally contribute to greater convergence and harmonization of functions and powers of national supervisory authorities. In previous or existing EU legislation related to the financial markets, it was only required that member states should ensure that their national competent authority or authorities have the powers necessary to carry out their task. The detailed list of powers attributed to competent authorities was left to national legislation. Nowadays in its new proposals, the Commission has introduced a minimum list of rights for competent authorities in order to ensure consistency in the day-to-day application of Community legislation. Inputs from the IOSCO Report of September 1998 on “objectives and principles of securities regulation”<sup>23</sup> were used for the purpose of the definition of this minimum list of detailed powers.

Furthermore, the Commission has tackled the issue of the too numerous authorities within the European Union. In both market abuse and prospectus proposals, the principle of establishment of a single administrative competent authority to ensure application of the two directives was introduced. In the context of the prospectus proposal, the Council has agreed to a transitional period of five years for the maintaining of several competent authorities in a given member state. The issue of independence of the supervisory authority was also addressed by reference to the administrative nature of such authority. Exercise of powers or possible delegations of tasks to other entities differ in each text because of the different nature of the functions to be performed and because of the need to avoid conflict of interests. Nevertheless, different limits or safeguards are mentioned. The same approach is included in the proposal for a transparency obligations directive, where the competent authority must be the one designated for ensuring the functions provided in the prospectus directive (see Chapter 3.3.3) The Lamfalussy report has also led to a significant reinforcement of the network system of those competent authorities. In December 1997, 17 competent authorities of EEA signed a multilateral convention, and as a consequence, the Forum of European Securities Regulators (FESCO) was created. It was the first official pan-European network of securities regulator and supervisor. In conformity with its charter, FESCO oriented its work towards operational tasks. Beside elaboration of common standards not covered by Community legislation, FESCO was designed also as a pan-European network in order to strengthen their cooperation, notably in the field of market surveillance through the creation of FESCOPOL with the signature of a multilateral memorandum of understanding. However, FESCO is not a Community institution

> 22 Communication of May 11, 1999 from the European Commission “implementing the framework for financial markets: action plan” identifies a series of 42 measures that are needed in order to complete the single market for financial services.

> 23 IOSCO Objectives and Principles of Securities Regulation.

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