I. Time to take stock on the markets: The financial services action plan concludes as the company law action plan rolls out

International and Comparative Law Quarterly

Volumn 53, Issue 4, 2004, Pages 999-1012

  Moloney, Niamh ^a  

^a QUEEN'S UNIVERSITY BELFAST   (United Kingdom)

Author keywords

[No Author keywords available]

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EID: 79751499752     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1093/iclq/53.4.999     Document Type: Article

References (58)

1. See, eg, P Norman ‘A crucial year for the single market’ Financial Times, Fund Management Supplement 12 Jan 2004 at 7.
2. N. Cohen and P Smith ‘Companies in record dash to eo private, Financial Times 31 Dec 2003 at 1. Record numbers of companies left European markets in 2003, taking £16 billion from the markets.
3. For a review of the ‘law matters for securities markets” debate see S Choi Law, Finance and Path Dependence: Developing Strong Securities Markets, UC Berkeley School of Law, Public Law and Leeal Theory Research Paper No 79 (2002), available online at .
4. See, eg, the 2002 London Economics Study estimating an increase of 1.1 per ceiit in GDP (London Economics, in association with PricewaterhouseCoopers and Oxford Economic Forecasting, Quantification of the Macro-Economic Impact of Integration of EU Financial Markets (2002))
5. the 2002 ZEW/IEP study finding a 0.5–0.7 per cent increase in GDP from integration of retail financial services markets (Zentrum fur Europaische Wirtschaftsforschung and Iustitut fur Europaische Politik, The Benefits of a Working European Retail Market for Financial Services Feb 2002). In May 2004 the Commission presented its first Financial Integration Monitor on the indicators of die economic benefits from financial integration and on die main trends in the European financial system. While its main message is that financial integration is progressing, progress is not the same across all market segments, with the retail sector, in particular, largely domestically-based. It noted a ‘genuine pooling of liquidity” for tradable assets (at 7) and, in die wholesale sector, the replacement of a traditional national bias by European investment horizons (at 9).
6. Commission's Ninth FSAP Report, The FSAP enters the Home Straight Nov 2003 at 1.
7. Informal Ecofin Council Conclusions, Athens, 4 and 5 Apr 2003.
8. Financial Services Authority, HM Treasury, Bank of England, The EU Financial Services Action Plan: A Guide (July 2003), at 1.
9. Commission's Eighth FSAP Report, Nine months left to deliver the FSAP, June 2003 at 10.
10. Council Regulation 1602/2002 OJ 2002 L243/1 (the IAS Regulation)
11. Directive 2001/07 OJ 2002 L41/20 (the UCITS Management Company and Prospectus Directive).
12. The Securities Consolidation Directive 2001/34 OJ 2001 L184 (SCD) consolidates the 1979 Admission to Official Listing Directive with the subsequent official listing directives which cover listing particulars disclosure, interim reporting, and disclosure of substantial shareholdings.
13. Directive 85/611 OJ 1985 L375/3.
14. Directive 89/592 OJ 1989 L334/30.
15. Directive 2003/6 OJ 2003 L96/16.
16. Directive 93/22 OJ 1993 L141/27.
17. Directive 2004/39 OJ 2004 L145/1. The scale and depth of the MIF Directive's new regime for regulating investment services and securities trading means that only a few observations can be made here.
18. Financial Analysts: Best practices in an integrated European financial market. Recommendation from the Forum Group for the European Commission services. Sept 2003.
19. Directive 2002/87 OJ 2003 L35/1.
20. Directive 2001/108 OJ 2002 L41/35.
21. See eg P Davies ‘European equity-linked funds keep growth trend’ Financial Times, Fund Management Supplement 5 Apr 2004 at 2.
22. Directive 2002/65 OJ 2002 L271/16.
23. Proposed in the Final Report of the Committee of Wise Men on the Regulation of European Securities Markets, Feb 2001 (the Lamfalussy Report).
24. See generally N Moloney ‘The Lamfalussy Legislative Model: A New Era for the EC Securities and Investment Services Regime’ (2003) 52 ICLQ 509–520.
25. Commission Directive 2003/25 OJ 2003 L337/73
26. Commission Directive 2003/124 OJ 2003 L339/70
27. Commission Regulation 2273/2002 OJ 2003 L336/37, respectively.
28. Provisional Mandate to CESR for Technical Advice on Possible Implementing Measures Concerning the Future Directive on Financial Instruments Markets. MARKT/G2 D (2003) at 5.
29. Summary Record of die 16th Meeting of the ESC, 8 Dec 2003 (ESC/46/2003). Some delegations expressed the view that Regulations should be limited to purely technical measures (at 1).
30. Summary Record of the 17th Meeting of the ESC, 28 Jan 2004 (ESC/1/2004).
31. Inter-Institutional Monitoring Group, Second Interim Report Monitoring the Lamfalussy Process, Dec 2003 at 15.
32. 15th ESC Meetine Minutes above n 28 at 2.
33. The Chairman of CESR has been quoted as saying that ‘an “unholy coalition” of lawyers, regulators and politicians had created “a lot of onerous detail” in EU legislation to create a single market in financial services”. P Norman ‘Legal brains asked to take back seat in the making, of EU financial rules’ Financial Times, Fund Management Supplement 22 Mar 2004 at 2.
34. Dec 2003 Inter-Institutional Monitoring Group, above n 33 at 1.
35. This is particularly the case at Level 2. The Commission publishes draft Level 2 measures (based on CESRs technical advice) as working documents, open for a consultation period of approximately 2 months, prior to the launch of the comitology procedure in the ESC. The transparency of the ESC goes far beyond other comitology committees: Summary’ Record of the ISth Meeting of the ESC, 17 Feb 2004 (ESC 8/2004), at 1.
36. Agendas, summary minutes, and rules of procedures are all publicly available. CESR carries out at least one round of written consultations (lasting approximately 3 months) before drafting its technical advice for Level 2 measures and frequently holds public hearings. Extensive feedback statements are provided explaining CESRs responses to market consultations. It also establishes Consultative Working Groups which advise the relevant CESR Expert Group responsible for a Level 2 mandate and is advised, more generally, by a Market Practitioners” Consultative Panel, which reflects a wide range of (largely wholesale) interests on the capital markets.
37. See, eg, the UK Financial Services Practitioners Panel Annual Report (2003) at 5–6.
38. For the banking sector see Commission Decision 2004/5 establishing the Committee of European Banking. Supervisors (OJ 2004 L3/28)
39. Decision 2005/10 establishing the European Banking Committee (OJ 2004 L3/36).
40. 18th ESC Meeting Minutes above n 37 at 2.
41. Similarly, CESR's advice with respect to investment recommendations by journalists for the Level 2 Investment Recommendations Directive was not followed by the Commission in order to avoid disrupting ‘the outcome of a very difficult compromise reached on the second European Parliament readme on financial journalists.’ Summary Record of the lOdi Meeting of the ESC. 17 Mar 2003 (ESC/17/2003) at 2.
42. Inter-Institutional Monitoring Group Dec 2003 above n 33 at 29.
43. Inter-Institutional Monitoring Group at 13.
44. See, eg, Eighth FSAP Report above n 8 at 10–11.
45. E. Rigby ‘FSA Head attacks EU finance sector plan’ Financial Times 13 Oct 2003 at 1, quoting UK Financial Services Authority Chairman Callum MacCarthy.
46. E. Rigby ‘City expected to hit bottlenecks in 2004 and 2006’ Financial Times 15 Oct 2003 at 8.
47. Summary Record of the 13th Meeting of the ESC, 19 Sept 2003 (ESC/32/2003) at 4.
48. CESR has published a roadmap for how it intends to proceed at Level 3. The Role of CESR At ‘Level3’ Under the Lamfalussy Process, Apr 2004. CESR/04–104b.
49. Modernising Company Law and Enhancing Corporate Governance in the European Union-a Plan to Move Forward COM (2003) 284.
50. The Plan's corporate governance reforms can be dated to the conclusions of the Seville European Council June 2002 which called for consideration of practices in corporate governance and auditing” as the implications of Enron unfolded. The CLAP notes that ‘[r]ecent financial scandals have prompted a new, active debate on corporate governance, and die necessary restoration of confidence is one more reason for new initiatives at EU Level’, Modernising Company Law and Enhancing Corporate Governance in the European Union-a Plan to Move Forward COM at 7.
51. Report of the High Level Group of Company Law Experts A Modern Regulatory Framework for Company Law in Europe Nov 2002.
52. Directive 77/91 OJ 1977 L26/1.
53. ‘There is little indication that the development of a European corporate governance code as an additional layer between principles adopted at the international level and codes adopted at national level would offer significant added value.’ CLAP, above n 48 at 12.
54. Reinforcing the Statutory Audit in the EU COM (2003) 286 (OJ 2003 C236/2).
55. Directive 84/253 OJ 1984 L126/20.
56. COM (2004) 177.
57. One official has been reported as saying that: ‘We are giving [the issues] of rotation and independence serious consideration because they are pertinent issues, particularly in the light of Parmalat’, D Donibey and A Parker ‘EU Audit Changes Proposed After Parmalat Scandal’ Financial Times 3 Feb 2004 at 1.
58. Other Parmalat-provoked reforms include the requirement that die group auditor takes responsibility for the audit report on the consolidated accounts of a group of companies, although the proposal is defended as ‘not a knee jerk reaction to recent corporate scandals’. Explanatory Memorandum to the Proposal, above n 56 at 2.