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ABSTRACT
KEYWORDS: Lamfalussy, securities, legislation, directive, regulation, implementing measures, Commission, Council, European Parliament, European Securities Committee, CESR
The Lamfalussy process was implemented from early 2001, following the report of the Committee of Wise Men on the Regulation of European Securities Markets, chaired by Alexandre Lamfalussy. Four years on, this paper concludes that, while it is too early to assess progress in areas such as implementation and enforcement (Levels 3 and 4 of the Lamfalussy process), significant progress has been made in implementing the proposals contained in the original Lamfalussy Report. Preparation of EU legislation affecting securities markets is now more transparent, with better involvement of external stakeholders and enhanced political cooperation between all the institutions (Commission, Council and European Parliament). This has resulted in an improvement in the quality of legislation and an acceleration of the legislative process. The use of implementing measures will make it easier and faster to adapt Community legislation in the future. The process is also encouraging regulatory and supervisory convergence. Nevertheless, this paper suggests further improvements that could be made in areas such as consultation, including better involvement of consumers; timetables for transposing measures into national law; focusing more on general rules and principles in framework legislation (Level 1) and avoiding over-prescription in implementing measures (Level 2); achieving more consistent implementation across member states (Level 3); further strengthening political accountability; and strengthening efforts to foster greater understanding of the Lamfalussy process.
INTRODUCTION
In February 2001 the Committee of Wise Men on the Regulation of European Securities Markets issued their report, under the chairmanship of Baron Alexandre Lamfalussy.1 The so-called Lamfalussy Report was endorsed by the Stockholm European Council, in its Resolution of 23rd March, 2001 on 'more effective securities market regulation'2 and, following a declaration by President Prodi to the European Parliament in Strasbourg on 5th February, 2002,3 by the European Parliament.
The Lamfalussy Report set out the arrangements for a new four-level regulatory approach (see Figure 1) - which is now known as the Lamfalussy process:
* Level 1: framework EU legislation, setting out general principles, adopted by the Council and European Parliament using the co-decision procedure under Article 251 of the Treaty
* Level 2: the adoption by the Commission, assisted by the European Securities Committee...