The advice was requested by the Commission in accordance with the new Lamfalussy approach to regulating European securities markets, designed to build an integrated financial market in Europe. It is the first example of advice developed and submitted to the Commission by CESR under the new procedure.
The CESR advice covers the five substantive areas which were set out in the Commission's Mandate to CESR:
- The definition of inside information (article 1 of the Directive)
- The definition of market manipulation (article 1)
- The disclosure obligations of issuers (article 6)
- The requirements for research (article 6)
- The conditions for access to the safe harbours for share buy-backs and stabilisation (article 8)
In finalising its advice to the Commission, CESR undertook extensive consultation with interested parties. Its draft proposals were released in a consultation paper in July 2002. Two open hearings were subsequently held in London and Paris, as well as a number of national events. Around 100 written responses to the consultation paper were received from European and national federations representing financial services providers, as well as individual banks, investment services firms, asset managers, regulated markets and exchanges, financial analysts and rating agencies. Issuers, investor representatives, academics, lawyers and the media also made their views known. All public responses can be viewed on the CESR website.
In accordance with the Lamfalussy procedure, the European Commission, in consultation with the European Securities Committee and the European Parliament, will use CESR's advice as the basis for establishing complementary new EU law on Market Abuse.
Stavros Thomadakis, Chairman of the Expert Group on Market Abuse, commented: "From a European perspective, this work represents a very good example of a Level 2 framework against market abuse. CESR has sought in its advice to assemble all the indispensable elements for an efficient European regulatory framework and to achieve harmonisation. In meeting these objectives, I believe the final advice, once adopted into European Law, will contribute to strengthening investor confidence in European markets."
Arthur Docters van Leeuwen, Chairman of CESR, said: "This is the first set of advice for implementing measures of EU Directives under the Lamfalussy approach, as adopted by the European Council, the European Parliament and the European Commission. We sincerely hope that we have done our best to respond in an appropriate, sensible and well consulted manner. We stand ready to continue our contribution to a proper regulation of the Single Market for financial services, in 2003."
