In summary, the role of CESR is to :
– Improve co-ordination among securities regulators : developing effective operational network mechanisms to enhance day to day consistent supervision and enforcement of the Single Market for financial services; Having agreed a Multilateral Memorandum of Understanding (MoU) , CESR has made a significant contribution to greater surveillance and enforcement of securities activities;
– Act as an advisory group to assist the EU Commission : in particular in its preparation of draft implementing measures of EU framework directives in the field of securities;
– Work to ensure more consistent and timely day-to-day implementation of community legislation in the Member States : this work is carried out by the Review Panel under the Chairmanship of CESR’s Vice Chairman, and by the two operational groups: CESR-Pol and CESR-Fin.
The CESR Chair and Vice-Chair are elected from among the Members for a period of two years. The Committee meets at least four times a year, with expert and operational working groups of national experts meeting on a regular basis and working at a distance as necessary. CESR works with the support of a secretariat based in Paris conducted by a Secretary General.
A representative of the European Commission is entitled to participate actively in all debates (with the exeption of confidential discussions related to individuals and/or firms).
CESR submits an Annual Report to the European Commission, which is also sent to the European Parliament and the Council. The Chair of CESR reports regularly to the European Parliament and maintains strong links with the European Securities Committee.
All understandings, standards and work agreed within the Forum of European Securities Commission (FESCO) have been taken over by CESR.
The Role of CESR
The Committee of Wise Men, chaired by Baron Alexandre Lamfalussy, outlined in its report of 15 February 2001 several shortcomings in the legislative system for securities. The report proposed a four level approach with regard to the legislative process in order to solve these problems. Furthermore, the Committee proposed the creation of the European Securities Committee (ESC), which primarily has a regulatory function, and CESR which has an advisory function. The ESC and CESR were formally established in June 2001 and held their first meetings in September 2001.
The approach proposed can be summarised very briefly as follows: Level 1 measures set out the high level objectives that the securities legislation must achieve. Level 2 measures set out some of the technical requirements necessary to achieve these objectives. Level 3 measures are intended to ensure common and uniform implementation by the use (amongst others) of common interpretative guidance and standards agreed amongst regulators in CESR. Level 4 measures relate to the enforcement of the legislation. CESR is therefore particularly active in carrying out functions described under Levels 2 and 3 of the Lamfalussy process.