About Us
In the European Commission.s Financial Services Action Plan of May 1999 strategic objectives were set out to create an integrated EU capital market by April 2004 (a single EU financial services market, by open and secure retail markets, state-of-the-art prudential rules and supervision).

The Committee of Wise Men expressed the view that all European services and securities legislation should be based around a conceptual legislative framework of essential principles. These consist of so-called level 1 principles, which should be incorporated in new types of directives or regulations in the field of securities which are to be decided by normal EU legislative procedures (i.e. proposal by the Commission to the Council of Ministers/European Parliament for co-decision procedure). The nature and the extent of the technical implementing measures that should be taken at level 2 have to be specified in these EU directives and regulations. Moreover, the European Commission should inform the European Parliament on any of these level 1 proposals and seek understanding with the European Parliament on the scope of level 2 implementing measures. Furthermore, the European Commission should consult, beforehand, with market participants, end-users (issuers and consumers), Member States and their regulators on any level 1 legislative proposal.

With respect to level 2, the Committee of Wise Men proposed a working method for CESR, the European Commission and the European Securities Committee (ESC) to define, propose and decide on the technical implementing measures of level 1 directives and regulations. Firstly, the European Commission, after consultation with the ESC, asks CESR to draw up technical advice for the implementing measures on the basis of a clear mandate. CESR then sends its formal advice to the European Commission following a consultation with the market practitioners, consumers and end-users on its draft advice. Subsequently, the European Commission presents a proposal for technical implementing measures to the ESC taking into account the technical advice of CESR. In the meantime, the European Commission also ensures that the European Parliament is fully informed of all these proposed measures. After approval by the ESC of these implementing measures, the Parliament is given one month to consider if the proposed technical implementing measures approved by the ESC should be formally adopted by the European Commission.

Level 3 concerns a strengthened cooperation between (national) regulators to ensure consistent and equivalent transposition of level 1 and level 2 legislation. This requires clearly an active role of CESR in the field of common and uniform implementation of EU legislation. CESR fulfils this role by producing administrative guidelines, interpretative recommendations, common standards, peer reviews, comparisons of regulatory practice to improve consistent application and enforcement of the legislation or the standards concerned.

Strengthened enforcement of the Community rules is identified by the Lamfalussy report as level 4. This is primarily the responsibility of the European Commission but the report pointed out that Member States, regulators and the market participants have an important role in supplying information to the European Commission about any potential infringement of Community rules.

CESR has close relationships with European Institutions which are reflected in the fact that CESR was established following Resolutions from both the European Parliament and the Council, followed by a Decision by the European Commission. However, the range of these institutional links has expanded during the past couple of years.

Our primary relationship is with the European Commission, which is present in almost all CESR activities. In addition, CESR is called to report on its activities or asked to provide advice to the Council and appear before the EU Parliament.

CESR is now invited to contribute to the bi-annual analysis on macro-economic trends of European financial markets conducted by the Economic and Financial Committee (an advisory body of the European Council). CESR was also called to contribute to the work of the Inter-Institutional Monitoring Group to assess the evolution of the Lamfalussy procedure.

Furthermore, CESR has observer status in the following European Committees: the Financial Services Committee (FSC), the European Securities Committee (ESC), the UCITS Contact Committee, the Accounting Regulatory Committee (ARC) and the European Financial Reporting Advisory Group (EFRAG). CESR has asked to have the same status in the future Committee resulting from the reform of the 8th Company Law Directive in the field of auditing.

CESR also attends, as an observer, working groups led by market participants in various fields of financial market regulation. These include the Forum Groups established by the European Commission on Financial Analysts and the Groups on Post-Financial Services Action Plan (securities and asset management), and the ACI-STEP Task Force on Short-Term European Paper.

In addition, CESR will cooperate with the other Level 3 Committees recently established by the European Commission. The first concrete example of this co-operation was realised in the field of credit risk transfer on the basis of a mandate given by the Economic and Financial Committee to finalise a report in 2004.

CESR also has close contacts with the European Central Bank (ECB) and the European System of Central Banks (ESCB), particularly in the field of securities clearing and settlement systems, where a joint group was established by CESR and the ESCB to adopt standards at EU level.

Recognising the increasing interdependence between Europe's markets and the critical need to establish secure financial markets which foster transatlantic business, CESR launched in 2004 a practical dialogue with both the US Securities and Exchange Commission (SEC), and the US Commodity Futures Trading Commission (CFTC).