EUROPEAN PARLIAMENT
1999
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2004
Session document
FINAL
A5-0162/2004
17 March 2004
***I
REPORT
on the proposal for a European Parliament and Council directive amending
Council Directives 73/239/EEC, 85/611/EEC, 91/675/EEC, 93/6/EEC and
94/19/EC and Directives 2000/12/EC, 2002/83/EC and 2002/87/EC of the
European Parliament and of the Council, in order to establish a new financial
services committee organisational structure
(COM(2003) 659 – C5-0520/2003 – 2003/0263(COD))
Committee on Economic and Monetary Affairs
Rapporteur: Christa Randzio-Plath
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EN
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Symbols for procedures
*
**I
**II
***
***I
***II
***III
Consultation procedure
majority of the votes cast
Cooperation procedure (first reading)
majority of the votes cast
Cooperation procedure (second reading)
majority of the votes cast, to approve the common position
majority of Parliament’s component Members, to reject or amend
the common position
Assent procedure
majority of Parliament’s component Members except in cases
covered by Articles 105, 107, 161 and 300 of the EC Treaty and
Article 7 of the EU Treaty
Codecision procedure (first reading)
majority of the votes cast
Codecision procedure (second reading)
majority of the votes cast, to approve the common position
majority of Parliament’s component Members, to reject or amend
the common position
Codecision procedure (third reading)
majority of the votes cast, to approve the joint text
(The type of procedure depends on the legal basis proposed by the
Commission)
Amendments to a legislative text
In amendments by Parliament, amended text is highlighted in bold italics.
Highlighting in normal italics is an indication for the relevant departments
showing parts of the legislative text for which a correction is proposed, to
assist preparation of the final text (for instance, obvious errors or omissions
in a given language version). These suggested corrections are subject to the
agreement of the departments concerned.
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CONTENTS
Page
PROCEDURAL PAGE .............................................................................................................. 4
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION ................................. 5
EXPLANATORY STATEMENT............................................................................................ 12
OPINION OF THE COMMITTEE ON CONSTITUTIONAL AFFAIRS .............................. 19
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PROCEDURAL PAGE
By letter of 5 November 2003 the Commission submitted to Parliament, pursuant to
Articles 251(2) and 47(2) of the EC Treaty, the proposal for a European Parliament and
Council directive amending Council Directives 73/239/EEC, 85/611/EEC, 91/675/EEC,
93/6/EEC and 94/19/EC and Directives 2000/12/EC, 2002/83/EC and 2002/87/EC of the
European Parliament and of the Council, in order to establish a new financial services
committee organisational structure (COM(2003) 659 – 2003/0263(COD)).
At the sitting of 17 November 2003 the President of Parliament announced that he had
referred the proposal to the Committee on Economic and Monetary Affairs as the committee
responsible and the Committee on Constitutional Affairs for its opinion (C5-0520/2003).
The Committee on Economic and Monetary Affairs appointed Christa Randzio-Plath
rapporteur at its meeting of 19 November 2003.
The committee considered the Commission proposal and draft report at its meeting of 17
February and 16 March 2004 .
At the last meeting it adopted the draft legislative resolution unanimously.
The following were present for the vote:Christa Randzio-Plath (chairwoman), Philippe A.R.
Herzog (vice-chairman), John Purvis (vice-chairman), Christa Randzio-Plath (rapporteur),
Pervenche Berès, Hans Udo Bullmann, Jonathan Evans, Carles-Alfred Gasòliba i Böhm,
Robert Goebbels, Lisbeth Grönfeldt Bergman, Christopher Huhne, Christoph Werner Konrad,
Astrid Lulling, David W. Martin, Hans-Peter Mayer, Fernando Pérez Royo, Alexander
Radwan, Bernhard Rapkay, Mónica Ridruejo, Peter William Skinner, Helena Torres Marques,
Bruno Trentin, Theresa Villiers, Bert Doorn (for Othmar Karas), Werner Langen (for Ingo
Friedrich), Thomas Mann (for Generoso Andria), José Javier Pomés Ruiz (for José Manuel
García-Margallo y Marfil), Ieke van den Burg (for Giorgos Katiforis), Simon Francis Murphy
(for Mary Honeyball).
The opinion of the Committee on Constitutional Affairs is attached. The report was tabled on
17 March 2004.
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DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
on the proposal for a European Parliament and Council directive amending Council
Directives 73/239/EEC, 85/611/EEC, 91/675/EEC, 93/6/EEC and 94/19/EC and
Directives 2000/12/EC, 2002/83/EC and 2002/87/EC of the European Parliament and of
the Council, in order to establish a new financial services committee organisational
structure
(COM(2003) 659 – C5-0520/2003 – 2003/0263(COD))
(Codecision procedure: first reading)
The European Parliament,
– having regard to the Commission proposal to the European Parliament and the Council
(COM(2003) 659)1,
– having regard to Articles 251(2) and 47(2) of the EC Treaty, pursuant to which the
Commission submitted the proposal to Parliament (C5-0520/2003),
– having regard to Rule 67 of its Rules of Procedure,
– having regard to the report of the Committee on Economic and Monetary Affairs and the
opinion of the Committee on Constitutional Affairs (A5-0162/2004),
1. Approves the Commission proposal as amended;
2. Calls on the Commission to refer the matter to Parliament again if it intends to amend the
proposal substantially or replace it with another text;
3. Instructs its President to forward its position to the Council and Commission.
Text proposed by the Commission
Amendments by Parliament
Amendment 1
RECITAL 5 A (new)
(5a) Democratic accountability and
transparency must be inherent in the
Lamfalussy process and its extension,
which can only be sufficiently guaranteed
by respecting the inter-institutional balance
with regard to implementing measures.
Justification
It is vital to ensure that a proper degree of democratic accountability is injected into the
extension of the Lamfalussy process. The proposed compromise amendment inserts into this
1
Not yet published in OJ.
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recital the reference to the need to have an appropriate inter-institutional balance for the
extension of the Lamfalussy process as well as for the Lamfalussy process itself. The proposed
compromise amendment also changes "delegated" to "implementing" to reflect the current
Treaty arrangements.
Amendment 2
RECITAL 5 B (new)
(5b) This Directive amending Directives
73/239/EEC, 85/611/EEC, 91/675/EEC,
92/49/EEC, 93/6/EC, 94/19/19/EC,
98/78/EC, 2000/12/EC, 2002/83/EC,
2002/87/EC and 2001/34/EC only aims at
certain changes in the organisational
structure of committees. None of the
modifications extends the powers to adopt
implementing measures vested in the
Commission in these directives, nor the
powers vested in the Council in Directive
93/6/EC.
Justification
Without this clarification there would be a risk that the application of the Lamfalussy
procedure to these directives would be used as an argument for a new interpretation of the
existing implementing powers. This is because the four level approach of the Lamfalussy
procedure provides for a relatively limited intervention from the legislator and an important
intervention from the executive power. The proposed compromise amendment inserts into
Amendment 2 of the draft Report references to additional directives which had been omitted
from the Commission's original proposal.
Amendment 3
RECITAL 6
(6) In the Resolutions of 5 February 2002
and 21 November 2002, the European
Parliament respectively endorsed the fourlevel approach for securities and called for
certain aspects of that approach to be
extended to the banking and insurance
sectors subject to a clear commitment on the
part of the Council to guarantee a proper
institutional balance.
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(6) In the Resolution of 5 February 2002 the
European Parliament endorsed the four-level
approach for securities, on the basis of the
solemn declaration made before Parliament
the same day by the Commission and the
letter of 2 October 2001 addressed by the
Internal Market Commissioner to the
Chairman of Parliament's Committee on
Economic and Monetary Affairs with
regard to the safeguards for the European
Parliament's role in this process. On 21
November 2002 the Parliament called for
certain aspects of that approach to be
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extended to the banking and insurance
sectors subject to a clear commitment on the
part of the Council to guarantee a proper
institutional balance.
Justification
The proposed compromise amendment inserts into recital 5 A (new) the reference to the need
to have an appropriate inter-institutional balance for the extension of the Lamfalussy process
as well as for the Lamfalussy process itself. The second part of Amendment 3 of the draft
Report can therefore be deleted.
Amendment 4
RECITAL 6 A (new)
(6a) The commitments made by the
European Commission regarding securities
legislation via the declaration of President
Prodi of 5 February 2002 and the letter
from Commissioner Bolkestein of 2
October 2001 should be complemented by
sufficient guarantees concerning a proper
institutional balance.
Justification
The proposed compromise amendment amends the text to relate to: the additional
commitments which will be provided by President Prodi to mirror the committments given to
the securities sector, and to the committments to be made by the Council regarding the nonuse of the "aerosol clause" and respect of the rights of all EU institutions such as drawn up in
the draft Constitution for Europe.
Amendment 5
RECITAL 7 A (new)
(7a) Safeguards with respect to the
extension of the four level approach are
also required because the EU institutions
do not yet benefit from an extensive
practical experience of the four level
Lamfalussy approach. Furthermore, the
first and second Interim Reports of the
Inter-Institutional Monitoring Group
monitoring the Lamfalussy process have
pointed out certain remarks and criticisms
concerning the functioning of the process.
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Justification
The Lamfalussy procedure is still in its infancy. It would be inappropriate to vastly extend its
remit without sufficient guarantees regarding the workings of the process. The proposed
compromise amendment amends the text to relate to: the additional commitments which will
be provided by President Prodi to mirror the committments given to the securities sector, and
to the committments to be made by the Council regarding the non-use of the "aerosol clause"
and respect of the rights of all EU institutions such as drawn up in the draft Constitution for
Europe.
Amendment 6
RECITAL 7 B (new)
(7b) The speed of adoption of legislation
and the quality of legislation are
fundamental objectives of the Lamfalussy
process. The success of the Lamfalussy
process depends more on the political will
of the institutional partners to set up an
appropriate framework for the adoption of
the legislation than on an acceleration of
the setting up of the related technical
delegated provisions. In addition, an
overemphasis on the speed of setting up of
the delegated provisions can create
significant problems with regard to the
quality of those provisions.
Justification
Speed is not the sole factor by which the Lamfalussy process should be judged. In the setting
up of a Single Market for Financial Services, due account should be taken of the good quality
of legislation, rather than adopting a tick-box approach to legislation whereby measures are
adopted in haste and subsequently prove to be inappropriate.
Amendment 7
RECITAL 7 C (new)
(7c) The extension of the Lamfalussy
procedure is without prejudice to possible
decisions regarding the organisation of
supervision at a European level.
Justification
The extension of the Lamfalussy process should not affect a possible future debate on the
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setting up of a system for single Europe-wide supervision.
Amendment 8
RECITAL 10 A (new)
(10a) The implementing measures adopted
should not modify the essential provisions
of Directives.
Justification
See justification to amendment to Article -9 (new). The proposed compromise amendment
splits Amendment 8 of the Draft Report into 2 amendments in the interest of clarity.
Amendment 9
RECITAL 10 B (new)
(10b) The European Parliament should be
given a period of three months from the
first transmission of draft implementing
measures to allow it to examine them and
to give its opinion. However, in urgent and
duly justified cases this period may be
shortened. If, within that period, a
resolution is passed by the European
Parliament, the Commission will reexamine the draft measures.
Justification
See justification to amendment to Article -9 (new). The proposed compromise amendment
splits Amendment 8 of the Draft Report into 2 amendments in the interest of clarity.
Amendment 10
RECITAL 10 C (new)
(10c) In exercising its implementing
powers, the Commission should respect
the following principles:
- the need to ensure confidence in
financial markets among investors by
promoting high standards of transparency
in financial markets,
- the need to provide investors with a wide
range of competing investments and a
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level of disclosure and protection tailored
to their circumstances,
- the need to ensure that independent
regulatory authorities enforce the rules
consistently, especially as regards the
fight against economic crime,
- the need for high levels of transparency
and consultation with all market
participants and with the European
Parliament and the Council,
- the need to encourage innovation in
financial markets if they are to be
dynamic and efficient,
- the need to ensure market integrity by
close and reactive monitoring of financial
innovation,
- the importance of reducing the cost of,
and increasing access to, capital,
- the balance of costs and benefits to
market participants on a long-term basis
(including small and medium-sized
businesses and small investors) in any
implementing measures,
- the need to foster the international
competitiveness of EU financial markets
without prejudice to a much-needed
extension of international cooperation,
- the need to achieve a level playing field
for all market participants by establishing
EU-wide regulations every time it is
appropriate,
- the need to respect differences in
national markets where these do not
unduly impinge on the coherence of the
single market,
- the need to ensure coherence with other
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Community legislation in this area, as
imbalances in information and a lack of
transparency may jeopardise the
operation of the markets and above all
harm consumers and small investors.
Justification
The Commission must ensure that implementing measures fulfil certain basic criteria.
Amendment 11
ARTICLE -9 (new)
1. The implementing measures adopted
according to the procedure laid down in
Article 5 of Decision 1999/468/EC in
compliance with Article 7(3) and Article 8
thereof must not modify the essential
provisions of the Directives.
2. The period laid down in article 5 (6) of
Decision 1999/468/EC shall be set at three
months.
3. Should the conditions established under
the Treaty establishing the European
Community governing the exercise of
implementing powers conferred on the
Commission be modified, the Commission
shall review this Directive and, if
appropriate, propose amendments. Such a
review shall in any case be carried out by
31 December 2007 at the latest.
Justification
The proposed compromise amendment clarifies that any future amendment regarding
implementing measaures, whether that via the adoption of a new "Constituion for Europe" or
the adoption of an amendment of the Comitology decision, should mean that the Commission
must make a review and propose any commensurate changes regarding the directive and that
this review must by carried out at the latest by 31 December 2007. The proposed compromise
thereby transforms the sunset clause into a more useful and appropriate format in this
context, ensuring that the Commission's right of initiative with regard to future proposals is
not tampered with and without making any adjustments to the Commission's existing powers.
The amendment retains para 1 and part of para 2 of Amendment 10 of the draft Report, which
have been accorded in the securities sector
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EXPLANATORY STATEMENT
The quality of the legislation which is today being adopted by the European Parliament and
the Council, and which tomorrow will apply to hundreds of millions of European citizens and
will govern the economic and social rules of the game for European companies, has become a
fundamental imperative for the European Union. This basic principle, applicable of course to
legislation on financial services, is one of the objectives of the approach supported by Mr
Lamfalussy in his report to the Ecofin Council in 2001, which specifically concerned the
improvement of such legislation with a view to ensuring that texts are drafted in a simple,
clear, consistent and, of course, sound way, as well ensuring as the utmost transparency in the
legislative process.
More than just words, there is an ultimate political objective, namely to ensure respect for the
democratic legitimacy of European legislation and in particular to safeguard the effective
exercise of the role of the European Parliament and its political responsibility. That is the
principle by which we are constantly guided in our approach to the role of the European
Parliament in connection with the implementation and extension of the Lamfalussy process.
1) Political context of the extension of the Lamfalussy process
It was only possible for the European Parliament to accept, in its resolution of 5 February
2002, the Lamfalussy process for securities because the process was accompanied by very
strict institutional requirements, in particular a 'sunset clause' providing for the powers of
delegation conferred on the Commission to be revoked at the end of a specified period and a
form - admittedly limited - of 'call back' for implementing measures.
The Lamfalussy process, it may be recalled, provides, on the basis of four levels of action, for
legislation on financial markets to be adopted in two stages: fundamental policy choices in the
form of general rules, adopted by codecision, and more detailed technical measures necessary
for achieving legislative objectives, adopted by the Commission in accordance with these
framework principles.
In order to implement these new legislative arrangements, and in the light of the forthcoming
revision of the Treaties, it had been agreed to apply the only procedure existing at the time of
the introduction of the Lamfalussy process capable of lending itself to this approach, namely
the provisions on comitology.
However, Parliament, for its part, has always disputed that the comitology procedure is an
appropriate instrument, given that it was originally conceived (under Article 202 of the
Treaty) as an instrument conferring powers on the Commission to implement rules laid down
by the Council. It is a system designed in the early days of the Treaties, at a time when the
European Parliament had only simple powers of consultation. It is for that reason that the
powers currently granted to the European Parliament in relation to implementing measures
adopted by the Commission are purely consultative. The introduction of codecision has
completely changed the context, given that the European Parliament has become co-legislator.
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However, in contrast, nothing has changed as regards comitology. The Council Decision of 28
June 1999 laying down the procedures for the exercise of implementing powers, which was
adopted years after the introduction of codecision, did not take account of the reality of the
new institutional balance. This issue is all the more essential insofar as what are - incorrectly referred to as 'implementing measures' in the area of financial services are in fact delegated
legislative acts adopted by the Commission in the form of directives and regulations.
On top of this situation of institutional imbalance inherent in the implementation of the
Lamfalussy process within the current framework, a serious institutional concession was
made by the Commission vis-à-vis the Council at the European Council summit in Stockholm
on 24 March 2001. The Commission gave a written undertaking to 'avoid going against
predominant views which might emerge within the Council' as to the appropriateness of
measures in areas acknowledged to be particularly sensitive (paragraph 5, subparagraph 3 of
the resolution). The Commission thus deliberately granted the Council a right of call back, i.e.
a right to revoke measures adopted by the Commission, which appeared neither in the
Treaties nor in implementing decisions. This political situation was, of course, considered
unacceptable by the Committee on Economic and Monetary Affairs and by the European
Parliament, leading us to call in turn on the Commission, in our resolution of 5 February
2002, to likewise grant us a right of call back. The Commission President, Mr Prodi,
responded to this request with a solemn declaration before the plenary affirming that the
Commission would take 'the utmost account of Parliament’s position and any resolutions that
it might adopt with regard to implementing measures exceeding the implementing powers
provided for in the basic instrument'.
The Commission additionally accepted a 'sunset clause', limiting the duration of the
delegation of implementing powers to the Commission to four years, and a period of three
months from the forwarding of implementing measures for their examination, and reaffirmed
that full transparency would be ensured throughout the entire procedure for the adoption of
implementing measures.
Whilst Parliament was thus granted a certain equivalence of treatment in terms of what might
be considered a right of call back by the Commission, it should be pointed out that, in its
statement, the Commission confined itself to taking 'the utmost account of Parliament’s
position'. In contrast, it did not hesitate to give a formal undertaking in Stockholm vis-à-vis
the Council to avoid going against the predominant view within the Council.
However, Parliament, fully conscious both of what was that at stake in terms of an integrated
financial services market in Europe and of its role as co-legislator, decided not to oppose the
Lamfalussy approach in the area of securities.
Subsequently in 2002, at the request of the Ecofin Council, the Economic and Finance
Committee prepared a report on financial regulation, supervision and stability, proposing that
the Lamfalussy process be extended to all financial sectors and no longer limited only to
securities, with in particular the setting up of advisory and regulatory committees in the areas
of banking and insurance and the setting up within the Economic and Finance Committee of a
financial services committee responsible for monitoring general developments on financial
markets.
The Committee on Economic and Monetary Affairs debated these proposals at length, leading
to the adoption of two resolutions in plenary on 21 November 2002. Parliament did not reject
the principle of the possible extension of the Lamfalussy process, but made it strictly
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conditional on the granting of a 'call back' clause for measures for the implementation of basic
legislative acts, insisting that, in our capacity as co-legislator, we must have identical rights to
those enjoyed by the Council.
It is also essential to point out that the right of call back which we are demanding at the
Community level exists in one form or another in all of the Member States and in the majority
of third countries, including the United States. Where delegated legislative measures are
concerned, national parliaments have either a right of revocation, or a right of legislative
initiative the effect of which is equivalent to call back. At present the European Parliament
has neither.
We also considered that the extension of the Lamfalussy process to banking and insurance did
not have the same urgency as was the case with the securities sector. The first legislative texts
in this area would concern the implementation of the Basle II accords which were not due to
be adopted until the end of 2004 or during 2005. A final argument is that, objectively, we do
not have the genuine experience required to evaluate the Lamfalussy process, given that it
comprises four levels and that to date the first series of implementing measures has only just
been published (December 2003), and only in the case of one directive, the market abuse
directive.
2) Commission proposal
Irrespective of the above considerations, the Commission presented on 5 November 2003 a
package of texts designed to extend the Lamfalussy process - currently limited to securities to banking, insurance and collective investment undertakings. This would mean that the
whole of the financial services sector would be covered by the Lamfalussy approach.
The main provision is the proposal for a directive which is the subject of this report and the
purpose of which is to establish a new organisational structure for committees responsible for
financial services. Under the new proposed structure, regulatory committees are to be created
for banking and insurance and the powers of the European Securities Committee are to be
extended to cover undertakings for collective investment in transferable securities (UCITS).
These new regulatory committees are intended to replace the committees which exist under
previous legislation concerning banking, insurance and occupational pensions, collective
investment undertakings and financial conglomerates. Why introduce such regulatory
committees?
Apart from the parallel organisational structure which the Commission wishes to introduce in
relation to the securities sector, the proposals also appear to reflect the political will on the
part of the Commission that new legislative provisions relating to these sectors should be
adopted through delegated legislation measures in accordance with the Lamfalussy process,
which is not currently possible. The institutional implications are again clearly important,
since the original issue of the institutional balance between Parliament and the Council has
not been resolved.
The proposed text consists of a total of 11 articles containing provisions amending directives
relating to the banking sector, the insurance and occupational pensions sector, the securities
sector and financial conglomerates.
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By way of further measures, the Commission has decided to introduce, solely at the
consultation level, a series of decisions concerning, in respect of levels 1 and 2, the European
Banking Committee (EBC), the European Insurance and Occupational Pensions Committee
(EIOPC) and the European Securities Committee (ESC) and, in respect of level 3, the
Committee of European Banking Supervisors (CEBS), the Committee of European Insurance
and Occupational Pension Supervisors (CEIOPS) and the Committee of European Securities
Regulators (CESR).
To sum up, Parliament is only called upon to give its opinion on the directive which comes
under the codecision procedure establishing new regulatory committees in the area of banking
and insurance.
3) Our assessment of the extension of the Lamfalussy process
So as to immediately dispel any misunderstandings, we should clearly stress that the
Commission proposal does not pose any particular difficulties for us at a technical level.
-
However, at the political level the situation is quite different, and we first wish to ask
the key question: do we have sufficient experience to enable us to evaluate the
effectiveness of the Lamfalussy process and, on that basis, to give an opinion on the
extension of the process to the whole of the financial services sector? Over the past
few weeks we have held a series of hearings and exchanges of views in order to seek
to give as precise and relevant as possible an assessment of the Lamfalussy process,
questioning Mr Norbert Walter, rapporteur for the second report of the
Interinstitutional Monitoring Group for the Lamfalussy process, a number of
professionals representing market operators, our panel of financial experts (some 10 or
so academics and professionals), the Commission representatives who have initiated
and introduced legislative provisions on securities, and finally, of course, Mr
Lamfalussy himself, with whom we held lengthy discussions on 24 February. Positive
aspects clearly emerged: the relationship of trust enjoyed with the Commission
services, which has enabled us to ensure genuine transparency, generally greatly
improved interinstitutional cooperation, satisfactory conditions for consultation with
market operators, quality and transparency of the proceedings of the CESR. These are
all important points which we are pleased to be able to highlight and which are
reflected in the first two assessment reports produced by the interinstitutional
monitoring group composed of two experts nominated respectively by each of the
three institutions. However, we have also noted weaknesses: the time required by the
Council to reach decisions, which can be significantly longer than that required by the
European Parliament, the excessive time taken to receive translations (more than five
months in order to obtain the final text of an act adopted by the Council), the very
short periods for consultations involving regulators and the consequently even shorter
periods for consultations involving market operators. Mr Lamfalussy himself reflected
on how transparency could be further increased, for example through more balanced
representation of all parties involved in the markets (consumers, investment funds,
small and medium-sized companies, etc), and on the issues of duplication in public
consultation and the cost of such consultation for certain groups.
Our panel of experts and a number of other professionals also drew our attention to the issue
of the implementation of legislation at level 3, namely at the level of the Member States. As
we have already indicated, none of the current directives on financial services has yet reached
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that stage. We can therefore only voice doubts and fears on this subject. How will national
regulators transpose level 2 legislative provisions into their respective legislation? Will the
Committee of European Securities Regulators have sufficient authority to ensure that
provisions are implemented in an even manner? Will market operators have access to an
appeals procedure or another procedure of that kind in order to contest national application of
a regulation if they consider it to be more discriminatory than in other Member States? We are
confronted here with an absolutely crucial problem which will be the true test of the
Lamfalussy procedure: cultural differences influencing the transposition of legislative texts,
above all texts adopted in the form of directives by the Commission (as opposed to
regulations, which we have always favoured for that precise reason). It would be highly
regrettable if we had to wait for level 4, regarding which we do not yet know how it will be
organised, in order to pose the question of whether the legislative process is functioning
smoothly at level 3.
In conclusion, we can only confirm that we do not have sufficient distance to judge this new
legislative approach. What we would point out at this stage is that one of the objectives
emphasised most strongly when the Lamfalussy process was introduced, namely speeding up
of the legislative process, has only partly been achieved and would in any case have been
achieved by better self-discipline on the part of institutions and improved cooperation
between services. On the other hand, there is no doubt that transparency has significantly
increased and that the quality of legislation has improved.
-
A secondary question, but one which is also important in so far as this aspect is
stressed by the Commission: Is the setting up of these regulatory committees a matter
of urgency? One of the main arguments put forward by the Commission in favour of
its proposal for a directive is the introduction of structures allowing regulators in the
banking and insurance sectors to consult each other more effectively and to learn to
work together, an essential objective at a time when the European Union is being
enlarged to include 10 new countries. However, this opportunity for exchanges
between regulators already exists, as the Commission created, last November,
committees of regulators for the banking and insurance sectors and made changes to
the committee in the securities sector. Admittedly, the committees concerned are only
advisory committees, but within the context of their work they are perfectly able to
perform their role. The advisory committees which in effect will be the same
committees but will be granted regulatory powers only need to be set up with a view
to adopting implementing measures which will not be taken for at least 18 months, in
the earliest scenario.
The two arguments put forward therefore do not suffice, in our view, to justify the setting up
of these new regulatory committees. However, in the light of the changes to timetables which
will occur both as a result of the new parliamentary legislative term, the arrival of the new
Member States and the nomination and appointment of a new Commission and in order to
take account of the work which will have to be carried out in order to implement the UCITS
directive, we need to think seriously before opposing this proposal for a directive.
Nonetheless, two years after the declaration made by Mr Prodi before the plenary, the
institutional framework has not evolved. The work of the Convention has, certainly, led to a
definition, under Article 35 of the draft Constitutional Treaty, of delegated regulations, which
would be enacted by the Commission in order to supplement or amend certain non-essential
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elements of the basic legislative provisions. This article also provides for the possibility of
revoking the delegation of powers, as well as a genuine right of call back for the European
Parliament and the Council.
However, we had to draw the attention of those drawing up the draft Constitution, and
subsequently of representatives of Member State governments, to possible confusion between
the provisions relating to delegated regulations under Article 35 and those relating to
implementing acts under Article 36, which in our view correspond to classic comitology
rules. It is for us absolutely without question that only Article 35 of the draft Constitution is
applicable to texts relating to financial services (securities, banking, insurance,
conglomerates, UCITS, etc) .
It is only on that condition that our Committee and the European Parliament are able to
consider that the Article 35 in question meets the institutional demands which we have
constantly made, and in particular those set out in connection with the Lamfalussy process.
It emerged in the course of the proceedings of the IGC that the aforementioned Article 35
ultimately did not give rise to any objections on the part of the Member States. However, as
the proceedings of the IGC have been interrupted, it no longer seems possible to find a
solution with regard to this proposal for a directive on the basis of Article 35 by the end of
the current legislative term.
4) Conditions for reaching an agreement on the extension of the Lamfalussy process to
the banking and insurance sectors
Against this political background, it must therefore be on a conditional basis that we envisage
giving our approval to the extension of the Lamfalussy process provided for in this directive,
namely based on significant, formal undertakings by the Council, the Member States and the
Commission on respect for the institutional rights of the European Parliament. This would
essentially have to be reflected in respect for the institutional balance between the two
branches of the legislative authority in the legislative procedure for all financial services.
In the course of the discussions and negotiations which have taken place with the Irish
Presidency in preparing this report, it has emerged that a consensus might be acceptable to our
Committee and Parliament on the following basis:
- The Commission would accept the amendments contained in this report and President Prodi
would make a new declaration before the plenary in order to reassure Parliament of the
Commission's commitment to respecting the terms of his solemn declaration of February 2002
concerning securities in the areas covered by this proposal for a directive.
- The Council would incorporate into the directive the amendments contained in this report.
These amendments embody essential clauses safeguarding Parliament's interests contained in
previous directives on financial markets and in Mr Prodi's solemn declaration before
Parliament in February 2002.
- The Council would make a declaration renouncing the 'aerosol' clause as currently set out in
paragraph 5 (3) of the resolution of the Stockholm European Council or any other provision
of equivalent effect in respect of areas covered by the extension of the Lamfalussy process.
- The Member States would make a joint declaration reaffirming the political will on their
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part to adopt the text of Article 35 of the draft Constitutional Treaty for delegated legislative
provisions relating to financial services in order to respect the institutional balance between
the two branches of the legislative authority.
Finally, it should be understood that this directive will be amended once a new Constitution
has been adopted in so far as it lays down provisions relating to delegated regulations as
contained in the current draft Article 35.
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16 March 2004
OPINION OF THE COMMITTEE ON CONSTITUTIONAL AFFAIRS
for the Committee on Economic and Monetary Affairs
on the proposal for a European Parliament and Council directive amending Council Directives
73/239/EEC, 85/611/EEC, 91/675/EEC, 93/6/EEC and 94/19/EC and Directives 2000/12/EC,
2002/83/EC and 2002/87/EC of the European Parliament and of the Council, in order to
establish a new financial services committee organisational structure
(COM(2003) 659 – C5-0520/2003 – 2003/0263(COD))
Rapporteur: Lord Inglewood
PROCEDURE
The Committee on Constitutional Affairs appointed The Lord Inglewood draftsman at its
meeting of 19 January 2004.
It considered the draft opinion at its meetings of 16 February 2004 and 16 March 2004.
At the last meeting it adopted the following amendments unanimously.
The following were present for the vote: Giorgio Napolitano (chairman), Jo Leinen (vicechairman), Jean-Pierre Bebear (for Cees Bremmer pursuant to Rule 153(2)), Georges Berthu,
Giorgio Calò, Richard Corbett, Jean-Maurice Dehousse, Gianfranco Dell'Alba (for Olivier
Dupuis), Giorgos Dimitrakopoulos, Andrew Nicholas Duff, José María Gil-Robles GilDelgado, Anne-Karin Glase (for Luigi Ciriaco De Mita pursuant to Rule 153(2)), SylviaYvonne Kaufmann, Sir Neil MacCormick (for Monica Frassoni), Hans-Peter Martin, Iñigo
Méndez de Vigo, Ana Miranda de Lage (for Carlos Carnero González), Camilo Nogueira
Román (for Gérard Onesta), Reinhard Rack (for Teresa Almeida Garrett), Helle ThorningSchmidt (for Enrique Barón Crespo), Françoise Veyrinas (for Jean-Louis Bourlanges) and
Johannes Voggenhuber.
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SHORT JUSTIFICATION
While substantive progress has been made, the single market for financial services remains
incomplete. Markets remain segmented. Yet, the completion of a genuine single market for
financial services is crucial for economic growth and job creation in the European Union. It
will increase European economic competitiveness and contribute to economic and social
cohesion.
In order to achieve this fundamental objective, the European Commission is proposing a new
financial services committee structure in the fields of banking, insurance and investment
funds. This comes down to an extension of the Lamfalussy-process in the above named
fields. The Commission as well as the Council is stressing the urgency of the measures.
The committee on constitutional affairs fully understands the urgency and the importance of
the extension of the Lamfalussy process. Nevertheless, we have an obligation to look into
this matter from a constitutional point of view. Fact is, that with the Intergovernmental
Conference failing to conclude in December last year on one hand, and with the Council not
proceeding with a reform of the existing comitology Decision1 on the other hand, the
European Parliament is no further forward with its insistence on an institutional balance in
this area.
The committee on constitutional affairs therefore supports the economic and monetary affairs
committee in its demands for a call-back mechanism for the EP, a sunset clause and the notice
that this extension of the Lamfalussy procedure is without prejudice to and distinct from
possible decisions regarding the organisation of supervision at a European level.
Besides these three demands, which are preconditions for the EP's support for the extension of
the Lamfalussy process, the constitutional affairs committee is urging the members of the
Intergovernmental Conference to agree on a draft Treaty establishing a Constitution for
Europe. The only way to restore the institutional balance between the Council and the
European Parliament in a profound way, is to revise the current article 202 of the EC Treaty
as has been done by the Convention on the future of Europe in article I-35 of its draft
Constitution.
At the same time and because temporary provisions are needed until any Treaty establishing a
Constitution for Europe enters into force, the constitutional affairs committee calls upon the
Council to proceed with the Commission's proposal for a Council Decision amending
Decision 1999/468/EEC. The European Parliament has in September 2003 agreed with the
Commission's proposal as amended. It is now up to the Council to undertake action.
1
11 December 2002, proposal for a Council Decision amending Decision 1999/468/EEC, COM(2002)719.
EP Resolution A5-0266/2003, adopted on 2 September 2003 (P5_TA (2003) 0352).
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AMENDMENTS
The Committee on Constitutional Affairs calls on the Committee on Economic and Monetary
Affairs, as the committee responsible, to incorporate the following amendments in its report:
Text proposed by the Commission1
Amendments by AFCO
Amendment 1
Recital 6 a (new)
6a. The commitments made by the
European Commission regarding
securities legislation via the letter from
Commissioner Bolkestein of 2 October
2001 and the declaration of President
Prodi of 5 February 2002 are not a
sufficient long term guarantee of a
commitment of the Council concerning a
proper institutional balance for the fourlevel approach. Therefore the Council
should commit itself to agree with the
Commission's proposal for a Council
Decision amending Decision
1999/468/EEC, as amended by the
European Parliament2.
Amendment 2
Recital 6 b (new)
6b. The only satisfactory way to deal with
the problems of institutional balance in
comitology is by adopting a Treaty derived
from the one establishing a Constitution
for Europe, as drafted by the Convention
on the future of Europe. It is therefore
absolutely necessary that the ongoing
Intergovernmental Conference accepts
the substance of the Convention text .
Amendment 3
Recital 6 c (new)
1
Not yet published in OJ.
11 December 2002, proposal for a Council Decision amending Decision 1999/468/EEC, COM(2002)719.
EP Resolution A5-0266/2003, adopted on 2 September 2003 (P5_TA (2003) 0352).
2
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6c. In the mean time, the European
Parliament understands the urgency of
the measures extending the Lamfalussy
process and therefore supports the reform
of the financial services committee
structure, provided that a mechanism
enabling the Parliament to reject
secondary legislation is included.
Democratic accountability and
transparency must be inherent in the
Lamfalussy process, which can only
appropriately be guaranteed by such a
mechanism.
Amendment 4
Recital 7 a (new)
7a. The proposed extension of the
Lamfalussy procedure is without
prejudice to possible decisions regarding
the organisation of supervision at a
European level.
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