Improvements should provide a higher degree of convergence and a more effective co-ordination between CESR and its members, FESE states and calls for a clearer CESR mandate and budgetary independence.
Responding to the Delarosière group improvements to the existing framework of securities supervision should provide a higher degree of convergence and a more effective co-ordination between CESR and its members.
CESR should therefore be equipped with a clearer mandate and a streamlined decision-making procedure. FESE also calls for budgetary independence of the Committee. Changes should also be made to the colleges of supervisors including a clearer division of labour via delegation of tasks or designation of a lead supervisor and greater regulatory harmonisation / Level 3 co-ordination to minimise areas of divergence among all supervisors, FESE states.
FESE proposes that three broad actions should be considered in relation to EU regulation:
Ø Providing the market with proper incentives to use safer instruments and venues: Policymakers should ensure a level playing field between the regulatory treatments of on-exchange instruments compared to OTC instruments by closing unjustified regulatory gaps that unduly incentives the market to hold OTC instruments and to choose private market structures.
Ø Addressing the risks of the unregulated space: Policymakers should improve the transparency and encourage the standardisation of OTC products. In order to mitigate the risks of OTC derivatives, counterparty risk management should be improved, in particular by making CCP clearing possible in OTC markets.
Ø Re-building investor confidence and protection: Investor confidence and investor protection should be at the core of the Commission’s and CESR’s initiatives going forward. This requires a more inclusive consultation process and a stronger representation of investors’ interests as well as re-assessing the effectiveness of investor protection rules such as conflicts of interest.
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