Committee of Wise Men on the Regulation of European Securities Markets

The Committee of Wise Men on the Regulation of European Securities Markets was set up by the European Council on July 17, 2000 to develop proposals for making the regulatory process for European Union securities legislation more flexible, effective and transparent. The committee was chaired by Baron Alexandre Lamfalussy.

The Lamfalussy Report, i.e., the Final Report of the Committee of Wise Men on the Regulation of European Securities Markets, published on 15 February 2001, now adopted by the European Council in Stockholm on 23 March 2001, presents a useful diagnosis of the issues and problems within the European Union capital markets. At the core of these concerns lie the difficulties of implementing reforms through state regulators who, given their inherent risk aversion reinforced by their accountability to national policy makers, have a tendency to exploit any ambiguities in EU Directives in favor of national exchanges and constituencies.

The Report proposed a four-level regulatory approach.

The Report stated that the proposed ESC would be set up following the regulatory ‘comitology’ procedure suggested for implementing powers conferred on the Commission. It would be composed of high-ranking officials – State Secretaries in the Finance Ministries of the Member States or their personal representatives – and would be chaired by the European Commissioner responsible for the Internal Market in Financial Services. The ESRC would be set up as an independent advisory group to the Commission (outside the comitology process) and would be composed of national securities regulators.

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