¹ See, eg, Norman, P ‘A crucial year for the single market’ Financial Times, Fund Management Supplement 12 01 2004 at 7.Google Scholar

² Cohen, N and Smith, P ‘Companies in record dash to go private, Financial Times 31 12 2003 at 1. Record numbers of companies left European markets in 2003, taking £16 billion from the markets.Google Scholar

³ For a review of the ‘law matters for securities markets’ debate see Choi, SLaw, Finance and Path Dependence: Developing Strong Securities Markets, UC Berkeley School of Law, Public Law and Legal Theory Research Paper No 79 (2002), available online at <http://www.papers.ssrn.com/abstract=299386>..>Google Scholar

⁴ See, eg, the 2002 London Economics Study estimating an increase of 1.1 per cent in GDP (London Economics, in association with PricewaterhouseCoopers and Oxford Economic Forecasting, Quantification of the Macro-Economic Impact of Integration of EU Financial Markets (2002)); and the 2002 ZEW/IEP study finding a 0.5–0.7 per cent increase in GDP from integration of retail financial services markets (Zentrum för Europäische Wirtschäftsforschung and Institut fur Europaische Politik, The Benefits of a Working European Retail Market for Financial Services Feb 2002). In May 2004 the Commission presented its first Financial Integration Monitor on the indicators of the economic benefits from financial integration and on the main trends in the European financial system. While its main message is that financial integration is progressing, progress is not the same across all market segments, with the retail sector, in particular, largely domestically-based. It noted a ‘genuine pooling of liquidity’ for tradable assets (at 7) and, in the wholesale sector, the replacement of a traditional national bias by European investment horizons (at 9).Google Scholar

⁵ Commission's Ninth FSAP Report, The FSAP enters the Home Straight 11 2003 at 1.Google Scholar

⁶ Informal Ecofin Council Conclusions, Athens, 4 and 5 Apr 2003.Google Scholar

⁷ Financial Services Authority, HM Treasury, Bank of England, The EU Financial Services Action Plan: A Guide (07 2003), at 1.Google Scholar

⁸ Commission's Eighth FSAP Report, Nine months left to deliver the FSAP, 06 2003 at 10.Google Scholar

⁹ ‘Realising single market freedoms requires some pooling of regulatory sovereignty. Borderless finance in Europe is not synonymous with regulation-free Europe’, Speech by Internal Market Commissioner Bolkestein to Finance and Investment Seminar, Edinburgh, Jan 2004 on ‘Learning the Lessons of the Financial Services Action Plan’ at 2.Google Scholar

¹⁰ Respectively: Directive 2003/71 OJ 2003 L345/64 (the Prospectus Directive); European Parliament Document A5–0079/2004 (most recently available draft, reflecting European Parliament revisions: the Council has reached political agreement on the Parliament's draft) (the Transparency Directive); Council Regulation 1602/2002 OJ 2002 L243/1 (the IAS Regulation); and Directive 2001/07 OJ 2002 L41/20 (the UCITS Management Company and Prospectus Directive).Google Scholar

¹¹ The Securities Consolidation Directive 2001/34 OJ 2001 L184 (SCD) consolidates the 1979 Admission to Official Listing Directive with the subsequent official listing directives which cover listing particulars disclosure, interim reporting, and disclosure of substantial shareholdings.Google Scholar

¹² Directive 85/611 OJ 1985 L375/3.Google Scholar

¹³ Directive 89/592 OJ 1989 L334/30.Google Scholar

¹⁴ Directive 2003/6 OJ 2003 L96/16.Google Scholar

¹⁵ Directive 93/22 OJ 1993 L141/27.Google Scholar

¹⁶ Directive 2004/39 OJ 2004 L145/1. The scale and depth of the MIF Directive's new regime for regulating investment services and securities trading means that only a few observations can be made here.Google Scholar

¹⁷ The influential Economic and Monetary Affairs Committee, in particular, called for amendments throughout the proposal's passage which lessened regulatory burdens on investment firms by tailoring the investor protection regime, particularly with respect to best execution and suitability, and limiting the pre-trade transparency regime for investment firms.Google Scholar

¹⁸ Following agreement by the Basel Committee, the Commission presented its proposal for a new capital adequacy regime in July 2004 (COM (2004) 486).Google Scholar

¹⁹ Financial Analysts: Best practices in an integrated European financial market. Recommendation from the Forum Group for the European Commission services, Sept 2003.Google Scholar

²⁰ Directive 2002/87 OJ 2003 L35/1.Google Scholar

²¹ Above n 10.Google Scholar

²² Directive 2001/108 OJ 2002 L41/35.Google Scholar

²³ See eg Davies, P ‘European equity-linked funds keep growth trend’ Financial Times, Fund Management Supplement 5 04 2004 at 2.Google Scholar

²⁴ Directive 2002/65 OJ 2002 L271/16.Google Scholar

²⁵ Proposed in the Final Report of the Committee of Wise Men on the Regulation of European Securities Markets, Feb 2001 (the Lamfalussy Report).Google Scholar

²⁶ See generally Moloney, N ‘The Lamfalussy Legislative Model: A New Era for the EC Securities and Investment Services Regime’ (2003) 52 ICLQ 509–20.CrossRefGoogle Scholar

²⁷ Commission Directive 2003/25 OJ 2003 L337/73, Commission Directive 2003/124 OJ 2003 L339/70, and Commission Regulation 2273/2002 OJ 2003 L336/37, respectively.Google Scholar

²⁸ Adoption of the first group of Market Abuse Directive measures was hailed as a ‘major success because of the excellent co-operation between the Commission, the Member States, the European Parliament, and CESR’, although the ESC delegations noted that ‘it is too early to draw definitive conclusions’. Summary Record of the 15th Meeting of the ESC, 18 Nov 2003 (ESC/ 45/2003) at 1 and 2.Google Scholar

²⁹ Provisional Mandate to CESR for Technical Advice on Possible Implementing Measures Concerning the Future Directive on Financial Instruments Markets. MARKT/G2 D (2003) at 5.Google Scholar

³⁰ Not yet published in the Official Journal.Google Scholar

³¹ Summary Record of the 16th Meeting of the ESC, 8 Dec 2003 (ESC/46/2003). Some delegations expressed the view that Regulations should be limited to purely technical measures (at 1).Google Scholar

³² Summary Record of the 17th Meeting of the ESC, 28 Jan 2004 (ESC/1/2004).Google Scholar

³³ Inter-Institutional Monitoring Group, Second Interim Report Monitoring the Lamfalussy Process, Dec 2003 at 15.Google Scholar

³⁴ 15th ESC Meeting Minutes above n 28 at 2.Google Scholar

³⁵ The Chairman of CESR has been quoted as saying that ‘an “unholy coalition” of lawyers, regulators and politicians had created “a lot of onerous detail” in EU legislation to create a single market in financial services’. Norman, P ‘Legal brains asked to take back seat in the making of EU financial rules’ Financial Times, Fund Management Supplement 22 03 2004 at 2.Google Scholar

³⁶ Dec 2003 Inter-Institutional Monitoring Group, above n 33 at 1.Google Scholar

³⁷ This is particularly the case at Level 2. The Commission publishes draft Level 2 measures (based on CESR's technical advice) as working documents, open for a consultation period of approximately 2 months, prior to the launch of the comitology procedure in the ESC. The transparency of the E SC goes far beyond other comitology committees: Summary Record of the 18th Meeting of the ESC, 17 Feb 2004 (ESC 8'2004), at 1. Agendas, summary minutes, and rules of procedures are all publicly available. CESR carries out at least one round of written consultations (lasting approximately 3 months) before drafting its technical advice for Level 2 measures and frequently holds public hearings. Extensive feedback statements are provided explaining CESR's responses to market consultations. It also establishes Consultative Working Groups which advise the relevant CESR Expert Group responsible for a Level 2 mandate and is advised, more generally, by a Market Practitioners' Consultative Panel, which reflects a wide range of (largely wholesale) interests on the capital markets.Google Scholar

³⁸ See, eg, the UK Financial Services Practitioners Panel Annual Report (2003) at 5–6Google Scholar

³⁹ For the banking sector see Commission Decision 2004/5 establishing the Committee of European Banking Supervisors (OJ 2004 L3/28) and Decision 2005/10 establishing the European Banking Committee (OJ 2004 L3/36).Google Scholar

⁴⁰ 18th ESC Meeting Minutes above n 37 at 2. Similarly, CESR's advice with respect to investment recommendations by journalists for the Level 2 Investment Recommendations Directive was not followed by the Commission in order to avoid disrupting ‘the outcome of a very difficult compromise reached on the second European Parliament reading on financial journalists.’ Summary Record of the 10th Meeting of the ESC, 17 Mar 2003 (ESC/17/2003) at 2Google Scholar

⁴¹ Inter-Institutional Monitoring Group Dec 2003 above n 33 at 29.Google Scholar

⁴² Ibid at 13.

⁴³ See, eg, Eighth FSAP Report above n 8 at 10–11.Google Scholar

⁴⁴ Rigby, E ‘FSA Head attacks EU finance sector plan’ Financial Times 13 10 2003 at 1, quoting UK Financial Services Authority Chairman Callum MacCarthy.Google Scholar

⁴⁵ Rigby, E ‘City expected to hit bottlenecks in 2004 and 2006’ Financial Times 15 10 2003 at 8.Google Scholar

⁴⁶ Summary Record of the 13th Meeting of the ESC, 19 Sept 2003 (ESC/32/2003) at 4.Google Scholar

⁴⁷ CESR has published a roadmap for how it intends to proceed at Level 3. The Role of CESR At KLevel 3' Under the Lamfalussy Process, Apr 2004. CESR/04–104b.Google Scholar

⁴⁸ Modernising Company Law and Enhancing Corporate Governance in the European Union—a Plan to Move Forward COM (2003) 284.Google Scholar

⁴⁹ The Plan's corporate governance reforms can be dated to the conclusions of the Seville European Council June 2002 which called for consideration of ‘practices in corporate governance and auditing’ as the implications of Enron unfolded. The CLAP notes that ‘[r]ecent financial scandals have prompted a new, active debate on corporate governance, and the necessary restoration of confidence is one more reason for new initiatives at EU Level’,ibid at 7.

⁵⁰ Report of the High Level Group of Company Law Experts A Modern Regulatory Framework for Company Law in Europe Nov 2002.Google Scholar

⁵¹ Directive 77/91 OJ 1977 L26/1.Google Scholar

⁵² ‘There is little indication that the development of a European corporate governance code as an additional layer between principles adopted at the international level and codes adopted at national level would offer significant added value.’ CLAP, above n 48 at 12. There is a striking move across the Member States to adopt corporate governance best practices codes. The UK's Combined Code is long established and has been joined by, eg, the Dutch Corporate Governance Code (2003), the French Consolidated Corporate Governance Code (2003, based on reports published in 1995, 1999, and 2002) and the German Corporate Governance Code (2002).Google Scholar

⁵³ Reinforcing the Statutory Audit in the EU COM (2003) 286 (OJ 2003 C236/2).Google Scholar

⁵⁴ Parmalat has provoked concerns across the EU institutional spectrum. See, eg, the European Parliament's Resolution on Parmalat, RSP/2004/2512, adopted on 12 Feb 2004, which strongly supported mandatory auditor rotation and tighter public supervision of auditors.Google Scholar

⁵⁵ Directive 84/253 OJ 1984 L126/20.Google Scholar

⁵⁶ COM (2004) 177.Google Scholar

⁵⁷ One official has been reported as saying that: ‘We are giving [the issues] of rotation and independence serious consideration because they are pertinent issues, particularly in the light of Parmalat’, D Dombey and A Parker ‘EU Audit Changes Proposed After Parmalat Scandal’ Financial Times 3 Feb 2004 at 1. Other Parmalat-provoked reforms include the requirement that the group auditor takes responsibility for the audit report on the consolidated accounts of a group of companies, although the proposal is defended as ‘not a knee jerk reaction to recent corporate scandals’. Explanatory Memorandum to the Proposal, above n 56 at 2.Google Scholar