Reject securities deal unless demands are met, MEPs told

Date: 06/12/01

By Peter Chapman

THE end of 2003 deadline for reforms to EU securities markets was plunged into doubt after a leading MEP told his colleagues to throw out a deal with the European Commission on the new law-making system unless deputies can say 'no' to new rules they don't like.

German MEP Karl Von Wogau said deputies would be denied their rights by the system - under which a committee of national securities regulators and a Commission-chaired panel of top national officials would agree on the fine print of financial services legislation to flesh-out general 'framework' directives.

He said MEPs should get far more than a negotiated 'sunset clause', which would fold the new committees after four years unless their mandate is renewed.

Von Wogau - who will issue a first draft of his report on the deal to the assembly's constitutional affairs committee later this month - was one of the MEPs who pressed for an accord with financial services Commissioner Frits Bolkestein on oversight of the system proposed by Belgian former central-banker Alexandre Lamfalussy.

But the MEP said he now wanted to add a formal 'call-back' and other measures to the sunset clause - guaranteeing the Parliament's right to scrutinise rules drawn up by the new committees on a continual basis.

The call-back would put MEPs on a par with the Council of Ministers - which has already secured such a right.

The Commission has promised that it will not adopt rules approved by the securities committee if there is a 'prevalent view' in the Council against.

"We say as co-legislators we must have equivalent rights to the Council," said Von Wogau.

He said he will also demand increased transparency throughout the whole process through a separate committee of industry participants to ensure firms can actually live with the fine print of new laws. The panel would be useful not only at the fine-tuning stage, but also before the Commission proposed framework directives.

Such a body, he claims, would have averted problems with the two "badly drafted" proposals on prospectuses and market abuse - the first two laws to use the new system.

The Commission claims it has little more room to give increased oversight powers to the Parliament. It says it is bound by 1999 rules governing the procedures for EU committees - employed not only in financial services but in areas from chemicals to environmental standards.

But Von Wogau said his demands were totally in line with the Maastricht Treaty, which gave MEPs the right to legislate on financial services.

"The European Union has to get a more modern way of legislating - where technical detail is done by specialists and Parliamentarians concentrate on basic political points. But we want to decide what is technical and what is political."

EU leaders agreed at Stockholm earlier this year that it was vital to put in place Union-wide rules for securities markets by the end of 2003, as part of a broader financial services action plan to be completed by 2005.

Bolkestein this week predicted a huge logjam as member states and MEPs take longer than expected to adopt new laws - including the prospectus and market abuse directives.

But Von Wogau said Bolkestein could keep the timetable for approving these two directives on-track if the Commissioner met his new demands by February.

German MEP, Karl von Wogau, told other MEPs at the start of December 2001 to reject the European Commission's new law-making system for EU securities markets unless deputies can say 'no' to rules they don't agree with.