Annex
1. The following paragraphs present some
of the highlights of the work of the Level 3 Committees to date.
CEBS
2. CEBS has provided formal advice to the
Commission in response to its Calls for Advice on a number of
areas of work, predominately in relation to the Capital Requirements
Directive (CRD, itself not a Lamfalussy directive, as such), but
also on deposit guarantee schemes, cross-border consolidation
and E-Money. It is continuing its CRD work on responding to Calls
for Advice on national discretions, own funds, the limits to large
exposures, the prudential treatment of commodities business and
firms, the equivalence of third countries supervision and the
supervision of liquidity risk.
3. The Committee has published a number
of Level 3 guidelines that assist supervisory convergence in relation
to the implementation of the CRD, most notably on supervisory
co-operation for cross border groups (home-host), model validation,
and the application of the supervisory review process under Pillar
2. A recent performance assessment carried out by the Committee
showed that many industry respondents felt that such convergence
initiatives would have a positive impact on their area of activity.
4. CEBS has been fostering cooperation and
information exchange through a number of initiatives, for example
a pilot project on operational networking which focuses on practical
supervisory convergence and involves a limited sample of 10 cross-border
banking groups.
5. The CEBS Convergence Task Force is in
the process of wrapping up the various projects (training and
secondments, Impact Assessment, peer review and mediation) established
to address the recommendations on supervisory arrangements made
by the Financial Services Committee (FSC) in its report on financial
supervision (the so-called Francq report). The recommendations
include encouraging the development of a common supervisory culture.
CEIOPS
6. CEIOPS has, of necessity, given top priority
to responding to Commission calls for advice related to the development
of Solvency II. It was not envisaged in the construction of the
Lamfalussy process that a Level 3 committee would be providing
technical advice on the formulation of the Level 1 directive text,
but CEIOPS' input has been critical in allowing the Commission
to develop its proposals. In addition to responding to three waves
of calls for advice from the Commission, covering 23 separate
subject areas, CEIOPS subsequently elaborated on some of the more
complex themes at the Commission's request. It is now set to continue
its Solvency II work by looking into areas where level 2 and 3
material is likely to be needed.
7. CEIOPS contributed information on the
impact of Solvency II on supervisory authorities to the Commission's
overall impact assessment on Solvency II. It has also been running
Quantitative Impact Studies (QIS) on the developing solvency proposals,
testing their practicability. After an initial exercise to develop
the QIS reporting system, QIS2 focused on the design of the solvency
requirement. QIS3, launched in April 2007, is designed to help
calibrate the solvency requirements and QIS4 is already being
planned.
8. CEIOPS work on Solvency II has not been
to the exclusion of initiatives in other areas. The Committee
has developed Protocols facilitating supervisory co-operation,
co-ordination and exchange of information on the supervision of
occupational pensions and on insurance intermediaries. It is also
reviewing the existing arrangements in the Siena Protocol covering
home-host issues relating to the supervision of insurers. On the
supervision of insurance groups, CEIOPS has worked on the role
of the lead supervisor and produced Guidelines for Co-ordination
Committees. Virtually all European insurance groups now have an
identified lead supervisor, and an MOU has been agreed with the
Swiss supervisory authority to facilitate co-operation in the
supervision of Swiss groups. CEIOPS has agreed a mediation mechanism,
equivalent to that developed by CEBS and CESR, and its Convergence
Committee will shortly be addressing peer review. Attention has
also been given to training and secondments, and CEIOPS has participated
fully in 3L3 projects.
CESR
9. CESR has provided formal advice to the
Commission in a number of areas including:
— the Transparency Directive, the Market
Abuse Directive, the Prospectus Directive and the Markets in Financial
Instruments Directive;
— equivalence of the generally accepted
accounting principles (GAAP) of third countries; and
— definitions concerning the eligible
assets for UCITS.
10. CESR's Review Panel is examining the
application of the measures in the Financial Services Action Plan.
It has completed a survey on the implementation of the European
Commission's Recommendation on UCITS, a review of CESR Standard
Number 1 on financial information and a comprehensive mapping
of members' supervisory powers under the Prospectus Directive
and Market Abuse Directive.
11. CESR has developed a number of operational
groups working on the practical application and day-to-day supervision
of the International Financial Reporting Standards (IFRS) and
the Market Abuse Directive, namely CESR-Fin and CESR-Pol.
12. Through CESR-Fin CESR has been closely
involved in the adoption of IFRS for all EU listed groups. CESR-Fin
has monitored the development and introduction of the EU standards
and has made recommendations on the transition to IFRS.
13. On the Market Abuse Directive CESR-Pol
has developed draft guidance on what constitutes inside information;
when it is legitimate to delay the disclosure of inside information;
when are client orders inside information and insider lists in
multiple jurisdictions.
14. CESR's achievements (through its Level
3 expert groups) include the following:
— CESR-Tech expert group is on track
in developing a Transaction Reporting Mechanism under MiFID—this
will harmonise reporting requirements in the EU.
— Econet expert group (CESR group of
economists) has developed an impact assessment methodology and
guidelines for use by all three committees in policy making.
— Investment Management expert group
has issued guidelines to facilitate cross-border notification
of UCITS.
— Mediation Task Force has finalised
a mediation mechanism to resolve disputes between members.
— MiFID expert group has delivered
Level 3 guidelines and advice on record keeping, inducements,
passporting, transaction reporting, best execution, market data
consolidation.
THE THREE
LEVEL 3 COMMITTEE
(3L3)
15. The three Level 3 Committees have established
a Strategic Policy Task Force, called 3L3, which represents all
three Lamfalussy committees. It is developing a medium term work
programme covering issues which are common to each of the Level
3 Committees, which work together to address them in a consistent
manner. These issues include: home/host, delegation of supervisory
tasks, internal governance and conglomerates. The three Committees
are also collaborating in the creation of a platform to prove
cross-sectoral training to regulators across the EU.
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