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On Friday, CESR, the Committee of European Securities Regulators, published its 2007 Annual Report as part of its accountability obligations to the European Parliament. The report highlights steps taken towards key objectives - strengthening market integrity and efficiency, protecting retail investors; delivering convergence of day-to-day implementation by CESR Members; and simplifying processes for firms and issuers and delivering greater transparency on regulation. Unsurprisingly much of the focus was on the credit crisis of 2007, which continues yet, and this added a number of new key priorities to its objectives.
The report highlights the work done on rating agencies (CRAs), prospectuses, the Markets in Financial Instruments Directive (MiFID) and the Market Abuse Directive (MAD) and seems to imply it has solved all these issues. Eddy Wymeersch, Chairman of CESR, said “The year 2007 will not easily be forgotten in the history of financial markets, including their supervisors and CESR. The year was characterised by a watershed between the first half that developed without great occurrences, at least on the surface, and the second half that required us to mobilise all our forces to cope with the strong headwinds blowing from across the Atlantic.”
However, there is little self criticism in the report and one is left feeling that there is still a lot to be done. The CESR/IOSCO recommendations on rating agencies are seen largely as toothless by market commentators and there is danger of two differing levels of regulation of these given the stronger approach taken in the US. MiFID is still labouring under the discrepancies in national interpretations by supervisors and regulators across the EU – and there is little sign of improvement. Retail client protection has not noticeably improved in the past two years – the problem of cross-border boiler rooms and misleading advertising still exists despite the efforts of supervisors, the CESR and the EC.
We expect more from our supervisors and regulators!
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