Einde inhoudsopgave
EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/3.II.5.2
3.II.5.2 Minimum harmonisation
mr. J.E.C. Gulyás, datum 01-02-2021
- Datum
01-02-2021
- Auteur
mr. J.E.C. Gulyás
- JCDI
JCDI:ADS266815:1
- Vakgebied(en)
Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht
Voetnoten
Voetnoten
The principle of minimum harmonisation was a strategy to achieve political agreement within the EU. The Commission noted that ‘(i)n principle (…) mutual recognition could be an effective strategy for bringing about a common market in a trading sense’ (Commission, White Paper from the Commission to the European Council: Completing the Internal Market, 14 June 1985(COM(85) 310 final), p. 18 and B. Steil, European Equity Markets: The State of the Union and an Agenda for the Millennium, ECMI, 1996, p. 114).
The Commission noted that minimum harmonisation ‘would be quicker and more effective if the Council were to agree not to allow the unanimity requirement to obstruct progress where it could otherwise be made (…). In principle (…) mutual recognition could be an effective strategy for bringing about a common market in a trading sense.’ (Commission, White Paper from the Commission to the European Council: Completing the Internal Market, 14 June 1985(COM(85) 310 final), p. 18).
Commission, Proposal for a Council Directive on investment services in the securities field, 16 December 1988, p. 4.
For an examination of the national pre-trade transparency regulations, reference is made to paragraph 3 above.
Another element that made the final ISD position bottom-up was the minimum harmonised nature of the pre-trade transparency rule. In its ISD proposal, the Commission left room for separate national legal systems, but proposed some harmonization of minimum standards across the EU. The aim of the minimum harmonised standards was to limit the scope for competition among national rules.1 Minimum harmonisation was a tool to achieve political agreement.2 The Commission proposed no harmonised ISD transparency rules. The Commission only focused on access requirements for ‘stock exchanges’ (without providing a definition).3
The Commission’s position concerning minimum harmonisation was maintained during the subsequent negotiations in the Council. However, as indicated above, the Southern and Northern Member States were divided on introducing, and if so to which extent, transparency rules under the ISD. Reflecting a compromise position, one pre-trade transparency rule for RMs was introduced (see paragraph above). Following the Commission’s overall approach towards minimum harmonisation, the ISD pre-trade (and post-trade) transparency rule(s) for RMs were minimum harmonised.4
Whilst FESCO was satisfied that the ISD laid down some basic (minimum harmonised) requirements, FESCO was overall dissatisfied with the ISD approach. FESCO noted that, for the maintenance of public confidence in RMs, some areas required fuller and more explicit regulatory standards.5 FESCO believed that fair and orderly trading on RMs required, among other things, common EU pre-trade transparency rules. FESCO provided RM guidance for pre-trade data publication in addition to the ISD-text. The guidance of FESCO was visible in most of the national pre-trade transparency regulations for RMs across the individual Member States.6
In sum, the minimum harmonised nature of the ISD pre-trade transparency rule made the ISD regime bottom-up in character. Member States and, where permitted by national law, the market (RMs) were permitted to introduce stricter pre-trade transparency rules. The FESCO guidance added top-down elements to the ISD pre-trade transparency regime. However, given the formally non-binding status and sometimes broad principles of FESCO (e.g. FESCO’s broad pre-trade transparency exceptions), the overall ISD pre-trade transparency framework remained bottom-up in nature.