6.2.2 The Commission in its role as co-resolution authority within the SRM

While the Commission and Council are institutions which may exercise implementing powers in accordance with Article 291 TFEU, the SRB is an agency established under Article 114 TFEU. Delegating more autonomous powers to the SRB to ensure a more efficient SRM would require a Treaty change.3

In its judgment in the case Meroni v High Authority, the ECJ held that the consequences resulting from a delegation of powers are very different depending on whether it involves clearly defined executive powers the exercise of which can, therefore, be subject to strict review in the light of objective criteria determined by the delegating authority, or whether it involves a discretionary power, implying a wide margin of discretion which may, according to the use which is made of it, make possible the execution of actual economic policy. A delegation of the first kind cannot appreciably alter the consequences involved in the exercise of the powers concerned, whereas a delegation of the second kind, since it replaces the choices of the delegator by the choices of the delegate, brings about an actual transfer of responsibility. To delegate a discretionary power by entrusting it to bodies other than those which the Treaty has established to effect and supervise the exercise of this power, each within the limits of its own authority, would render the balance of powers which is characteristic of the institutional structure of the EU ineffective.5

In its judgment in the Short Selling case, the ECJ further developed the doctrine that it had established in Meroni v High Authority in relation to the powers that Article 28 Short Selling Regulation6 confers on the ESMA. It considered that it should be observed that the bodies in question in Meroni v High Authority were entities governed by private law, whereas the ESMA is a European Union entity, created by the EU legislature. It subsequently assessed that, unlike Meroni v High Authority, the exercise of the powers by the ESMA under Article 28 Short Selling Regulation is circumscribed by various conditions and criteria which limit the ESMA’s discretion. In addition, the Commission is empowered to adopt delegated acts, specifying criteria and factors to be taken into account by the ESMA. The ECJ concludes that it follows from these and other considerations that the powers available to the ESMA under Article 28 Short Selling Regulation are precisely delineated and amenable to judicial review in the light of the objectives established by the delegating authority. Accordingly, those powers comply with the requirements laid down in Meroni v High Authority. The powers that the ESMA is vested with are therefore not incompatible with the TFEU.7 The ECJ also assessed in this case, whether the requirement for the ESMA to adopt measures of general application under Article 28 Short Selling Regulation is at odds with the principle established in the Romano case.8 The ECJ recalls, in that respect, that the institutional framework established by the TFEU, in particular the first section of Article 263 TFEU and Article 277 TFEU, expressly permits Union bodies, offices and agencies to adopt acts of general application. Accordingly, the ECJ holds that it cannot be inferred from Romano that the delegation of powers to a body, such as the ESMA, is governed by conditions other than those set out in Meroni v High Authority.9

Whether or not the decision-making process developed within the SRM complies with the principle of delegation of powers to agencies as interpreted by the ECJ, is appreciated differently amongst authors.12 A major concern flagged in that respect is the stringent timeframe set out for resolution decisions.13 Lo Schiavo questions whether there should be a reconsideration of the principle of delegation of powers to agencies in order to ensure real effectiveness in resolution-making.14