Abstract

This Paper represents author's LL.M Thesis (Institute for Law and Finance of the Johann Wolfgang Goethe University, Frankfurt am Main, 2006) in which the author argues for the establishment of a pan-EU securities regulator as a central hub of national regulators which would press out the 'institutional vacuum' between supranational regulation and national level of enforcement and enhance regulatory cooperation. The emergence of a centralized securities (financial services) regulator is inevitable, but the main question is the degree of centralization and scope of its powers. The author argued for a pragmatic approach which would not require a Treaty change and has tried to prove that the Committee of European Securities Regulators (CESR) already exercised most of the functions inherent to regulatory agencies for internal market. As a central hub of a transnational regulatory network, the Agency could co-ordinate supervision between national supervisors and also exercise investigative and enforcement powers. A principle of subsidiarity and a concept of balance of powers preclude creation of a more centralized regulator. However, the model of a Regulatory Agency for Internal Market may serve as a precursor for a ‘hard’ securities regulator. The author does not argue this would be the best model, but is convinced that this model would be the most pragmatic: not to lax, but allowing for a centralised decision making and decentralised co-coordinated enforcement.

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