- According to The Oxford English Dictionary (Oxford, Clarendon Press, 2nd edn, 1991) vol II, 1035, “centralisation” means “the action of centralising or the fact of being centralised; gathering to a centre or the concentration of administrative power in the hands of a central authority, to which all inferior departments, local branches, etc. are directly responsible. Centre means the point round which a circle is described; the middle point of a circle or sphere, equally distant from all points on the circumference; a point towards which things tend, move or are attracted or a point from which things, influences, etc. emanate, proceed, or originate.” Centralisation and centre are used synonymously in this article, as are decentralisation and decentre (see infra, n 2).
- According to The Oxford English Dictionary (Oxford, Clarendon Press, 2nd edn, 1991), vol IV, 327, “decentralisation” means “the action or fact of decentralising; decentralised condition. In Politics: the weakening of the central authority and distribution of its functions among the branches or local administrative bodies. To decentralise means to undo the centralisation of; to distribute administrative powers, which have been concentrated in a single head or centre.”
- Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Arts 81 and 82 of the Treaty; [2003] OJ L1/1, 1–25. It has applied since 1 May 2004.
- Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council, and repealing Council Directive 93/22/EEC [2004] OJ L145, 1–44. See also Proposal for a Directive of the European Parliament and of the Council on Investment Services and Regulated Markets, and amending Council Directives 85/611/EEC, Council Directive 93/6/EEC and European Parliament and Council Directive 2000/12/EC, 19 November 2002, COM (2002) 625 final, 2002/0269 (COD).
- Council Regulation No 17 of 6 February 1962, First Regulation implementing articles 81 and 82 of the Treaty, [1962] OJ 13, 204/62, as last amended by Regulation (EC) No 1216/1999 ([1999] OJ L148, 5).
- White Paper on Modernisation of the Rules Implementing EC Treaty, Arts 81 and 82 (formerly EC Treaty, Arts 85 and 86), Commission Programme No 99/027 (1999/C 132/01), [1999] OJ C132, Executive Summary.
- A discussion of this point of view is outside the scope of this article. For further details, see R Whish, “Regulation 2790/99: The Commission's ‘New Style’ Block Exemption for Vertical Agreements” (2000) 37 Common Market Law Review 887; J Lever and S Neubauer, “Vertical Restraints, their Motivation and Justification” (2000) 21 European Community Law Review 7; Z Biro and A Fletcher, “The EC Green Paper on Vertical Restraints: An Economic Comment” (1998) 19 European Community Law Review 129; AJ Riley, “Vertical Restraints: A Revolution” (1998) 19 European Community Law Review 483; V Korah, “The Future of Vertical Agreements Under EC Competition Law” (1998) 19 European Community Law Review 506; EJ Mestmäcker, “The EC Commission's Modernisation of Competition Policy: A Challenge to the Community's Constitutional Order” (2000) 1 European Business Organisation Law Review 401.
- Communication from the Commission—Financial Services: Building a Framework for Action; COM/98/0625 final. See also N Moloney, “II. The Lamfalussy Legislative Model: A New Era for the EC Securities and Investment Services Regime” (2003) 52 International and Comparative Law Quarterly 2, 509–10.
- A discussion of this point of view is outside the scope of this article. For further details, see: Moloney, supra n 8, 509–10; see generally N Moloney, EC Securities Regulation (Oxford University Press, 2002); Y Avgerinos, Regulating and Supervising Investment Services in the European Union, (Basingstoke, Palgrave Macmillan, 2003); P Nobel, Swiss Finance Law and International Standards (Berne, Stämpfli Publishing Ltd and The Hague, Kluwer Law International, 2002), 190–92, 229–37; C Bates, “European Regulatory Reform: The Pace Quickens” [2003] Butterworths Journal of International Banking and Financial Law 121; J Herbst, “Revision of the Investment Services Directive” [2003] Journal of Financial Regulation and Compliance 211; J Gray and M Stoneham, “The EU Financial Services Action Plan: Quantum Leap or Incremental Progression?” [2001] Journal of International Banking Regulation 58.
- For the purpose of this article, the terms “actor” and “participant” are used as synonyms. The following three broad categories of actors with their own functions are distinguished: (1) official international and supranational institutions, authorities and courts; (2) national institutions, authorities and courts; (3) companies—regulated firms and other companies—and individuals. However, more detailed classifications are possible: not least for the purpose of the enrolment analysis, Black locates an extremely wide range of actors in the financial services area. J Black, “Mapping the Contours of Contemporary Financial Services Regulation” (2003) ESRC Centre for Analysis of Risk and Regulation Discussion Paper No 17, 10–11. If specific actors are addressed in this article, they will be named explicitly.
- T Besley, “Decentralising Governance” (2002) 3 Risk & Regulation 8.
- See supra n 3, Introduction; Proposal, supra n 4, 7–8.
- For competition law, see C Baudenbacher, “Modernisierung der Europäischen Wettbewerbspolitik—Zweiter Akt” (2000) 10 European Law Reporter 326. For financial services law, see Building a Framework for Action, COM (1998) 625 final; Moloney, supra n 8, 509–10.
- Black, supra n 10, 10–11; J Black, “Critical Reflections on Regulation” (2002) ESRC Centre for Analysis of Risk and Regulation Discussion Paper No 4, 2–7.
- Black, supra n 10, 3. To the basic issue of how regulation can be exercised, see Black, supra n 14, 15.
- Regulation No 17 of 1962, see supra n 5.
- For an introduction, see R Whish, Competition Law (London, Butterworths Law, 5th edn, 2003); M Furse, Competition Law of the EC and UK (Oxford University Press, 4th edn, 2004).
- Regulation No 17 of 1962, Art 9(3), see supra n 5. For a discussion of the weaknesses see: supra n 6, White Paper, Executive Summary and 9–11, 23–24, 26–28; supra n 13, Baudenbacher, 326.
- See supra n 3, Regulation 1/2003. See also the Proposal for a Council Regulation on the Implementation of the Rules on Competition Laid Down in EC Treaty, Arts 81 and 82 and Amending Regulations (EEC) No 1017/68, (EEC) No 2988/74, (EEC) No 4056/86 and (EEC) No 3975/87 COM (2000) 582 final.
- See supra n 6, White Paper, 3.
- Art 81(3) EC; see supra n 3, Regulation 1/2003.
- See supra n 6, White Paper, 19–20.
- Arts 169 and 177 EC.
- See supra n 6, White Paper, 22–26; Arts 11–16, Regulation 1/2003, supra n 3.
- Commission Notice on Cooperation within the Network of Competition Authorities, [2004] OJ C101, 43–53.
- M Monti, “A reformed competition policy: achievements and challenges for the future” (2004) 3 Competition Policy Newsletter 3–4.
- Art 234 EC.
- HG Gharawi, “The Proper Scope of Arbitration in European Community Competition Law” [Winter 1996] Tulane European and Civil Law Forum 185, 185–88; C Baudenbacher and I Higgins, “Decentralisation of EC Competition Law Enforcement and Arbitration” (2002) 8 Columbia Journal of European Law 1, 2–3.
- On arbitration, see Arbitration and Alternative Dispute Resolution, How to Settle International Business Disputes (International Trade Centre, Geneva, 2001); A Redfern and M Hunter, Law and Practice of International Commercial Arbitration (London, Sweet & Maxwell, 3rd edn, 1999); C Hopfe, “The Rise of International Commercial Arbitration and the Demise of Judicial Recourse: Whatever Happened to ‘Public Policy’?” (1998) 9 World Arbitration & Mediation Report 263; GB Born, International Commercial Arbitration in the United States: Commentary & Materials (Boston and Deventer, Kluwer Law and Taxation Publishers, 1994); E Cotran and A Amissah (eds), Arbitration in Africa (The Hague, Kluwer Law International, 1996); M Pryles, Dispute Resolution in Asia (Hague, Kluwer International, 2nd edn, 2002); J Paulsson, P Sanders and AJ van den Berg (eds), International Handbook on Commercial Arbitration: National Reports and Basic Legal Texts (The Hague, Kluwer Law International, 1984–, published in cooperation with the TMC Asser Institute for International Law) vols 1–4; AJ van den Berg, New York Convention of 1958 (London, Kluwer, 2nd edn, 1996); Guide to ICC Arbitration (ICC Publishing, 1994); M Rubino-Sammartano, International Arbitration Law and Practice (The Hague, Kluwer Law International, 2nd edn, 2001).
- N Shelkoplyas, “European Community Law and International Arbitration: Logics That Clash” (2002) 3 European Business Organization Law Review 569, 570; see also Gharawi, supra n 28, 185–88.
- Case C–102/81, Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co. KG [1982] ECR 1095, at para 14; Case C–126/97, Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I-3055. See also Baudenbacher and Higgins, supra n 28, 3, with further references; Gharawi, supra n 28, 188–92.
- See Baudenbacher and Higgins, supra n 28, 15–17; Gharawi, supra n 28, 197–99.
- Baudenbacher and Higgins, supra n 28, 14–18.
- See Shelkoplyas, supra n 30, 575; Case C–126/97, supra n 31.
- See supra n 4, Directive 2004/39/EC.
- Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field; [1993] OJ L141, 27–46; see generally Moloney, supra n 9.
- Proposal, Explanatory Memorandum, supra n 4, 3.
- Building a Framework for Action, COM (1998) 625 final; Moloney, supra n 8, 509–10 and generally with regard to the development of an integrated market: G Hertig and R Lee, “Four Predictions about the Future of EU Securities Regulation” (2003) 3 Journal of Corporate Law Studies 359.
- FSAP, COM (1999) 232 final, Implementing the Financial Services Action Plan.
- See Proposal, Explanatory Memorandum, supra n 4, 3–5.
- See Proposal, Explanatory Memorandum, supra n 4, 8–28; see critically Hertig and Lee, supra n 38, 3–20; and for a positive point of view, see M McKee, “The Unpredictable Future of European Securities Regulation: A Response to Four Predictions about the Future of EU Securities Regulation by Gerard Hertig and Ruben Lee” (2003) 18 Journal of International Banking Law and Regulation 277, 277–83.
- See Proposal, supra n 4, 32–33.
- ibid, 32–33.
- See critically infra, Section C.
- See Moloney, supra n 8, 511.
- Commission Decision 2001/527/EC.
- See Proposal, supra n 4, 43.
- European Governance: A White Paper, COM (2001) 428 final, 25 July 2001, 11–18. See also Ref. CESR/01-007b.
- N Moloney, “New Frontiers in EC Capital Markets Law: From Market Construction to Market Regulation” (2003) 40 Common Market Law Review 809, 813–17; see also C Scott, “The Governance of the European Union: The Potential for Multi-level Control” (2002) 8 European Law Journal 1, 59, 62, 74–76, in the same sense in relation to governance at the European level. See also European Governance: A White Paper, supra n 48.
- ESC; Commission Decision 2001/528/EC.
- Moloney, supra n 49, 813–17; C Scott, supra n 49, 62, 74–76, in the same sense in relation to governance at the European level. See also European Governance: A White Paper, supra n 48.
- See Black, supra n 10, 10–11.
- Proposal, supra n 4, 31–32 and the directive, Art 49.
- Proposal, supra n 4, 28–32.
- Proposal, supra n 4, 32.
- Proposal, supra n 4, 32.
- A discussion of the goal of regulation in general is outside the scope of this article. See for this topic Black, supra n 14, 7, with further references.
- See the White Paper on European Governance, supra n 48, 11, 20.
- See J Black, “Decentring Regulation: Understanding the Role of Regulation and Self-Regulation in a ‘Post-regulatory’ World” (2001) 54 Current Legal Problems 103, 103–46. See also L Hancher and M Moran, “Organizing Regulatory Space”, in L Hancher and M Moran (eds), Capitalism, Culture, and Economic Regulation (Oxford University Press, 1989); C Scott, “Analysing Regulatory Space: Fragmented Resources and Institutional Design” [2001] Public Law 329; G Teubner, Dilemmas of Law in the Welfare State (Berlin, De Gruyter, 1985); C Scott, “Regulating Constitutions”, in C Parker, C Scott, N Lacey and J Braithwaite (eds), Regulating Law (Oxford University Press, 2004), 226–245.
- Black, supra n 14, 2–7, with further references. Black's decentred understandings of regulation deal with five perspectives or central notions, which serve to seize or analyse decentred systems of regulation: complexity, fragmentation, interdependencies, ungovernability, and the rejection of a clear distinction between public and private.
- The word “delegation” might be used instead of “fragmentation”, yet the former is to be understood as an authoritative decision that transfers policy-making authority away from established, representative organs to a non-majoritarian institution, whether public or private. This definition implies that it is largely used as a policy method, which should not always be the case with fragmentation. M Thatcher and A Stone Sweet, “Theory and Practice of Delegation to Non-Majoritarian Institutions” (2002) 25 West European Politics 1, 3; M Thatcher, “Delegation to Independent Regulatory Agencies: Pressures, Functions and Contextual Mediation” (2002) 25 West European Politics 125, 125–31; M Shapiro, “Judicial Delegation Doctrines: The US, Britain, and France” (2002) 25 West European Politics 173, 173–75.
- See also in this sense Black, supra n 14, 3–4, with further references.
- In the same sense, see RM Lastra, “The Governance Structure for Financial Regulation and Supervision in Europe” (2003) 10 Columbia Journal of European Law 49, 62; for the principal-agent approach, see Thatcher and Stone Sweet, supra n 61, 3; Thatcher, supra n 61, 125–31; Shapiro, supra n 61, 173–79.
- Scott, supra n 49, 68; Black, supra n 14, 6.
- See supra Section B.2 at Enforcement.
- H Willke, Systemtheorie III: Steuerungstheorie (Stuttgart, Lucius & Lucius, 2nd edn, 1998) 112–25.
- ibid, 112–25.
- See supra n 46 and n 50.
- Black, supra n 14, 3.
- See in this sense Black, supra n 14, 5–6, with further references.
- In this context, and with regard to the new governance structures to be introduced both in competition and financial services law, it is interesting to note another important discrepancy between them which has led to the present, new situation in each case. The fact that a single authority has always governed competition law while the financial services sector does not know any single authority certainly has greatly influenced the formulation of new rules and still influences the way the actors concerned interact among each other. In the financial services sector, each country always has had its own, individual organisation of supervision and its own institutions. In that area, the discussion concerning the creation of a single authority has just been launched. On the other hand, in the area of competition, the discussion focuses on the question of attribution of powers to the national competition authorities. See White Paper, supra n 6; Regulation No 1/2003, supra n 3; also see, among others, K Lannoo, Does Europe Need an SEC? (ECMI = European Centre for Minority Issues, Madrid (http://www.ecmi.es/), 1999); RS Karmel, “The Case for a European Securities Commission” (1999) 38 Columbia Journal of Transnational Law 9. Similar discussions are going on in the US regarding the decentralisation of supervision of securities regulation; see RS Karmel, “Reconciling Federal and State Interests in Securities Regulation in the United States and Europe” (2003) 28 Brooklyn Journal of International Law 495; regarding the creation of a national corporate law, see L Bebchuk, A Cohen and A Ferrell, “Does the Evidence Favor State Competition in Corporate Law?” (2002) 90 California Law Review 3; L Bebchuk and A Ferrell, “Federalism and Corporate Law: The Race to Protect Managers from Takeovers” (1999) 99 Columbia Law Review 1168; RS Karmel, “Is it Time for a Federal Corporation Law?” (1991) 57 Brooklyn Law Review 55.
- Black, supra n 14, 5.
- For more details, see http://www.iosco.org/library/index.cfm?section=mou_main, last accessed on 6 August 2005.
- Willke, supra n 66, 112–25.
- Thatcher, and Thatcher and Stone Sweet, supra n 61.
- See supra Section B.2.
- See in this sense Black, supra n 14, 4–5, with further references.
- For self-regulation, see I Ayres and J Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (Oxford University Press, 1992), 101–31; R Baldwin and M Cave, Understanding Regulation, Theory, Strategy, and Practice (Oxford University Press, 1999), 125–37; J Black, “Constitutionalising Self-regulation” (1996) 59 Modern Law Review 24, 24–55.
- Baldwin and Cave, supra n 78, 126–33.
- See supra Section B.2.
- See Shapiro, supra n 61, 173–79 and 186–92.
- Besley, supra n 11, 8; G Majone, “The European Commission: The Limits of Centralization and the Perils of Parliamentarization” (2002) 15 Governance: An International Journal of Policy, Administration, and Institutions 375.
- See J Frug, “Decentering Decentralization” (1993) University of Chicago Law Review 253, 253–58.
- Majone, supra n 82, 375.
- ibid, 382–83; R Baldwin, Rules and Government (Oxford, Clarendon Press, 1995), 273–83; Thatcher and Stone Sweet, supra n 61, 3–9.
- G Majone, “Delegation of Regulatory Powers in a Mixed Polity” (2002) 8 European Law Journal, 319, 322; see also K Lenaerts and A Verhoeven, “Institutional Balance as a Guarantee for Democracy in EU Governance”, in C Joerges and R Dehousse (eds), Good Governance in Europe's Integrated Market (Oxford University Press, 2000), 35–88.
- European Governance: A White Paper, supra n 48, 10. A discussion of the sense and adequacy of these principles is outside the scope of this article.
- See, eg Scott, supra n 49, 74–76; see also European Governance: A White Paper, supra n 48, 11–18.
- Majone, supra n 82, 376–77; also Baldwin, supra n 85, 277–85.
- H Davies, “Five Tests of the Single Financial Market”, presentation before the Belgian Financial Forum, April 2003; text available at http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2003/SP125.shtml, last accessed on 6 August 2005.
- Majone, supra n 86, 336.
- Majone, supra n 86, 329; see also Baldwin, supra n 85, 271–85, according to whom the reasons for the weaknesses of the models are due to a problem of legitimation of the institutions.
- Some of these points have been discussed in the models; see supra Section B.
- For this topic see, eg Lannoo, supra n 71; Hertig and Lee, supra n 38, 14–16.
- Although some authors imply that this is the case; Hertig and Lee, supra n 38, 14–16.
- Moloney, supra n 8, 516–17.
- See supra Section B.2.
- See supra Section B.1.
- As already stated, they are the main characteristics of the models; see supra Section B.
- See, in the same sense in relation to European Governance, Scott, supra n 49, 64.
- See supra Section B.2.
- Baldwin, supra n 85, 59–62, 271–83; M Zander, The Law-Making Process (Cambridge University Press, 6th edn, 2004), 108–24, with an Anglo-American comparison.
- For the whole, see Financial Services and Markets Act 2000 (FSMA), Part X, Rules and Guidance, ss 138–47.
- See also B Hutter and M Power, “Risk Management and Business Regulation” (2000) ESRC Centre for Analysis of Risk and Regulation, CARR Launch Paper, 1.
- See C Briault, “Revisiting the Rationale for a Single National Financial Services Regulator” (2002), FSA Occasional Paper Series 16.
- FSMA s 155.
- FSMA s 157.
- SESTA, SR 954.1.
- For a review of the arguments, see Baldwin, supra n 85, 85–119, 271–87.
- Willke, supra n 66, 112, 125.
- See G Majone, “The New European Agencies: Regulation by Information” (1997) 4 European Journal of Public Policy 262; Majone, supra n 82, 382–83; Majone, supra n 86, 336.
- See Majone, supra n 82, 383–88.
- Willke, supra n 66, 112–21.
Journal of Corporate Law Studies
Volume 5, 2005 - Issue 2