EU to launch database on securities regulation

The committee of European Securities Regulators is about to launch a database giving authorities around the world information on securities regulatory decisions made within the European Union (EU), to encourage harmonised approaches.

A symbol of the more hands-off approach now favoured by the European Commission, communications officer Victoria Powell said securities regulators could check a scenario they are facing, see if it had been processed in the past, and if so, apply the same reasoning.

'We hope the database will promote convergence; we will see over time,' said Powell.

If regulators decide to act differently than in the past, this decision would be logged, as 'sometimes differences will exist for good reasons', said Powell. It is hoped this will build up an EU body of informal precedents.

Indeed, where there are contrasting approaches, the system would 'highlight where there could need to be convergence', she said, although the committee is keen to ensure this is not enforced by inflexible EU regulations.

The initiative reflects concern at the committee that divergent interpretations within Europe of International Financial Reporting Standards (IFRS) could weaken the influence of EU regulators over their development, maybe allowing USA regulators to become de facto arbiters.

What is more, the database is also designed to help non-European bodies including the United States’ Securities and Exchange Commission (SEC) make decisions on regulatory issues in ways that do not clash unnecessarily with EU decisions.

Non-EU regulators will have access to past EU decisions, although the committee has stressed that commercial confidences would not be breached.