People sit outside the headquarters of the European Securities and Markets Authority in Paris.
Consumer complaints: Esma is one of three top regulators criticised © Bloomberg News

Investors have been left almost voiceless on major European rule changes because the regulators have left them off consultation panels, a lobby group has claimed.

Europe’s three top regulators have thrashed out far-reaching rule changes including the clampdown on over-the-counter derivatives markets without proper input from consumers, it claims.

The accusations are a fresh blow for fund manager watchdog the European Securities and Markets Authority (Esma), which has been dogged by claims it is woefully understaffed since it was launched in January 2011.

The lobby group’s claims centre on the fact the regulators have added institutional representatives to their panels as “financial services users”. It is alleged that European rules call for “retail users” of financial services to take these seats.

“The law is crystal clear. There should be balanced representation,” said Guillaume Prache, head of the European Federation of Financial Services Users (EuroFinuse), the lobby group behind the claims.

Mr Prache also chairs Esma’s consultation panel, the Securities and Markets Stakeholder Group, but members are appointed by the regulators. Only three to four of the 30 members on each committee are genuine consumer advocates, according to Mr Prache.

Peter De Proft, the head of European asset manager trade body Efama, is among the members of Esma’s panel to be listed as financial services users. Also in that bracket is Lars Hille, head of German lender DZ Bank’s capital markets business. Esma panellists listed as institutional members include Xavier Rolet, chief executive of the London Stock Exchange and a former Lehman Brothers and Goldman Sachs banker.

Monique Goyens, director-general of Europe-wide investor interest group BEUC, said the big banks would continue to dominate regulatory debate until the regulators added consumer advocates to the panels. “The expertise is with the banks so they have the voice and they have the ear of the regulators and the decision makers,” she said.

EuroFinuse said the reason for the lack of consumer advocates on the panels is that the regulators have failed to provide adequate financial and secretarial support.

Panel members receive €18.75 gross per hour, EuroFinuse said. This is 70-85 per cent less than the amount received by financial services user group members elsewhere in the European Commission, according to the organisation’s calculations. “They claim informally that it is very difficult to find competent representatives on the user side. That is their main argument, and they are right – because they don’t help the user side,” Mr Prache said.

This leaves consumer lobbyists with a “lack of people, a lack of time, a lack of resources”, Mr Prache said.

The claims have been made public after EuroFinuse published its filing to a consultation by the commission on its new regulatory structure.

But consumer groups first raised the issue in a European Ombudsman complaint relating to the London-based European Banking Authority’s stakeholder panel in September 2011 – which has not yet been concluded. Mr Prache said the decision to go public comes as the European regulators are deciding on new memberships for the panels. By law they are required to elect new members every two-and-a-half years.

A commission spokesperson said its Directorate General for Internal Market and Services was examining responses to the consultation and expects to publish a summary in September. Efama declined to comment. Esma, the EBA and another of the regulators, the European Insurance and Occupational Pensions Authority, also declined to comment.

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