Chemin de navigation

Left navigation

Additional tools

Autres langues disponibles: FR DE


Brussels, 25th March 2002

Financial Services: further open consultation on revision of the Investment Services Directive

The European Commission's Internal Market Directorate-General has launched a second and final round of open consultation on possible amendments to the Investment Services Directive (ISD - 93/22/EEC), aimed at facilitating the emergence of efficient, integrated and orderly EU financial markets. The Commission services have made substantial changes to their initial suggestions as a result of the 77 responses received to the first round of consultation launched in July 2001 (see IP/01/1055). Those who so wish now have a further chance to comment before the Commission presents a formal proposal to the European Parliament and Council of Ministers in late 2002. This extensive dialogue with interested parties is in line with the approach to financial services legislation agreed with the Parliament and Council and based on the recommendations of the Lamfalussy Committee on the Regulation of European Securities Markets (see IP 02/195). The latest consultation document is available on the Commission's Europa website at: The deadline for comments is 31 May 2002.

Internal Market Commissioner Frits Bolkestein said: "Updating the Investment Services Directive is a crucial part of the Financial Services Action Plan and part of the EU's drive towards dynamic financial markets that will stand the test of time. We are launching this final round of consultation because we are determined to get financial services legislation right. That means close and continuous consultation with everyone who will be affected by it, in line with our agreement with the European Parliament and the Council on implementing the Lamfalussy proposals."

The 77 responses that the Commission received during the first round of consultation came from a broad range of sources including supervisory authorities, regulators, exchanges, financial institutions and others. A summary of these responses is also available on the Europa website at the above address.

This feedback confirmed that the main regulatory issues that ISD revision needs to address are:

  • updating investor protection safeguards to help investors profit fully from a wider range of investment services

  • enabling investment firms to provide services across borders on the basis of home country authorisation and supervision

  • improving the working of markets and avoiding market fragmentation by establishing a level playing field between different ways of executing investment orders through, for example:

  • "regulated markets" such as stock exchanges

  • Alternative Trading Systems (which enable market participants to trade at different terms than on the stock exchange)

  • "in-house" order-matching by banks who execute client orders to buy/sell securities against other client orders or their own trading positions.

However, in order to serve these objectives better and in the light of detailed comments made by some respondents, the Commission services have made a number of changes to the earlier suggestions. These include:

  • fine-tuning investor protection obligations to take account of new forms of investment services

  • broadening the scope of the Directive to include, among other things, investment advice and trading of commodity derivatives

  • simplifying the classification of order-execution systems and making it more flexible. The future ISD would not dictate whether a particular trading system should be defined as an investment firm or as a regulated market

  • a greater emphasis on ensuring that different trading systems performing similar functions are subject to comparable regulation

  • clarifying requirements for the disclosure of quotes or details of transactions performed off-exchange. It is suggested that these transparency obligations be limited to equity transactions

  • streamlining the high-level principles for regulated markets. Regulated markets would be able to compete for liquidity without jeopardising the orderly and efficient operation of European securities markets, or the interests of issuers and investors.

The Commission will also host a hearing in Brussels on 22 April 2002 concerning the new consultation. This will be open to interested parties and journalists, and take place in the Borschette Conference Centre, Brussels. Details of this hearing (preliminary agenda, registration form) are available from the above website or from fax + 32-2-299-30-56, tel. + 32-2-298-49-77.

Side Bar