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Friday, 23th February 2001

Financial Services Policy Group discusses progress on the implementation of an integrated financial market

The ninth meeting of the Financial Service Policy Group, comprising personal representatives of Finance Ministers, took place on 22 February in Brussels under the chairmanship of Internal Market Commissioner Frits Bolkestein. The FSPG meets regularly to forge consensus between national ministries involved in financial services regulation and to review progress on the implementation of the Financial Services Action Plan (FSAP). The Plan was endorsed by the Cologne European Council in June 1999 and at the Extraordinary Lisbon European Council in March it was agreed to complete it by 2005. The Group concentrated discussion on 2 points : (i) the need to make rapid progress on the issue of e-commerce in financial services, and (ii) the findings of the Group of Wise Men on the Regulation of European Securities Markets

E-Commerce and Financial Services

The Commission's Communication on E-Commerce and Financial Services of 7 February (see IP/01/185 and MEMO/01/33) offers a policy framework for progress on addressing certain policy issues that arise from the implementation of the Directive on a legal framework for electronic commerce adopted on 8th June 2000 (see IP/00/442). The Commission's Communication suggests a policy approach based on:

  • a high-level of harmonisation in consumer and retail investor protection rules and a review of national financial services contracts to see how services can be offered throughout the Community in conditions of legal certainty;

  • targeted measures to build consumer trust, such as the out-of-court redress mechanism which was recently introduced (FIN-NET 'Cross-Border Out of Court Complaints Network for Financial Services' see IP/01/152). Further efforts should be made to build confidence in the security of electronic payments;

  • increased co-operation between EU-supervisory authorities to make sure that they are up-to-speed to monitor and enforce electronic business.

At the request of the Economic and Financial Affairs Council (ECOFIN), the FSPG considered the broad political lines of the Communication. The majority of Delegations welcomed the Commission's proposal for the overall policy framework designed to encourage the development of e-commerce in financial services.

The FSPG discussed the comprehensive strategy underpinning this policy framework which includes an analysis of national provisions which Member States might wish to continue to impose on incoming services; how these would relate to the E-Commerce Directive, a review of national rules in retail financial services contracts to establish a basis on which financial services can be offered throughout the Community in a framework of legal certainty and the legal interface with the Rome and Brussels Conventions.

In view of the fact that the E-Commerce directive will need to be implemented in Member States' legislation by 17 January 2002, and that there exists a number of complex issues, such as legal certainty under private international law, that require careful consideration, the FSPG agreed to discuss this further at its next meeting in order to provide the ECOFIN Council in May with a more in-depth view.

Report of the Committee of Wise Men

The FSPG discussed with the Chairman of the Committee of Wise Men, Baron Alexander Lamfalussy, the findings and recommendations of the Wise Men's final Report which was released on 15 February.

Personal representatives of ECOFIN ministers supported the Lamfalussy Group's central recommendations to have faster decision-making on securities legislation in line with the needs of modern financial markets. Delegations stressed the importance of decision making within the confines of the present Treaty. There was broad support on the need to build on the expertise of national regulators & market experts. The suggestions of the Committee of Wise Men on regulatory reform to achieve these objectives were considered to be very positive contributions to resolve the shortcomings of the present system. The FSPG also supported the need for a gradual convergence of national regulatory structures.

The FSPG broadly supported the recommendations and seven priority actions for the Financial Services Action Plan and agreed that efforts should be made to accelerate their adoption.

Progress on Financial Services Action Plan measures

The FSPG discussed progress on the measures and noted that the Commission had made four new legislative proposals (Draft Accounting Regulation, Pension Funds, Insurance Intermediaries, Insurance Solvency) and three communications (Investment Services Directive, Profession/Sophisticated Investors, E-Commerce and Financial Services) since the last meeting of the Group. The Commission will issue further proposals before the summer (proposals for directives on prospectuses, collateral, market abuse, regular reporting, a securities committee, financial conglomerates, and new bank capital rules). The FSPG noted that the Commission will complete the majority of its actions under the FSAP by this summer and that the focus of work will turn to the Council and the European Parliament.

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