Transcript European Commission DG Enlargement Technical Assistance

European Commission, Technical Assistance Information
Exchange Unit (TAIEX), DG Enlargement in co-operation
with the Bulgarian Chamber of Commerce and Industry
Seminar on Financial Services
Sofia, 15-16 September 2005
Introduction to the European Single
Financial Market –
Recent developments in the financial
services sector
Dr. jur. Dimitris Tsibanoulis
Legal Advisor, Bank of Greece
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Main Fields of Financial Services
Banking
Transactions on financial instruments /
Securities field
Insurance
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A Single Financial Market
Investors free to invest in instruments issued/
traded in other Member States
Intermediaries free to transact freely with clients
in other Member States
Issuers free to tap a deeper and more liquid
market
Infrastructure suppliers can make their facilities
available to market participants/users in EU
Enforcement of authorities able to prosecute
cross-border infringements
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The integration of the European financial markets
and its importance for growth and economic
development in Europe
The achievement of a fully integrated
single market is a key objective of the
European Union; that is a market allowing
for the free movement of goods and
services and for the right of EU citizens to
take up employment or establish their
business anywhere within the EU, without
discrimination, on the basis of a
harmonized set of rules and regulations.
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Why do we need an Integrated
Financial Services Market?
Long term economic benefits:
Greater market liquidity;
More efficient allocation of investment resources;
Greater freedom for investors + consumers
Lower cost of capital = increased investment;
Better return on private savings for ordinary investors
and funds will help defuse pension “time-bomb”;
More venture capital and finance for higher-risk
segments;
Increased growth, employment
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Building blocks of the Single
Market
Home country/country of origin
authorization and supervision
Mutual recognition of equivalence of
partner country authorization/supervision
Harmonisation of key regulatory
protections/rules
Close co-operation between host State
and home State authorities
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Financial Services Action Plan (FSAP)
Implementing the framework for financial markets:
action plan
The Financial Services Action Plan adopted in
May 1999 set out a road map to get rid of all
existing barriers to the integration of European
financial markets. It contained over forty
measures, both legislative and non-legislative,
which covered the entire financial services field,
from securities and banking to insurance, as well
as from major financial institutions to retail
investors.
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Financial Services Action Plan (FSAP)
The action plan for a single financial market put
forward indicative priorities and a timetable for
specific measures to achieve strategic
objectives, namely
establishing a single market in wholesale
financial services;
making retail markets open and secure;
strengthening the rules on prudential
supervision;
widening conditions for an optimal single
financial market.
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Financial Services Action Plan (FSAP)
The FSAP is designed:
- to enhance the integrity of European
markets;
- to increase investor confidence;
- to lower the costs of offering crossborder services; and
- to unify the primary markets.
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Financial Services Action Plan (FSAP)
42 legislative and “soft law” measures
to enhance the EU legislative
framework:
Common EU rule-book for securities
-
Directive 2004/39/EC on markets in financial
instruments, amending Directives 85/611/EEC
and 93/6/EEC and Directive 2000/12/EC and repealing
Directive 93/22/EEC
- Directive 2003/6/EC on insider dealing and market
manipulation
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Financial Services Action Plan (FSAP)
Single set of financial reporting standards
- Regulation (EC) No 1606/2002 of the European
Parliament and of the Council of 19 July 2002 on
the application of international accounting
standards
- Commission Regulation (EC) No 1725/2003 of
29 September 2003 adopting certain
international accounting standards in
accordance with European Parliament and
Council Regulation (EC) No 1606/2002
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Financial Services Action Plan (FSAP)
Common initial and regular disclosure
documents
- Directive 2003/71/EC on the prospectus to be published
when securities are offered to the public or admitted to
trading and amending Directive 2001/34/EC
- Transparency Directive 2004/109/EC
First steps towards EU framework for
occupational pension funds
Directive 2003/41/EC of the European
Parliament and of the Council of 3 June 2003 on
the activities and supervision of institutions for
occupational retirement provision
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Financial Services Action Plan (FSAP)
Secure and transparent environment for
cross-border restructuring of companies
- Directive 2001/24/EC of the European
Parliament and of the Council of 4 April 2001 on
the reorganisation and winding up of credit
institutions
- Directive 2001/17/EC of the European
Parliament and of the Council of 19 March 2001
on the reorganisation and winding-up of
insurance undertakings
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Financial Services Action Plan (FSAP)
Strengthening of supervision of companies
and markets
Internal Market for retail customers
Directive 2002/65/EC of the European
Parliament and of the Council of 23 September
2002 concerning the distance marketing of
consumer financial services and amending
Council Directive 90/619/EEC and Directives
97/7/EC and 98/27/EC.
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FSAP
Need for further work on integration
Markets remain fragmented
Obstacles remain
Developments and changes in the markets
call for appropriate responses
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How to achieve the goal of
integrated financial markets ?
EU financial services law-making, traditionally:
too slow
too rigid
results divorced from market reality/practice
insufficient legal certainty/uniformity to sustain
home country principle.
Response:
Lamfalussy blue-print for reform of EU legislative
process
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THE COMMITTEE OF WISE MEN ΟN THE REGULATION
OF EUROPEAN SECURITIES MARKETS
Τhe challenges facing the creation of an integrated
securities market in Europe are
that the basic legislation is not in place;
that there is still insufficient prioritization;
that the present system cannot produce quickly or
flexibly enough the type of legislation that modern
financial markets require; and
that inconsistent implementation is severely
handicapping the emergence of a pan-European market.
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Lamfalussy Model for a reformed
EU-legislative process
Consultation and Transparency
Efficient and flexible regulatory system
Regulatory convergence and co-operation
Common implementation and
enforcement.
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THE FOUR-LEVEL APPROACH RECOMMENDED BY
THE COMMITTEE
- Level 1: Framework principles to be decided by
normal EU legislative procedures (i.e. proposal
by the Commission to the Council of Ministers/
European Parliament for co-decision).
- Level 2: Establishment of two new committees –
an EU Securities Committee and an EU
Securities Regulators Committee (in a format
similar to that of FESCO) to assist the European
Commission in determining how to implement
the details of the Level 1 framework.
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THE FOUR-LEVEL APPROACH RECOMMENDED BY
THE COMMITTEE
- Level 3: Enhanced cooperation and networking
among EU securities regulators to ensure
consistent and equivalent transposition of Level
1 and 2 legislation (common implementing
standards).
- Level 4: Strengthened enforcement, notably with
more vigorous action by the European
Commission to enforce Community law,
underpinned by enhanced cooperation between
the Member States, their regulators, and the
private sector.
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Financial Services Action Plan (FSAP)
What remains to be done?
Corporate scandals, money laundering and
fight against terrorism
Follow up to the Action Plan on Company Law &
Corporate Governance
Modernisation of 8th company law directive
(statutory audit)
3rd money laundering directive
Transposition of FATF recommendation No. 7
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Financial Services Action Plan (FSAP)
What remains to be done?
Modernisation of capital adequacy rules
Base II / CAD III
Solvency II
Payment systems: Legal framework for
payments in the internal Market and
payment institutions
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Financial Services Action Plan (FSAP)
What remains to be done?
Financial Markets Infrastructure: Clearing
and Settlement / Achievement of an
integrated, efficient and safe clearing and
settlement environment in the European
Union.
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Charlie McCreevy European Commissioner for Internal
Market and Services
The integration of European financial markets –
our objectives for the coming years
(Initiative Finanzstandort Deutschland, 20.12.2004,
Frankfurt am Main, Germany)
Implementation and enforcement of the existing
legislation
The new framework puts greater emphasis on the
cooperative responsibilities of the supervisors. We want
the concept of a “consolidating supervisor’ to work and
cross-border groups not to be subject to multiplicative
requirements.
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Conclusion
Huge potential benefits from integrated
financial market
Legislative phase nearly complete
Immediate focus now on implementation
and enforcement
Need to have flexible system which allows
to adapt quickly
Need for strong involvement of
stakeholders to be successful
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