| EU heave on five areas for single financial market |
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The European Commission has identified five key areas for priority action that will underpin the efforts of its Financial Services Action Plan in establishing a comprehensive internal EU market in financial services.
In its latest progress report, the Commission says that in order to reach the target of 2005 set by the Lisbon summit for the completion of the plan, its implementation must be accelerated.
The five areas highlighted for priority action are the enhanced comparability of companies’ financial statements, a single passport for equity issuers, the elimination of barriers to pension fund and UCITS investments, improved functioning of cross-border sale and repurchase markets, and a fundamental review of the Investment Services Directive.
The Commission is currently preparing a new proposal for market information that will introduce simplified ‘shelf registration’ techniques for companies that wish to have their shares publicly traded. This proposal will support previous legislation designed to facilitate multiple listings and cross-border share offerings.
A proposal is expected from the Commission over the next few months regarding the adoption of a single set of accounting standards for publicly traded companies within the EU. This is regarded as the best means of securing the transparency and disclosure needed to underpin cross-border securities trading.
Likewise a Commission proposal is expected this summer for a directive on occupational pension funds, which will require strict prudential supervision allied to a loosening of quantitative investment restrictions. Restrictions as to what UCITS funds can invest in are also expected to be eased.
In addition, the Commission is preparing a proposal on a directive to facilitate cross-border collateralisation techniques and so eliminate an important source of legal uncertainty. The necessary legislative proposals are anticipated by the start of 2001.
A wide-ranging consultation on the future of the Investment Services Directive - the cornerstone of the EU single market regulatory framework for investment firms - will be launched by the Commission this summer. The review will focus on the ‘single passport’ aspect of the directive and the implications of fundamental changes in the role of the securities exchanges.
Finally, the Commission will be making new legislative proposals to tackle the prudential issues raised by mixed bank/ insurance groups - financial conglomerates - by early 2001. |
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| Article appeared in the June 2000 issue.
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