03 April 2001

EP adopted Commission Communications on Investment Services Directive

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In adopting the report by Piia-Noora Kauppi and Giorgios Katiforis, the European Parliament adopted two resolutions calling for a revision of the 1993 Investment Services Directive, with the new legislation relating to cross-border investments to be based on home country supervision. MEPs believe a light regulatory regime should apply to professional investors. The commission were called on to look at the possibility of extending the system to third countries where reciprocity could be available. MEPs took the view that information to be provided to investors should be indicated in the commission's legislative proposal.

During the debate, Commissioner Fritz Bolkestein agreed with the criticisms that were in the parliament's resolutions and also made in the debate - that the aims of the single market in investment services had not been achieved by the current legislation. He agreed on the need to move towards home country supervision and a new approach to promote transparency, integrity and protection for investors. He warned, however, that revised legislation would not in itself prevent turbulence on the markets. He promised to consider carefully the parliament's concerns over the definition of 'professional' investors, recognising that the proposed definition would exclude numerous groups, although he did say that it was based on the consensus view of national regulators. He also agreed that the procedures of the Lamfalussy report could be applied to the new legislation.

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