-The European Association of Co-operative Banks (EACB) very much questions whether there is really a need for such a high degree of revision of the ISD as planned. Regarding the general approach to legislation, the EACB view is that the right approach is a system based on mutual recognition, built around a set of harmonized core standards, leaving some discretion in individual member states to flex the regime to suit their particular circumstances.”
This approach should particularly be considered concerning the conduct of business rules, whereby full harmonisation is strived for on the basis of the CESR proposals. The planned revision of the retail business segment by incorporating a very high level of detail would compel the institutions to undertake important changes of existing contracts and organisational structures. Those were established on the basis of the ISD currently in force. Their modification will be very burdensome.
Thus, EACB supports the view of the European Parliament that the necessity of a revision of the ISD should be examined separately for each sphere of regulation within the ISD. On the other hand, it is not always evident to us that the planned modifications will result in a higher degree of investor protection.
EACB takes the view that a cost-benefit appraisal (for institutions and investors) of the new concepts executed by the CESR would offer some useful guidance in this respect since the expense incurred in implementation will most probably lead to transactions becoming more expensive for investors.
Comments on the Discussion Paper on the Revision of the Investment Services Directive
© EACB - European Association of Co-operative Banks
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