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CESR has issued its revised proposals for the harmonization of conduct of business rules. The second round of public consultation covers the following documents: the revised proposal for the investor protection regimes (Ref.CESR/01-014),and the revised paper on the categorisation of investors (Ref.CESR/01-015.). The process of revision of the initial proposals and an explanation of major changes has been given in a cover-note (Ref. CESR/01-013).
CESR reviewed its original proposals along the following lines:
CESR has given full consideration to all the issues and as a result amendments have been made (an explanation of major changes and reasons for change is given in annex 1 1);
the document which provides the categorizations of investors1 has been amended to upgrade the large companies and other institutional investors (with the exception of public sector bodies) to the category of professional investors;
the scope of application of the professional regime has been clarified by specifying the conduct of business requirements to be respected in cases of “counterparty relationships”;
the structure and content of the document have been simplified.
An overall presentation of the new proposed “system” for the EU conduct of business regime is given in annex 2. The different regimes apply to the investment firm-client relationship for investor protection, depending on whether the customer is classed as retail or professional as determined by the categorization criteria specified in document ref. CESR/01-014.
Furthermore, CESR proposes to identify a regime to apply to “counterparty relationships”, which is characterized by the absence of a client relationship (i.e. without any provision of a service), typically between market participants active in the market for their own account.
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© CESR - Committee of European Securities Regulators
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