02 December 2002

EMAC discussions on ISD

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Discussing the Commission proposal on the forthcoming Investment Services Directive, Mrs Villiers heavily criticized the last minute changes undertaken by the Commission. Although there is consensus on the introduction of a “single passport” the new text on the pre-trade transparency obligations is not acceptable. During the consultation process the Commission confirmed that pre-trade transparency will not be part of the Directive, Mrs Villiers stated and wonders why this has been included now. She heavily criticized this endorsement as a threat to the interinstitutional trust.

The split between level I and level II legislation was another point of criticism. Too many issues will be decided through technical implementation meassures and therefore be decided by CESR. In this respect the ISD proposal is poorly drafted. Other points of concern were among others the definition of an eligible counterparty which is seen as too restrictive. Furthermore, it should be respected that small enterprises need appropriate regulation but not over regulation.

Mrs Beres said that in her view the interests of the consumer are more respected in the Commission paper than in the views that Mrs Villiers had expressed. Mr Purvis mentioned that the risk has to be avoided that pre-trade disclosure leads to higher prices.

Responding to the debate the Commission representative made clear that the Commission when drafting proposals does not have to adopt the opinion of investment companies. Furthermore, the Commission has to accept the different positions of all member countries, not only those of the UK.

With regard to pre-trade transparency he said he regards the position of some companies as paradox. The same companies are also working on the US markets which have established far more rigid transparency rules.

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