27 May 2008

McCreevy underlines need for international solution for fund industry reforms

The forthcoming Commission proposals for the reform of UCITS will not contain management company passport provisions, Commissioner McCreevy said and called on securities market regulators develop robust and effective solutions.

The forthcoming Commission proposals for the reform of UCITS will not contain management company passport provisions, Commissioner McCreevy said speaking in Dublin on Friday. “No such provisions will be advanced unless and until Member State securities market regulators (…) develop robust and effective solutions to the supervisory challenges that have been identified in respect of the passport proposal”, he said.

 

McCreevy called for an intensive collaborative effort between supervisors and governments and a coordinated approach at EU level “to ensure that what we do dovetails with regulators in the other major capital markets of the world, especially the United States.”

 

Strengthening financial supervisory cooperation between the Member States of Europe is key, he said.

 

Reminding to a threat to financial stability stemming from a potential fall-out from a cross-border operating European financial institute McCreevy called for robust system in place. The recent turmoil alerted us to the importance of cross border cooperation in the regulation, oversight, and supervision of financial institutions, he said.

 

“Who would have decided on the need (or otherwise) for supervisory intervention?”, he asked. “Who would have telephoned whom? Which supervisor would have had access to which information on which to make sound decisions? Who would have led the intervention? Which authority would have guaranteed which deposits, to whom and to what extent?”

 

To clarify these questions the Commission started a full review of the supervisory framework under which Europe's 40 cross border institutions currently operate.

 

“Anyone who thinks that this could be done by Member States acting alone is not living in the real world”, McCreevy said.

 

Full speech

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