EP draft recommendation for ISD second reading

08 January 2004

Theresa Villiers, rapporteur of the EMAC Committee on the Investment Services Directive, published her draft recommendation for second reading in the European Parliament. As she notes in her explanatory statement the Council text is difficult to understand and ambiguous and contains a wide-ranging comitology clause. The key decisions would be left to CESR and the Commission. This is not acceptable and would prevent proper parliamentary scrutiny.

With regard to article 27 (former 25), Mrs Villiers notes among others that is difficult to determine what quote size is imposed by the Council, particularly with the confusion between 'quote' and 'transaction.' The Council text also placed very significant obstacles to internalisation, and would also disrupt many areas of wholesale and OTC trading.

Mrs Villiers also notes that the Council’s definition of systematic internaliser is very broad and could impose a market-making obligation on a wide range of large/small banks and investment firms which are not in competition with exchanges.

Full paper

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