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According to FBE, CESR seems to allow for the possibility of Members States imposing additional requirements, which will contradicts the Level 1 of the Directive and the key purpose of establishing a single passport for investment firms. CESR should seek to follow the principle of harmonisation while providing the necessary framework for flexibility and efficiency.
The consultation envisages far too many heavy disclosure requirements which are unnecessary, burdensome and not obviously of any benefit to customers. They do not meet the points raised by the Post-FSAP Securities Expert Group, which underlined that regulation should be justified and shown to be needed and beneficial before it is imposed.
Finally, FBE claims that a reversal of the burden of proof for firms would be either unconstitutional or against the established legal traditions in most jurisdictions within the EU. It should be up to the competent authority to demonstrate that the investment firm has breached a conduct of business rule, and not up to the firm to prove the contrary.