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French bankers are in favour of revising the investment services directive

In July 2001, the European Commission submitted a proposal to revise the 1993 "investment services directive" (ISD).

The development of financial activities and the modernisation of technologies as well as the necessary pursuit of an unified capital market in Europe make it necessary to reassess the rules in effect in the European Union.

The adoption of the new directive, as part of a European action plan for financial services, is planned for the end of the first half of 2003.

The French bankers have sent their comments to the Commission in a joint document approved by the whole financial community.

They are in favour of a swift revision of the directive in the way of the Lamfalussy group's recommendations.

With the view to avoiding any distorsion of competition and liquidity fragmentation, they fully approve the market classification put forward by the Commission, setting three categories of institutions : regulated market, organised market, investment firms. Subject to some improvements, this framework allows to follow the main goals underlying the implementation of the European financial market : investors protection, markets efficiency and their innovation capability, fair competition between the different actors (markets and intermediaries).

French bankers are also pleased that a professional investor category has been defined, that would include large industrial and commercial firms and would, most of all, allow adapting costs to offered services according to the investor's degree of competence, enhance market integration. However, they hope the Commission will abolish the possibility of switching from one category to another.

French bankers hope that the European legal framework for asset management will be standardized by a specific directive or, at least, that this activity will be further individualised in the ISD. This evolution would especially help solving the present inconsistencies between the ISD and the newly revisedUCITS's directive and include all the management in the Lamfalussy procedure.

French bankers ask for the swift implementation of an European passport for clearing houses, their members and financial intermediaries. Issuing these passports would hasten the implementation of a Single Market for post-market activities.

On the other hand, the Commission should thoroughly reconsider it's orders reporting outline. In this area, the banking sector has made practical proposals based on client's prior information and "best execution" presumption for any order made on a regulated market.


Colette Cova
email : ccova@fbf.fr
Tel : 01 48 00 50 07

Kenza Benqeddi
email : kbenqeddi@fbf.fr
Tel : 01 48 00 50 08

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