European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

The establishment of a single market of financial services involves regulating the activity of investment firms, in particular their operating conditions, determining the requirements relating to the issuing of securities and lay down the conditions for the running of investment funds.
Although the drafters of Directive No 93/22 of 10 May 1993 on investment services in the securities field (ISD)   …

Context

The establishment of a single market of financial services involves regulating the activity of investment firms, in particular their operating conditions, determining the requirements relating to the issuing of securities and lay down the conditions for the running of investment funds.

Although the drafters of Directive No 93/22 of 10 May 1993 on investment services in the securities field (ISD)  originally conceived it as an essential instrument for the achievement of the internal market, they limited themselves - as did the first banking Directive - to achieving essential harmonization necessary and sufficient to secure the mutual recognition of authorization and of prudential supervision systems. The European legislature's goal at the time was merely to create an environment in which investment firms authorized in their home Member State could provide specific services or set up branches in other Member States. 

The development of transactions outside the regulated markets, the increased recourse by undertakings to the financial markets instead of to bank loans to meet their funding needs, the complexity of services and instruments offered on the financial markets and the multiplication of controls rendering them totally ineffective  have brought to light the shortcomings of the directive, particularly in terms of transparency and security for investors. In a desire to improve the functioning of markets, the European authorities, on 11 May 1999, adopted an action plan for Financial services (FSAP)  which focuses on two major areas. The first objective of the Plan is the integration of the financial market, ensuring freedom of establishment and freedom to provide services and effective competition by removing barriers to the raising of capital within the EU and the harmonization of the rules on the functioning of financial instrument and investment services markets. The FSAP's second aim - the protection of investors - could, according to the drafters, be ensured by a series of measures implemented to maintain confidence in the market such as the strengthening and harmonization of the rules on prudential supervision and information as well as the adoption of rules fostering market transparency.

To implement the Plan, Directive No 2004/39 of 21 April 2004, known as the MiFID or ISD II , which repealed and replaced Directive No 93/22, established the regulatory framework governing the execution of transactions of investors in the stock markets and other trading systems as well as the financial activity of credit institutions and investment undertakings. Maximum harmonization Directive No 2004/39 strictly framed the legislation of the Member States by strengthening the integration of the financial market thereby putting the final touches to the recognition of freedom if establishment and services in financial matters. Amended a number of times, the directive has been repealed and replaced by Directive No 2014/65 of 15 May 2014, recasting the earlier directive .

Control by the authorites of the host Member States was carried out on top of the control of the authorites of the home Member State but such collaboration between the authorities was not a requirement.

Communication from the Commission - Implementing the framework for financial markets: action plan, COM(1999) 232 final, not published in the OJEU, but a summary is available at this address: http://europa.eu/legislation_summaries/internal_market/single_market_services/financial_services_general_framework/l24210_fr.htm.

Directive No 2004/39 of 21 April 2004 on markets in financial instruments, OJEU L 145 of 30 April 2004, 1.

Directive No 2014/65 on markets in financial instruments (recast), OJ L 173 of 12 June 2014, 349.

European Business Law

121. Context

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

121. Context

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise