1. 1 THE EU SECURITIES ACQUIS José Manuel PORTERO CNMV portero@cnmv.es Sofia, 16 September 2005

2. 2 THAT WAS THEN... Early 90s –Liberalisation of transactions in securities 1993 –Two very important Directives enacted on –Investment Services –Capital Adequacy which make possible the right to establish and freedom to provide services However significant obstacles and barriers still in place...

3. 3 THAT WAS THEN...PART II 1999- The European Commission set-up the Financial Services Action Plan –FSAP- 42 measures to be adopted Main goal -to speed-up the creation of a single European market in the financial services field- Main tools –Generalization of home country approach –Harmonisation of standards –Mutual recognition –Coordination between national supervisory bodies

4. 4... THIS IS NOW 2005 39 out of 42 original measures of the FSAP have been adopted Only one major measure relating to securities is still under negotiation –the review of the capital requirements of Investment Firms- And future work –maybe regulation- on clearing and settlement is expected by next year And, last but not least...

5. 5...THIS IS NOW...WORKING The Four-Level regulatory approach under the Lamfalussy process –Level 1 –Adoption of framework principles- –Level 2 –Implementing measures- –Level 3 –Common guidelines issued by regulators- –Level 4 –Enforcement of MS compliance with EU rules European Securities Committee –ESC- Committee of European Securities Regulators –CESR-.......................................................fully operational!!!

6. 6 BUT THIS IS ONLY THE END OF THE BEGINNING From 2005 onwards What next? –Better regulation –Transposition –Enforcement –Continuous evaluation Way forward? –Green Paper on Financial Services Policy explains it all!!!

7. 7 RELEVANT EU LEGISLATION IN THE SECURITIES FIELD Author’s Choice

8. 8 MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVE –2004/39/EC- To set-up harmonized requirements for authorisation of Investment Firms, Regulated Markets and MTFs To enhance pre and post trade transparency on securities transactions To make mandatory co-operation between jurisdictiosn

9. 9 MARKET ABUSE DIRECTIVE -2003/6/EC- COMMISSION IMPLEMENTING RULES To mitigate, to detect and to define market manipulation and insider dealing Definition and public disclosure of inside information Investment recommendations and disclosure of conflicts of interest

10. 10 PROSPECTUS DIRECTIVE –2003/71/EC- COMMISSION REGULATION European Passport for Prospectuses Harmonized requirements for Prospectuses Information contained in Prospectuses and dissemination of advertisements

11. 11 TRANSPARENCY DIRECTIVE -2004/109/EC- To establish a common financial disclosure regime within the EU for issuers of listed securities To improve the European dissemination on information on issuers

12. 12 UCITS DIRECTIVES 2001/107/EC—2001/107/EC To establish the conditions of access and authorisation Relations with third countries Obligations of the Depositories Policy of investment on financial instruments

13. 13 ENDORSEMENT OF IAS/IFRS COMMISSION REGUL. -1606/2002/EC To endorse the International Accounting Standards/International Financial Reporting Standards to be applied since January 2005 to consolidated groups of listed companies

14. 14 CAPITAL REQUIREMENT DIRECTIVE To adapt the new Basel Accord –Basel II- to European legislation by the re-casting of the two existing Directives on –Capital Adequacy –1993/6/EC- –Banking –2000/12/EC-

15. 15 DON QUIXOTE SAID 400 YEARS AGO “...TO BE PREPARED IS HALF THE VICTORY” Definitely Still Valid After All These Years!!!