European Commission, Technical Assistance Information Exchange Unit (TAIEX), DG Enlargement in co-operation with The Bulgarian Chamber of Commerce and Industry (co-organiser) Seminar on Financial Services Seminar on Financial Services Sofia, 16 September 2005 Future developments for financial services. The Green Paper on Financial Services Policy Argyro Leoutsea Argyro Leoutsea Advocate, Greece

Objective of the financial services policy for the future as set in the Green Paper: 1. Achieving a fully integrated, open, competitive and economically efficient European financial market 2. Eliminating any remaining economically significant barriers 3. Promoting the creation of an EU market where financial services and capital circulate freely at the lowest possible cost with adequate and effective levels of prudential control, financial stability and a high level of consumer protection. 4. Implementing, enforcing and continuously evaluating the existing legislative framework, setting up accurately the better regulation agenda for any future initiatives, improving supervisory convergence and strengthening European influence in global financial markets.

Practices to be adopted for the achievement of the Commission’s objective: Consolidation of existing legislation, with few new initiatives; Consolidation of existing legislation, with few new initiatives; Ensuring the effective transposition of European rules into national regulation and more rigorous enforcement by supervisory authorities; Ensuring the effective transposition of European rules into national regulation and more rigorous enforcement by supervisory authorities; Continuous ex-post evaluation whereby the Commission will monitor carefully the application of these rules in practice –and their impact on the European financial sector.

“Better Regulation” approach: policy conception, open and transparent consultation at all levels, establishment of thorough and convincing economic impact assessments before launching a new proposal and ex-post evaluation of regulatory measures purpose: - reduction of administrative costs for financial institutions and - increase of competitiveness of the European financial industry

Priorities for the achievement of consistent application and enforcement of existing rules – Continued application of open and transparent policy making with extensive use of consultation mechanisms at all levels; – Simplifying and consolidating all relevant (European and national) financial services rules; – Converging standards and practices at supervisory level, while respecting political accountability and current institutional boundaries; – Working with Member States to improve transposition and to ensure consistent implementation;

Priorities for the achievement of consistent application and enforcement of existing rules (cont.) – Evaluating whether the existing directives and regulations are delivering the expected economic benefits and repealing measures that do not pass this test; and – Ensuring proper implementation and enforcement, if needed, by infringement procedures building on existing legislation and case law.

A three step approach for efficient and effective supervision 1. Agreeing on overall policy objectives 2. Maximising the current framework, identifying gaps and developing existing tools by – –removing inconsistencies found in and between Directives especially on cross-sectoral issues – –providing greater clarity in the roles and responsibilities of supervisors and – –converging practices of the three EU supervisory committees (CESR, CEBS and CEIOPS) 3. Developing new structures if necessary

Issues to be further considered Codification and possibly simplification of existing rules on information requirements, in particular with a view to ensuring consistency and coherence between different texts; Financial mediation, in particular by allowing cross-border service provision by knowledgeable and reliable intermediaries, while applying full transparency on fees and relationships with providers. Work has already been done in this area under the Insurance Mediation Directive and the Markets in Financial Instruments Directive. However, given developments in products and the structure of financial providers, the need for further alignment of rules on conduct of business, sales advice and disclosure should be examined; Bank accounts, in particular looking into obstacles to opening accounts cross-border, as well as issues regarding their handling, portability, transferability and closure. There appear to be particular problems associated with, e.g. non-residency and identification requirements.

“Exchange of Views” on Financial Services Policy Report Is the European Commission addressing the right priorities? Are there areas where regulatory or supervisory steps need to be filled or- on the contrary –where regulation is obsolete and can possibly be withdrawn? And Are initiatives suggested in the “Asset Management” and “Retail Financial Services” areas the right way forward?

“…so lets work together to build this financial strength and the most vibrant capital markets in the world. There is no time to waste. But at least now, we are on the right path”. Charlie McCreevy, European Commissioner for Internal Market and Charlie McCreevy, European Commissioner for Internal Market and Services, commenting on the Green Paper, Brussels, Services, commenting on the Green Paper, Brussels,