1. Accession Country Perspective on EU Legislative and Regulatory Requirements Márta Klemencsics Director General Ministry of Finance Hungary

2. Creating regulatory framework in Hungary “Permanent adaptation” of EU rules in early ‘90s in an environment of –stable legal framework on EU level –quick transformation of our markets Legislation was driven by the development of Hungarian markets

3. Major steps in banking legislation 1991 the first Banking Act 1993 Act on National Deposit Insurance Fund 1996 Act on Credit Institutions 2000 latest amendment  full harmonisation

4. Major steps in capital markets and investment services legislation 1990 Securities Act 1991 Act on Investment Funds 1994 Act on Commodities Exchange - included also regulation of Central Clearing House and Depositary 1996 Securities Act 2001 Capital Market’s Act  almost full harmonisation One exception: settlement finality

5. Adoption of acquis still not complete New directives: Electronic money institutions Winding up of credit institutions Harmonisation by the time of accession

6. New EU approach 1999 Financial Services Action Plan (FSAP) aimed at creating a single market for financial services by removing the remaining obstacles deadline: 2005

7. FSAP 3 priorities Single EU wholesale market Open and secure retail markets State of the art prudential rules and supervision General objectives in - taxation and - corporate governance 43 actions

8. Lámfalussy report adopted 2001 February Setting priorities Transparency and consultation in legislative process flexibility

9. Flexibility of legislation 4 level system Level 1 framework directives Level 2 detailed implementation rules Level 3 consistent implementation Level 4 enforcement European Securities Committee (ESC) Committee of European Securities Regulators (CESR)

10. Result of the implementation of Lámfalussy procedures: New directives: –2 UCITS 2001/107 2001/108 –Financial collaterals 2002/47 Approved proposals : – market abuse – prospectus

11. Financial conglomerates Distance marketing of financial services Further work is going on ISD capital adequacy rules takeover rules IAS consumer credit

12. Proposed : Extention of Lámfalussy procedures to banking and insurance  Acquis changes in almost all elements  further harmonisation is driven by the permanently changing legal environment

13. Problems Few information on the work in the pipeline No experience available from Member States Requirement to adopt the effective rules even if we know it’s going to change »Extra work »Permanent changes disturb markets

14. Preparing for membership New approach Instead of following EU legislation by adopting the acquis, actively participate in preparatory work –Working groups of Commission –Expert groups –Working parties –BAC, ESC, IC

15. The need to set up appropriate structures Role of associations Extensive consultations between authorities and industries