New rules will open up competition in financial services and make it easier for investment companies to operate across the EU.
The European commission has unveiled the second step in implementing the ‘markets in financial instruments directive’ (MIFID).
The proposals will give investment companies the right to offer services across the EU's 25 member states, based on the regulations of their home supervising authority alone.
Banks will also be allowed to directly compete with stock exchanges with EU “passports” allowing multilateral share trading facilities.
EU internal market commissioner Charlie McCreevy stressed that the shake-up would also build in protections for consumers of financial services.
“They will provide a high level of protection for investors while keeping red tape to a minimum. They will also increase cross-border competition to the benefit of investors and issuers alike,” he said in a statement.
McCreevy’s proposals will now go to the European parliament and the European Securities Committee for three months of consultation.
The commission has moved to address industry concerns that the costs of the shake-up might outweigh the benefits.
Key to getting industry and national governments on board has been to enact MIFID as a directive rather than by Brussels regulation.
Directives give member states two years or more to implement EU rules under made-to-measure domestic legislation.
National capitals will now be able to draft their version of onerous reporting requirements and record-keeping rules.
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