1993L0022 — EN — 07.08.1995 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL DIRECTIVE 93/22/EEC
of 10 May 1993
on investment services in the securities field
(OJ L 141, 11.6.1993, p. 27)
Amended by:
Official Journal
No page date
►M1European Parliament and Council Directive 95/26/EC of 29 June 1995 L168 7 18.7.1995
Corrected by:
►C1Corrigendum, OJ L 170, 13.7.1993, p. 32 (93/22)
►C2Corrigendum, OJ L 194, 3.8.1993, p. 27 (93/22)
1993L0022 — EN — 07.08.1995 — 001.001 — 2
▼B
COUNCIL DIRECTIVE 93/22/EEC
of 10 May 1993
on investment services in the securities field
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 57 (2) thereof,
Having regard to the proposal from the Commission(1),
In cooperation with the European Parliament(2),
HavingregardtotheopinionoftheEconomicandSocialCommittee(3),
Whereas this Directive constitutes an instrument essential to the
achievement of the internal market, a course determined by the SingleEuropeanActandsetoutintimetableformintheCommission’sWhitePaper,fromthepointofviewbothoftherightofestablishmentandofthe freedom to provide financial services, in the field of investmentfirms;
Whereas firms that provide the investment services covered by this
DirectivemustbesubjecttoauthorizationbytheirhomeMemberStatesin order to protect investors and the stability of the financial system;
Whereas the approach adopted is to effect only the essential harmon-
ization necessary and sufficient to secure the mutual recognition ofauthorization and of prudential supervision systems, making possiblethegrantofasingleauthorizationvalidthroughouttheCommunityandthe application of the principle of home Member State supervision;whereas,byvirtueofmutualrecognition,investmentfirmsauthorizedintheir home Member States may carry on any or all of the servicescovered by this Directive for which they have received authorizationthroughout the Community by establishing branches or under thefreedom to provide services;
Whereas the principles of mutual recognition and of home Member
StatesupervisionrequirethattheMemberStates’competentauthoritiesshouldnotgrantorshouldwithdrawauthorizationwherefactorssuchasthe content of programmes of operations, the geographical distributionor the activities actually carried on indicate clearly that an investmentfirmhasoptedforthelegalsystemofoneMemberStateforthepurposeof evading the stricter standards in force in another Member Statewithintheterritoryofwhichitintendstocarryonordoescarryonthegreaterpartofitsactivities;whereas,forthepurposesofthisDirective,an investment firm which is a legal person must be authorized in theMember State in which it has its registered office; whereas an invest-mentfirmwhichisnotalegalpersonmustbeauthorizedintheMemberState in which it has its head office; whereas, in addition, MemberStates must require that an investment firm’s head office must alwaysbesituatedinitshomeMemberStateandthatitactuallyoperatesthere;
Whereasitisnecessary,fortheprotectionofinvestors,toguaranteethe
internalsupervisionofeveryfirm,eitherbymeansoftwo-manmanage-ment or, where that is not required by this Directive, by other mecha-nisms that ensure an equivalent result;
Whereasinordertoguaranteefaircompetition,itmustbeensuredthat
investment firms that are not credit institutions have the same freedomto create branches and provide services across frontiers as is providedfor by the Second Council Directive (89/646/EEC) of 15 December1989onthecoordinationoflaws,regulationsandadministrativeprovi-
(1) OJ No C43, 22. 2. 1989, p. 7; and OJ No C42, 22. 2. 1990, p. 7.
(2) OJ No C304, 4. 12. 1989, p. 39; and OJ No C115, 26. 4. 1993.
(3) OJ No C298, 27. 11. 1989, p. 6.
1993L0022 — EN — 07.08.1995 — 001.001 — 3
▼B
sions relating to the taking up and pursuit of the business of credit
institutions(1);
WhereasaninvestmentfirmshouldnotbeabletoinvokethisDirective
inordertocarryoutspotorforwardexchangetransactionsotherthanasservices connected with the provision or investment services; whereas,therefore,theuseofabranchsolelyforsuchforeign-exchangetransac-tions would constitute misuse of the machinery of this Directive;
WhereasaninvestmentfirmauthorizedinitshomeMemberStatemay
carry on business throughout the Community by whatever means itdeemsappropriate;whereas,tothatenditmay,ifitdeemsitnecessary,retain tied agents to receive and transmit orders for its account andunderitsfullandunconditionalresponsibility;whereas,inthesecircum-stances, such agents’ business must be regarded as that of the firm;whereas, moreover, this Directive does not prevent a home MemberState from making the status of such agents subject to special require-ments; whereas should the investment firm carry on cross-border busi-ness, the host Member State must treat those agents as being the firmitself;whereas,moreover,thedoor-to-doorsellingoftransferablesecur-itiesshouldnotbecoveredbythisDirectiveandtheregulationthereofshould remain a matter for national provisions;
Whereas‘transferablesecurities'meansthoseclassesofsecuritieswhich
arenormallydealtinonthecapitalmarket,suchasgovernmentsecuri-ties, shares in companies, negotiable securities giving the right toacquire shares by subscription or exchange, depositary receipts, bondsissuedaspartofaseries,indexwarrantsandsecuritiesgivingtherightto acquire such bonds by subscription;
Whereas ‘money-market instruments' means those classes of instru-
ments which are normally dealt in on the money market such astreasury bills, certificates of deposit and commercial paper;
Whereastheverywidedefinitionsoftransferablesecuritiesandmoney-
market instruments included in this Directive are valid only for thisDirective and consequently in no way affect the various definitions offinancialinstrumentsusedinnationallegislationforotherpurposessuchas taxation; whereas, furthermore, the definition of transferable securi-ties covers negotiable instruments only; whereas, consequently, sharesand other securities equivalent to shares issued by bodies such asbuilding societies and industrial and provident societies, ownership ofwhich cannot in practice be transferred except by the issuing body’sbuying them back, are not covered by this definition;
Whereas‘instrumentequivalenttoafinancial-futurescontract'meansa
contractwhichissettledbyapaymentincashcalculatedbyreferencetofluctuations in interest or exchange rates, the value of any instrumentlisted in Section B of the Annex or an index of any such instruments;
Whereas, for the purposes of this Directive, the business of the recep-
tion and transmission of orders also includes bringing together two ormore investors thereby bringing about a transaction between thoseinvestors;
Whereas no provision in this Directive affects the Community provi-
sionsor,failingsuch,thenationalprovisionsregulatingpublicoffersofthe instruments covered by this Directive; whereas the same applies tothe marketing and distribution of such instruments;
WhereasMemberStatesretainfullresponsibilityforimplementingtheir
own monetary-policy measures, without prejudice to the measuresnecessary to strengthen the European Monetary System;
Whereasitisnecessarytoexcludeinsuranceundertakingstheactivities
of which are subject to appropriate monitoring by the competentprudential-supervision authorities and which are coordinated at
(1) OJ No L386, 30. 12. 1989, p. 1. Directive as last amended by Directive
92/30/EEC (OJ No L110, 28. 4. 1992, p. 52).
1993L0022 — EN — 07.08.1995 — 001.001 — 4
▼B
Community level and undertakings carrying out reinsurance and retro-cession activities;
Whereas undertakings which do not provide services for third parties
but the business of which consists in providing investment servicessolely for their parent undertakings, for their subsidiaries, or for othersubsidiaries of their parent undertakings should not be covered by thisDirective;
Whereas the purpose of this Directive is to cover undertakings the
normal business of which is to provide third parties with investmentservicesonaprofessionalbasis;whereasitsscopeshouldnotthereforecover any person with a different professional activity (e.g. a barristeror solicitor) who provides investment services only on an incidentalbasisinthecourseofthatotherprofessionalactivity,providedthatthatactivityisregulatedandtherelevantrulesdonotprohibittheprovision,onanincidentalbasis,ofinvestmentservices;whereasitisalsoneces-sary for the same reason to exclude from the scope of this Directivepersonswhoprovideinvestmentservicesonlyforproducersorusersofcommodities to the extent necessary for transactions in such productswhere such transactions constitute their main business;
Whereasfirmswhichprovideinvestmentservicesconsistingexclusively
in the administration of employee-participation schemes and whichthereforedonotprovideinvestmentservicesforthirdpartiesshouldnotbe covered by this Directive;
Whereas it is necessary to exclude from the scope of this Directive
central banks and other bodies performing similar functions as well aspublic bodies charged with or intervening in the management of thepublic debt, which concept covers the investment thereof; whereas, inparticular,thisexclusiondoesnotcoverbodiesthatarepartlyorwhollyState-ownedtheroleofwhichiscommercialorlinkedtotheacquisitionof holdings;
WhereasitisnecessarytoexcludefromthescopeofthisDirectiveany
firmsorpersonswhosebusinessconsistsonlyofreceivingandtransmit-ting orders to certain counterparties and who do not hold funds orsecurities belonging to their clients; whereas, therefore, they will notenjoytherightofestablishmentandfreedomtoprovideservicesunderthe conditions laid down in this Directive, being subject, when theywish to operate in another Member State, to the relevant provisionsadopted by that State;
Whereas it is necessary to exclude from the scope of this Directive
collective investment undertakings whether or not coordinated atCommunity level, and the depositaries or managers of such undertak-ings, since they are subject to specific rules directly adapted to theiractivities;
Whereas,whereassociationscreatedbyaMemberState’spensionfunds
to permit the management of their assets confine themselves to suchmanagement and do not provide investment services for third parties,andwherethepensionfundsarethemselvessubjecttothecontroloftheauthoritieschargedwithmonitoringinsuranceundertakings,itdoesnotappeartobenecessarytosubjectsuchassociationstotheconditionsfortaking up business and for operation imposed by this Directive;
WhereasthisDirectiveshouldnotapplyto‘agentidicambio'asdefined
byItalianlawsincetheybelongtoacategorytheauthorizationofwhichisnottoberenewed,theiractivitiesareconfinedtothenationalterritoryand they do not give rise to a risk of the distortion of competition;
Whereas the rights conferred on investment firms by this Directive are
withoutprejudicetotherightofMemberStates,centralbanksandothernationalbodiesperformingsimilarfunctionstochoosetheircounterpar-ties on the basis of objective, non-discriminatory criteria;
Whereas responsibility for supervising the financial soundness of an
investment firm will rest with the competent authorities of its homeMember State pursuant to Council Directive 93/6/EEC of 15 March
1993L0022 — EN — 07.08.1995 — 001.001 — 5
▼B
1993 on the capital adequacy of investment firms and credit institu-
tions(1), which coordinates the rules applicable to market risk;
Whereas a home Member State may, as a general rule, establish rules
stricter than those laid down in this Directive, in particular as regardsauthorization conditions, prudential requirements and the rules ofreporting and transparency;
Whereas the carrying on of activities not covered by this Directive is
governedbythegeneralprovisionsoftheTreatyontherightofestab-lishment and the freedom to provide services;
Whereasinordertoprotectinvestorsaninvestor’sownershipandother
similar rights in respect of securities and his rights in respect of fundsentrusted to a firm should in particular be protected by being keptdistinct from those of the firm; whereas this principle does not,however,preventafirmfromdoingbusinessinitsnamebutonbehalfoftheinvestor,wherethatisrequiredbytheverynatureofthetransac-tion and the investor is in agreement, for example stock lending;
Whereastheproceduresfortheauthorizationofbranchesofinvestment
firmsauthorizedinthirdcountrieswillcontinuetoapplytosuchfirms;whereas those branches will not enjoy the freedom to provide servicesunder the second paragraph of Article 59 of the Treaty or the right ofestablishment in Member States other than those in which they areestablished; whereas, however, requests for the authorization of subsi-diaries or of the acquisition of holdings by undertakings governed bythelawsofthirdcountriesaresubjecttoaprocedureintendedtoensurethat Community investment firms receive reciprocal treatment in thethird countries in question;
Whereas the authorizations granted to investment firms by the
competent national authorities pursuant to this Directive will haveCommunity-wide, and no longer merely nationwide application, andexisting reciprocity clauses will henceforth have no effect; whereas aflexible procedure is therefore needed to make it possible to assessreciprocityonaCommunitybasis;whereastheaimofthisprocedureisnot to close the Community’s financial markets but rather, as theCommunityintendstokeepitsfinancialmarketsopentotherestoftheworld, to improve the liberalization of the global financial markets inthirdcountries;whereas,tothatend,thisDirectiveprovidesforproced-ures for negotiating with third countries and, as a last resort, for thepossibilityoftakingmeasuresinvolvingthesuspensionofnewapplica-tions for authorization and the restriction of new authorizations;
Whereas one of the objectives of this Directive is to protect investors;
whereas it is therefore appropriate to take account of the differentrequirements for protection of various categories of investors and oftheir levels of professional expertise;
Whereas the Member States must ensure that there are no obstacles to
preventactivitiesthatreceivemutualrecognitionfrombeingcarriedonin the same manner as in the home Member State, as long as they donot conflict with laws and regulations protecting the general good inforce in the host Member State;
WhereasaMemberStatemaynotlimittherightofinvestorshabitually
residentorestablishedinthatMemberStatetoavailthemselvesofanyinvestment service provided by an investment firm covered by thisDirective situated outside that Member State and acting outwith thatMember State;
Whereas in certain Member States clearing and settlement functions
may be performed by bodies separate from the markets on whichtransactions are effected; whereas, accordingly, any reference in thisDirective to access to and membership of regulated markets should beread as including references to access to and membership of bodiesperforming clearing and settlement functions for regulated markets;
(1) See page 1 of this Official Journal.
1993L0022 — EN — 07.08.1995 — 001.001 — 6
▼B
WhereaseachMemberStatemustensurethatwithinitsterritory,treat-
ment of all investment firms authorized in any Member State andlikewiseallfinancialinstrumentslistedontheMemberStates’regulatedmarkets is non-discriminatory; whereas investment firms must all havethesameopportunitiesofjoiningorhavingaccesstoregulatedmarkets;whereas, regardless of the manner in which transactions are at presentorganizedintheMemberStates,itisthereforeimportant,subjecttotheconditionsimposedbythisDirective,toabolishthetechnicalandlegalrestrictionsonaccesstotheregulatedmarketswithintheframeworkofthis Directive;
Whereas some Member States authorize credit institutions to become
members of their regulated markets only indirectly, by setting upspecialized subsidiaries; whereas the opportunity which this Directivegives credit institutions of becoming members of regulated marketsdirectly without having to set up specialized subsidiaries constitutes asignificant reform for those Member States and all its consequencesshould be reassessed in the light of the development of the financialmarkets; whereas, in view of those factors, the report which theCommissionwillsubmit to the Council on this matterno laterthan 31December1998willhavetotakeaccountofallthefactorsnecessaryforthe Council to be able to reassess the consequences for those MemberStates,andinparticularthedangerofconflictsofinterestandthelevelof protection afforded to investors;
Whereas it is of the greatest importance that the harmonization of
compensation systems be brought into effect on the same date as thisDirective; whereas, moreover, until the date on which a Directiveharmonizingcompensationsystemsisbroughtintoeffect,hostMemberStateswillbeabletoimposeapplicationoftheircompensationsystemson investment firms including credit institutions authorized by otherMemberStates,wherethehomeMemberStateshavenocompensationsystemsorwheretheirsystemsdonotofferequivalentlevelsofprotec-tion;
Whereas the structure of regulated markets must continue to be
governed by national law, without thereby forming an obstacle to theliberalizationofaccesstotheregulatedmarketsofhostMemberStatesfor investment firms authorized to provide the services concerned intheirhomeMemberStates;whereas,pursuanttothatprinciple,thelawof the Federal Republic of Germany and the law of the Netherlandsgoverntheactivities Kursmaklerandhoekmannenrespectivelysoasto
ensure that they do not exercise their functions in parallel with otherfunctions;whereasitshouldbenotedthat Kursmaklerandhoekmannen
may not provide services in other Member States; whereas no one,whateverhishomeMemberState,mayclaimtoactasa Kursmakleror
ahoekmanwithoutbeingsubjecttothesamerulesonincompatibilityas
result from the status of Kursmaklerorhoekman;
Whereas it should be noted that this Directive cannot affect the meas-
urestakenpursuanttoCouncilDirective79/279/EECof5March1979coordinating the conditions for the admission of securities to officialstock-exchange listing(
1);
Whereas the stability and sound operation of the financial system and
theprotectionofinvestorspresupposethatahostMemberStatehastheright and responsibility both to prevent and to penalize any actionwithinitsterritorybyinvestmentfirmscontrarytotherulesofconductandotherlegalorregulatoryprovisionsithasadoptedintheinterestofthegeneralgoodandtotakeactioninemergencies;whereas,moreover,thecompetentauthoritiesofthehostMemberStatemust,indischargingtheir responsibilities, be able to count on the closest cooperation withthe competent authorities of the home Member State, particularly asregards business carried on under the freedom to provide services;whereas the competent authorities of the home Member State are enti-tled to be informed by the competent authorities of the host MemberState of any measures involving penalties on an investment firm or
(1) OJ No L66, 16. 3. 1979, p. 21. Directive last amended by the Act of
Accession of Spain and Portugal.
1993L0022 — EN — 07.08.1995 — 001.001 — 7
▼B
restrictions on its activities which the latter have taken vis-à-visthe
investment firms which the former have authorized so as to be able toperform their function of prudential supervision efficiently; whereas tothat end cooperation between the competent authorities of home andhost Member States must be ensured;
Whereas,withthetwo-foldaimofprotectinginvestorsandensuringthe
smooth operation of the markets in transferable securities, it is neces-sarytoensurethattransparencyoftransactionsisachievedandthattheruleslaiddownforthatpurposeinthisDirectiveforregulatedmarketsapply both to investment firms and to credit institutions when theyoperate on the market;
Whereas examination of the problems arising in the areas covered by
theCouncilDirectivesoninvestmentservicesandsecurities,asregardsboth the application of existing measures and the possibility of closercoordinationinthefuture,requirescooperationbetweennationalauthor-ities and the Commission within a committee; whereas the establish-mentofsuchacommitteedoesnotruleoutotherformsofcooperationbetween supervisory authorities in this field;
Whereas technical amendments to the detailed rules laid down in this
Directive may from time to time be necessary to take account of newdevelopments in the investment-services sector; whereas the Commis-sion will make such amendments as are necessary, after referring thematter to the committee to be set up in the securities-markets field,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
Definitions and scope
Article 1
For the purposes of this Directive:
1.investment service shall mean any of the services listed in Section
AoftheAnnexrelatingtoanyoftheinstrumentslistedinSectionB of the Annex that are provided for a third party;
2.investment firm shallmeananylegalpersontheregularoccupation
or business of which is the provision of investment services forthird parties on a professional basis.
For the purposes of this Directive, Member States may include as
investment firms undertakings which are not legal persons if:
— their legal status ensures a level of protection for third parties’
interests equivalent to that afforded by legal persons, and
— theyaresubjecttoequivalentprudentialsupervisionappropriate
to their legal form.
However, where such natural persons provide services involving
the holding of third parties’ funds or transferable securities, theymay be considered as investment firms for the purposes of thisDirective only if, without prejudice to the other requirementsimposed in this Directive and in Directive 93/6/EEC, they complywith the following conditions:
— the ownership rights of third parties in instruments and funds
belongingtothemmustbesafeguarded,especiallyintheeventoftheinsolvencyofafirmorofitsproprietors,seizure,set-offoranyotheractionbycreditorsofthefirmorofitsproprietors,
— aninvestmentfirmmustbesubjecttorulesdesignedtomonitor
the firm’s solvency and that of its proprietors,
— aninvestmentfirm’sannualaccountsmustbeauditedbyoneor
morepersonsempowered,undernationallaw,toauditaccounts,
— where a firm has only one proprietor, he must make provision
for the protection of investors in the event of the firm’s cessa-tionofbusinessfollowinghisdeath,hisincapacityoranyothersuch event.
1993L0022 — EN — 07.08.1995 — 001.001 — 8
▼B
No later than 31 December 1997the Commission shall report
ontheapplicationofthesecondandthirdsubparagraphsofthispoint and, if appropriate, propose their amendment or deletion.
Where a person provides one of the services referred to in
SectionA(1)(a)oftheAnnexandwherethatactivityiscarriedonsolelyfortheaccountofandunderthefullandunconditionalresponsibility of an investment firm, that activity shall beregardedastheactivitynotofthatpersonbutoftheinvestmentfirm itself;
3.credit institution shall mean a credit institution as defined in the
firstindentofArticle1ofDirective77/780/EEC(
1)withtheexcep-
tion of the institutions referred to in Article 2 (2) thereof;
4.transferable securities shall mean:
— sharesincompaniesandothersecuritiesequivalenttosharesin
companies,
— bonds and other forms of securitized debt
which are negotiable on the capital market and— anyothersecuritiesnormallydealtingivingtherighttoacquire
any such transferable securities by subscription or exchange orgiving rise to a cash settlement
excluding instruments of payment;
5.money-market instruments shall mean those classes of instruments
which are normally dealt in on the money market;
6.home Member State shall mean:
(a) where the investment firm is a natural person, the Member
State in which his head office is situated;
(b) wheretheinvestmentfirmisalegalperson,theMemberState
inwhichitsregisteredofficeissituatedor,ifunderitsnationallaw it has no registered office, the Member State in which itshead office is situated;
(c) in the case of a market, the Member State in which the regis-
tered office of the body which provides trading facilities issituatedor,ifunderitsnationallawithasnoregisteredoffice,theMemberStateinwhichthatbody’sheadofficeissituated;
7.host Member State shall mean the Member State in which an
investment firm has a branch or provides services;
8.branchshall mean a place of business which is a part of an
investmentfirm,whichhasnolegalpersonalityandwhichprovidesinvestment services for which the investment firm has been autor-ized;alltheplacesofbusinesssetupinthesameMemberStatebyaninvestmentfirmwithheadquartersinanotherMemberStateshallbe regarded as a single branch;
9.competent authorities shall mean the authorities which each
Member State designates under Article 22;
10.qualifying holding shall mean any direct or indirect holding in an
investmentfirmwhichrepresents10%ormoreofthecapitalorofthevotingrightsorwhichmakesitpossibletoexerciseasignificantinfluenceoverthemanagementoftheinvestmentfirminwhichthatholding subsists.
Forthepurposesofthisdefinition,inthecontextofArticles4and
9 and of the other levels of holding referred to in Article 9, thevoting rights referred to in Article 7 of Directive 88/627/EEC(
2)
shall be taken into account;
(1) OJ No L322, 17. 12. 1977, p. 30. Directive last amended by Directive
89/646/EEC (OJ No L386, 30. 12. 1989, p. 1).
(2) OJ No L348, 17. 12. 1988, p. 62.
1993L0022 — EN — 07.08.1995 — 001.001 — 9
▼B
11.parent undertaking shall mean a parent undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC(1);
12.subsidiaryshall mean a subsidiary undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of asubsidiaryundertakingshallalsoberegardedasasubsidiaryoftheparent undertaking which is the ultimate parent of those undertak-ings;
13.regulated market shall mean a market for the instruments listed in
Section B of the Annex which:
— appears on the list provided for in Article 16 drawn up by the
Member State which is the home Member State as defined inArticle 1 (6) (c),
— functions regularly,— is characterized by the fact that regulations issued or approved
bythecompetentauthoritiesdefinetheconditionsfortheopera-tionofthemarket,theconditionsforaccesstothemarketand,where Directive 79/279/EEC is applicable, the conditionsgoverning admission to listing imposed in that Directive and,where that Directive is not applicable, the conditions that mustbesatisfiedbyafinancialinstrumentbeforeitcaneffectivelybedealt in on the market,
— requires compliance with all the reporting and transparency
requirements laid down pursuant to Articles 20 and 21;
14.controlshall mean control as defined in Article 1 of Directive
83/349/EEC;
▼
M1
15.close linksshall mean a situation in which two or more natural or
legal persons are linked by:
(a)participation,whichshallmeantheownership,directorbyway
ofcontrol,of20%ormoreofthevotingrightsorcapitalofanundertaking or
(b)control, which shall mean the relationship between a parent
undertaking and a subsidiary, in all the cases referred to inArticle1(1)and(2)ofDirective83/349/EEC(
2),orasimilar
relationshipbetweenanynaturalorlegalpersonandanunder-taking; any subsidiary undertaking of a subsidiary undertakingshall also be considered a subsidiary of the parent undertakingwhich is at the head of those undertakings.
A situation in which two or more natural or legal persons are
permanently linked to one and the same person by a control rela-tionshipshallalsoberegardedasconstitutingacloselinkbetweensuch persons.
▼
B
Article 2
1. ThisDirectiveshallapplytoallinvestmentfirms.Onlyparagraph
4 of this Article and Articles 8 (2), 10, 11, 12, first paragraph, 14 (3)and (4), 15, 19 and 20, however, shall apply to credit institutions theauthorization of which, under Directives 77/780/EEC and 89/646/EEC,coversoneormoreoftheinvestmentserviceslistedinSectionAoftheAnnex to this Directive.
(1) OJ No L193, 18. 7. 1983, p. 1. Directive last amended by Directive 90/
605/EEC (OJ No L317, 16. 11. 1990, p. 60).
(2) OJ No L193, 18. 7. 1983, p. 1. Directive as last amended by Directive
90/605/EEC (OJ No L317, 16. 11. 1990, p. 60).
1993L0022 — EN — 07.08.1995 — 001.001 — 10
▼B
2. This Directive shall not apply to:
(a) insurance undertakings as defined in Article 1 of Directive 73/
239/EEC(1)orArticle1ofDirective79/267/EEC(2)orundertak-
ingscarryingonthereinsuranceandretrocessionactivitiesreferredto in Directive 64/225/EEC(
3);
(b) firmswhichprovideinvestmentservicesexclusivelyfortheirparent
undertakings,fortheirsubsidiariesorforothersubsidiariesoftheirparent undertakings;
(c) persons providing an investment service where that service is
provided in an incidental manner in the course of a professionalactivity and that activity is regulated by legal or regulatory provi-sions or a code of ethics governing the profession which do notexclude the provision of that service;
(d) firmsthatprovideinvestmentservicesconsistingexclusivelyinthe
administration of employee-participation schemes;
(e) firmsthatprovideinvestmentservicesthatconsistinprovidingboth
the services referred to in (b) and those referred to in (d);
(f) the central banks of Member States and other national bodies
performing similar functions and other public bodies charged withor intervening in the management of the public debt;
(g) firms
— which may not hold clients’ funds or securities and which for
that reason may not at any time place themselves in debit withtheir clients, and
— whichmaynotprovideanyinvestmentserviceexcepttherecep-
tion and transmission of orders in transferable securities andunits in collective investment undertakings, and
— which in the course of providing that service may transmit
orders only to
(i) investment firms authorized in accordance with this
Directive;
(ii) creditinstitutionsauthorizedinaccordancewithDirectives
77/780/EEC and 89/646/EEC;
(iii) branchesofinvestmentfirmsorofcreditinstitutionswhich
are authorized in a third country and which are subject toand comply with prudential rules considered by thecompetent authorities as at least as stringent as those laiddown in this Directive, in Directive 89/646/EEC or inDirective 93/6/EEC;
(iv) collective investment undertakings authorized under the
lawofaMemberStatetomarketunitstothepublicandtothe managers of such undertakings;
(v) investment companies with fixed capital, as defined in
Article15(4)ofDirective77/91/EEC(
4),thesecuritiesof
which are listed or dealt in on a regulated market in aMember State;
— theactivitiesofwhicharegovernedatnationallevelbyrulesor
by a code of ethics;
(h) collective investment undertakings whether coordinated at
Communitylevelornotandthedepositariesandmanagersofsuchundertakings;
(i) persons whose main business is trading in commodities amongst
selvesorwithproducersorprofessionalusersofsuchproductsand
(1) OJ No L228, 16. 8. 1973, p. 3. Directive last amended by Directive 90/
619/EEC (OJ No L330, 29. 11. 1990, p. 50).
(2) OJ No L63, 13. 3. 1979, p. 1. Directive last amended by Directive 90/
618/EEC (OJ No L330, 29. 11. 1990, p. 44).
(3) OJ No 56, 4. 4. 1964, p. 878/64.
(4) OJ No L26, 30. 1. 1977, p. 1. Directive last amended by the Act of
Accession of Spain and Portugal.
1993L0022 — EN — 07.08.1995 — 001.001 — 11
▼B
who provide investment services only for such producers and
professional users to the extent necessary for their main business;
(j) firms that provide investment services consisting exclusively in
dealing for their own account on financial-futures or optionsmarkets or which deal for the accounts of other members of thosemarkets or make prices for them and which are guaranteed byclearingmembersofthesamemarkets.Responsibilityforensuringthe performance of contracts entered into by such firms must beassumed by clearing members of the same markets;
(k) associations set up by Danish pension funds with the sole aim of
managing the assets of pension funds that are members of thoseassociations;
(l) ‘agenti di cambio'whose activities and functions are governed by
Italian Royal Decree No 222 of 7 March 1925 and subsequentprovisions amending it, and who are authorized to carry on theiractivities under Article 19 of Italian Law No 1 of 2 January 1991.
3. Nolaterthan31December1998andatregularintervalsthereafter
the Commission shall report on the application of paragraph 2 inconjunctionwithSectionAoftheAnnexandshall,whereappropriate,proposeamendmentstothedefinitionoftheexclusionsandtheservicescovered in the light of the operation of this Directive.
4. The rights conferred by this Directive shall not extend to the
provision of services as counterparty to the State, the central bank orotherMemberStatenationalbodiesperformingsimilarfunctionsinthepursuit of the monetary, exchange-rate, public-debt and reservesmanagement policies of the Member State concerned.
TITLE II
Conditions for taking up business
Article 3
1. Each Member State shall make access to the business of invest-
ment firms subject to authorization for investment firms of which it isthe home Member State. Such authorization shall be granted by thehome Member State’s competent authorities designated in accordancewithArticle22.TheauthorizationshallspecifytheinvestmentservicesreferredtoinSectionAoftheAnnexwhichtheundertakingisauthor-ized to provide. The authorization may also cover one or more of thenon-core services referred to in Section C of the Annex. Authorizationwithin the meaning of this Directive may in no case be granted forservices covered only by Section C of the Annex.
2. Each Member State shall require that:
— any investment firm which is a legal person and which, under its
nationallaw,hasaregisteredofficeshallhaveitsheadofficeinthesame Member State as its registered office,
— anyotherinvestmentfirmshallhaveitsheadofficeintheMember
State which issued its authorization and in which it actually carrieson its business.
3. Without prejudice to other conditions of general application laid
downbynationallaw,thecompetentauthoritiesshallnotgrantauthori-zation unless:
— an investment firm has sufficient initial capital in accordance with
the rules laid down in Directive 93/6/EEC having regard to thenature of the investment service in question,
— the persons who effectively direct the business of an investment
firmareofsufficientlygoodreputeandaresufficientlyexperienced.
The direction of a firm’s business must be decided by at least two
persons meeting the above conditions. Where an appropriate arrange-ment ensures that the same result will be achieved, however, particu-larly in the cases provided for in the last indent of the third subpara-graphofArticle1(2),thecompetentauthoritiesmaygrantauthorizationtoinvestmentfirmswhicharenaturalpersonsor,takingaccountofthenature and volume of their activities, to investment firms which are
1993L0022 — EN — 07.08.1995 — 001.001 — 12
▼B
legalpersonswheresuchfirmsaremanagedbysinglenaturalpersonsinaccordance with their articles of association and national laws.
▼
M1
Moreover, where close links exist between the investment firm andother natural or legal persons, the competent authorities shall grantauthorizationonlyifthoselinksdonotpreventtheeffectiveexerciseoftheir supervisory functions.
The competent authorities shall also refuse authorization if the laws,
regulations or administrative provisions of a non-member countrygoverning one or more natural or legal persons with which the under-taking has close links, or difficulties involved in their enforcement,prevent the effective exercise of their supervisory functions.
The competent authorities shall require investment firms to provide
themwiththeinformationtheyrequiretomonitorcompliancewiththeconditions referred to in this paragraph on a continuous basis.
▼
B
4. MemberStatesshallalsorequirethateveryapplicationforauthor-izationbeaccompaniedbyaprogrammeofoperationssettingout inter
aliathetypesofbusinessenvisagedandtheorganizationalstructureof
the investment firm concerned.
5. An applicant shall be informed within six months of the submis-
sion of a complete application whether or not authorization has beengranted. Reasons shall be given whenever an authorization is refused.
6. Aninvestmentfirmmaycommencebusinessassoonasauthoriza-
tion has been granted.
7. The competent authorities may withdraw the authorization issued
to an investment firm subject to this Directive only where that invest-ment firm:
(a) doesnotmakeuseoftheauthorizationwithin12months,expressly
renounces the authorization or ceased to provide investmentservicesmorethansixmonthspreviouslyunlesstheMemberStateconcerned has provided for authorization to lapse in such cases;
(b) hasobtainedtheauthorizationbymakingfalsestatementsorbyany
other irregular means;
(c) no longer fulfils the conditions under which authorization was
granted;
(d) no longer complies with Directive 93/6/EEC;
(e) has seriously and systematically infringed the provisions adopted
pursuant to Articles 10 or 11; or
(f) fallswithinanyofthecaseswherenationallawprovidesforwith-
drawal.
Article 4
The competent authorities shall not grant authorization to take up the
business of investment firms until they have been informed of theidentities of the shareholders or members, whether direct or indirect,natural or legal persons, that have qualifying holdings and of theamounts of those holdings.
The competent authorities shall refuse authorization if, taking into
account the need to ensure the sound and prudent management of aninvestment firm, they are not satisfied as to the suitability of theaforementioned shareholders or members.
Article 5
Inthecaseofbranchesofinvestmentfirmsthathaveregisteredoffices
outwith the Community and are commencing or carrying on business,the Member States shall not apply provisions that result in treatmentmorefavourablethanthataccordedtobranchesofinvestmentfirmsthathave registered offices in Member States.
1993L0022 — EN — 07.08.1995 — 001.001 — 13
▼B
Article 6
ThecompetentauthoritiesoftheotherMemberStateinvolvedshallbe
consultedbeforehandontheauthorizationofanyinvestmentfirmwhichis:
— asubsidiaryofaninvestmentfirmorcreditinstitutionauthorizedin
another Member State,
— a subsidiary of the parent undertaking of an investment firm or
credit institution authorized in another Member State,
or
— controlledbythesamenaturalorlegalpersonsascontrolaninvest-
ment firm or credit institution authorized in another Member State.
TITLE III
Relations with third countries
Article 7
1. The competent authorities of the Member States shall inform the
Commission:
(a) of the authorization of any firm which is the direct or indirect
subsidiary of a parent undertaking governed by the law of a thirdcountry;
(b) whenever such a parent undertaking acquires a holding in a
Community investment firm such that the latter would become itssubsidiary.
InbothcasestheCommissionshallinformtheCounciluntilsuchtime
asacommitteeontransferablesecuritiesissetupbytheCouncilactingon a proposal from the Commission.
Whenauthorizationisgrantedtoanyfirmwhichisthedirectorindirect
subsidiary of a parent undertaking governed by the law of a thirdcountry, the competent authorities shall specify the structure of thegroup in the notification which they address to the Commission.
2. The Member States shall inform the Commission of any general
difficultieswhichtheirinvestmentfirmsencounterinestablishingthem-selves or providing investment services in any third country.
3. Initially no later than six months before this Directive is brought
into effect and thereafter periodically the Commission shall draw up areport examining the treatment accorded to Community investmentfirmsinthirdcountries,inthetermsreferredtoinparagraphs4and5,as regards establishment, the carrying on of investment services activi-ties and the acquisition of holdings in third-country investment firms.TheCommissionshallsubmitthosereportstotheCounciltogetherwithany appropriate proposals.
4. WheneveritappearstotheCommission,eitheronthebasisofthe
reportsprovidedforinparagraph3oronthebasisofotherinformation,that a third country does not grant Community investment firms effec-tive market access comparable to that granted by the Community toinvestment firms from that third country, the Commission may submitproposalstotheCouncilforanappropriatemandatefornegotiationwitha view to obtaining comparable competitive opportunities forCommunity investment firms. The Council shall act by a qualifiedmajority.
5. WheneveritappearstotheCommission,eitheronthebasisofthe
reports referred to in paragraph 3 or on the basis of other information,that Community investment firms in a third country are not grantednational treatment affording the same competitive opportunities as areavailabletodomesticinvestmentfirmsandthattheconditionsofeffec-tivemarketaccessarenotfulfilled,theCommissionmayinitiatenego-tiations in order to remedy the situation.
Inthecircumstancesdescribedinthefirstsubparagraphitmayalsobe
decided,atanytimeandinadditiontotheinitiationofnegotiations,inaccordance with the procedure to be laid down in the Directive by
1993L0022 — EN — 07.08.1995 — 001.001 — 14
▼B
whichtheCouncilwillsetupthecommitteereferredtoinparagraph1,
that the competent authorities of the Member States must limit orsuspendtheirdecisionsregardingrequestspendingorfuturerequestsforauthorizationandtheacquisitionofholdingsbydirectorindirectparentundertakingsgovernedbythelawofthethirdcountryinquestion.Theduration of such measures may not exceed three months.
Beforetheendofthatthree-monthperiodandinthelightoftheresults
of the negotiations the Council may, acting on a proposal from theCommission,decidebyaqualifiedmajoritywhetherthemeasuresshallbe continued.
Suchlimitationsorsuspensionsmaynotbeappliedtothesettingupof
subsidiaries by investment firms duly authorized in the Community orby their subsidiaries, or to the acquisition of holdings in Communityinvestment firms by such firms or subsidiaries.
6. WheneveritappearstotheCommissionthatoneofthesituations
describedinparagraphs4and5obtains,theMemberStatesshallinformit at its request:
(a) of any application for the authorization of any firm which is the
directorindirectsubsidiaryofaparentundertakinggovernedbythelaw of the third country in question;
(b) whenevertheyareinformedinaccordancewithArticle10thatsuch
aparentundertakingproposestoacquireaholdinginaCommunityinvestment firm such that the latter would become its subsidiary.
This obligation to provide information shall lapse whenever agreement
isreachedwiththethirdcountryreferredtoinparagraph4or5orwhenthe measures referred to in the second and third subparagraphs ofparagraph 5 cease to apply.
7. MeasurestakenunderthisArticleshallcomplywiththeCommu-
nity’sobligationsunderanyinternationalagreements,bilateralormulti-lateral,governingthetakinguporpursuitofthebusinessofinvestmentfirms.
TITLE IV
Operating conditions
Article 8
1. The competent authorities of the home Member States shall
require that an investment firm which they have authorized comply atall times with the conditions imposed in Article 3 (3).
2. ThecompetentauthoritiesofthehomeMemberStateshallrequire
that an investment firm which they have authorized comply with therules laid down in Directive 93/6/EEC.
3. The prudential supervision of an investment firm shall be the
responsibility of the competent authorities of the home Member Statewhethertheinvestmentfirmestablishesabranchorprovidesservicesinanother Member State or not, without prejudice to those provisions ofthis Directive which give responsibility to the authorities of the hostMember State.
Article 9
1. MemberStatesshallrequireanypersonwhoproposestoacquire,
directlyorindirectly,aqualifyingholdinginaninvestmentfirmfirsttoinformthecompetentauthorities,tellingthemofthesizeofhisintendedholding. Such a person shall likewise inform the competent authoritiesif he proposes to increase his qualifying holding so that the proportionofthevotingrightsorofthecapitalthatheholdswouldreachorexceed20, 33, or 50% or so that the investment firm would become hissubsidiary.
Without prejudice to paragraph 2, the competent authorities shall have
uptothreemonthsfromthedateofthenotificationprovidedforinthefirst subparagraph to oppose such a plan if, in view of the need toensuresoundandprudentmanagementoftheinvestmentfirm,theyare
1993L0022 — EN — 07.08.1995 — 001.001 — 15
▼B
not satisfied as to the suitability of the person referred to in the first
subparagraph. If they do not oppose the plan, they may fix a deadlinefor its implementation.
2. If the acquirer of the holding referred to in paragraph 1 is an
investment firm authorized in another Member State or the parentundertaking of an investment firm authorized in another Member Stateor a person controlling an investment firm authorized in anotherMember State and if, as a result of that acquisition, the firm in whichtheacquirerproposestoacquireaholdingwouldbecometheacquirer’ssubsidiaryorcomeunderhiscontrol,theassessmentoftheacquisitionmust be the subject of the prior consultation provided for in Article 6.
3. MemberStatesshallrequireanypersonwhoproposestodispose,
directlyorindirectly,ofaqualifyingholdinginaninvestmentfirmfirstto inform the competent authorities, telling them of the size of hisholding. Such a person shall likewise inform the competent authoritiesifheproposestoreducehisqualifyingholdingsothattheproportionofthevotingrightsorofthecapitalheldbyhimwouldfallbelow20,33or50%orsothattheinvestmentfirmwouldceasetobehissubsidiary.
4. On becoming aware of them, investment firms shall inform the
competent authorities of any acquisitions or disposals of holdings intheir capital that cause holdings to exceed or fall below any of thethresholds referred to in paragraphs 1 and 3.
Atleastonceayeartheyshallalsoinformthecompetentauthoritiesof
thenamesofshareholdersandmemberspossessingqualifyingholdingsand the sizes of such holdings as shown, for example, by the informa-tion received at annual general meetings of shareholders and membersor as a result of compliance with the regulations applicable to compa-nies listed on stock exchanges.
5. MemberStatesshallrequirethat,wheretheinfluenceexercisedby
the persons referred to in paragraph 1 is likely to be prejudicial to thesound and prudent management of an investment firm, the competentauthorities take appropriate measures to put an end to that situation.Such measures may consist, for example, in injunctions, sanctionsagainstdirectorsandthoseresponsibleformanagementorsuspensionofthe exercise of the voting rights attaching to the shares held by theshareholders or members in question.
Similar measures shall apply to persons failing to comply with the
obligation to provide prior information imposed in paragraph 1. If aholdingisacquireddespitetheoppositionofthecompetentauthorities,the Member States shall, regardless of any other sanctions to beadopted, provide either for exercise of the corresponding voting rightstobesuspended,forthenullityofthevotescastorforthepossibilityoftheir annulment.
Article 10
1. Each home Member State shall draw up prudential rules which
investmentfirmsshallobserveatalltimes.Inparticular,suchrulesshallrequire that each investment firm:
— have sound administrative and accounting procedures, control and
safeguardarrangementsforelectronicdataprocessing,andadequateinternal control mechanisms including, in particular, rules forpersonal transactions by its employees,
— makeadequatearrangementsforinstrumentsbelongingtoinvestors
withaviewtosafeguardingthelatter’sownershiprights,especiallyin the event of the ►
C1investment firm’s insolvency, and to
preventingtheinvestmentfirm’susinginvestors’instrumentsforitsown account ◄except with the investors’ express consent,
— makeadequatearrangementsforfundsbelongingtoinvestorswitha
view to safeguarding the latter’s rights and, except in the case ofcreditinstitutions,preventingtheinvestmentfirm’susinginvestors’funds for its own account,
— arrange for records to be kept of transactions executed which shall
atleastbesufficienttoenablethehomeMemberState’sauthoritiesto monitor compliance with the prudential rules which they are
1993L0022 — EN — 07.08.1995 — 001.001 — 16
▼B
responsible for applying; such records shall be retained for periods
to be laid down by the competent authorities,
— bestructuredandorganizedinsuchawayastominimizetheriskof
clients’ interests being prejudiced by conflicts of interest betweenthe firm and its clients or between one of its clients and another.Nevertheless, where a branch is set up the organizational arrange-ments may not conflict with the rules of conduct laid down by thehost Member State to cover conflicts of interest.
Article 11
1. Member States shall draw up rules of conduct which investment
firmsshallobserveatalltimes.Suchrulesmustimplementatleasttheprinciplessetoutinthefollowingindentsandmustbeappliedinsuchaway as to take account of the professional nature of the person forwhomtheserviceisprovided.TheMemberStatesshallalsoapplytheserules where appropriate to the non-core services listed in Section C ofthe Annex. These principles shall ensure that an investment firm:
— acts honestly and fairly in conducting its business activities in the
best interests of its clients and the integrity of the market,
— acts with due skill, care and diligence, in the best interests of its
clients and the integrity of the market,
— has and employs effectively the resources and procedures that are
necessary for the proper performance of its business activities,
— seeks from its clients information regarding their financial situa-
tions, investment experience and objectives as regards the servicesrequested,
— makes adequate disclosure of relevant material information in its
dealings with its clients,
— tries to avoid conflicts of interests and, when they cannot be
avoided, ensures that its clients are fairly treated, and
— complieswithallregulatoryrequirementsapplicabletotheconduct
of its business activities so as to promote the best interests of itsclients and the integrity of the market.
2. Without prejudice to any decisions to be taken in the context of
theharmonizationoftherulesofconduct,theirimplementationandthesupervision of compliance with them shall remain the responsibility ofthe Member State in which a service is provided.
3. Where an investment firm executes an order, for the purposes of
applying the rules referred to in paragraph 1the professional nature ofthe investor shall be assessed with respect to the investor from whomtheorderoriginates,regardlessofwhethertheorderwasplaceddirectlyby the investor himself or indirectly through an investment firmproviding the service referred to in Section A (1) (a) of the Annex.
Article 12
Before doing business with them, a firm shall inform investors which
compensationfundorequivalentprotectionwillapplyinrespectofthetransactions envisaged, what cover is offered by whichever systemapplies, or if there is no fund or compensation.
TheCouncilnotestheCommission’sstatementtotheeffectthatitwill
submit proposals on the harmonization of compensation systemscoveringtransactionsbyinvestmentfirmsby31July1993atthelatest.The Council will act on those proposals within the shortest possibletime with the aim of bringing the systems proposed into effect on thesame date as this Directive.
Article 13
This Directive shall not prevent investment firms authorized in other
Member States from advertising their services through all availablemeans of communication in their host Member States, subject to anyrulesgoverningtheformandthecontentofsuchadvertisingadoptedinthe interest of the general good.
1993L0022 — EN — 07.08.1995 — 001.001 — 17
▼B
TITLE V
The right of establishment and the freedom to provide services
Article 14
1. MemberStatesshallensurethatinvestmentservicesandtheother
serviceslistedinSectionCoftheAnnexmaybeprovidedwithintheirterritories in accordance with Articles 17, 18 and 19 either by theestablishment of a branch or under the freedom to provide services byanyinvestmentfirmauthorizedandsupervisedbythecompetentauthor-ities of another Member State in accordance with this Directive,provided that such services are covered by the authorization.
This Directive shall not affect the powers of host Member States in
respect of the units of collective investment undertakings to whichDirective 85/611/EEC(
1) does not apply.
2. MemberStatesmaynotmaketheestablishmentofabranchorthe
provisionofservicesreferredtoinparagraph1subjecttoanyauthoriza-tionrequirement,toanyrequirementtoprovideendowmentcapitalortoany other measure having equivalent effect.
3. A Member State may require that transactions relating to the
services referred to in paragraph 1must, where they satisfy all thefollowing criteria, be carried out on a regulated market:
— the investor must be habitually resident or established in that
Member State,
— theinvestmentfirmmustcarryoutsuchtransactionsthroughamain
establishment, through a branch situated in that Member State orunder the freedom to provide services in that Member State,
— the transaction must involve a instrument dealt in on a regulated
market in that Member State.
4. WhereaMemberStateappliesparagraph3itshallgiveinvestors
habitually resident or established in that Member State the right not tocomplywiththeobligationimposedinparagraph3andhavethetrans-actions referred to in paragraph 3 carried out away from a regulatedmarket. Member States may make the exercise of this right subject toexpressauthorization,takingintoaccountinvestors’differingneedsforprotection and in particular the ability of professional and institutionalinvestors to act in their own best interests. It must in any case bepossible for such authorization to be given in conditions that do notjeopardize the prompt execution of investors’ orders.
5. TheCommissionshallreportontheoperationofparagraphs3and
4 not later than 31 December 1998 and shall, if appropriate, proposeamendments thereto.
Article 15
1. Without prejudice to the exercise of the right of establishment or
thefreedomtoprovideservicesreferredtoinArticle14,hostMemberStates shall ensure that investment firms which are authorized by thecompetent authorities of their home Member States to provide theservicesreferredtoinSectionA(1)(b)and(2)oftheAnnexcan,eitherdirectly or indirectly, become members of or have access to the regu-lated markets in their host Member States where similar services areprovided and also become members of or have access to the clearingand settlement systems which are provided for the members of suchregulated markets there.
Member States shall abolish any national rules or laws or rules of
regulated markets which limit the number of persons allowed accessthereto. If, by virtue of its legal structure or its technical capacity,
(1) OJ No L375, 31. 12. 1985, p. 3. Directive last amended by Directive
88/220/EEC (OJ No L100, 19. 4. 1988, p. 31).
1993L0022 — EN — 07.08.1995 — 001.001 — 18
▼B
access to a regulated market is limited, the Member State concerned
shall ensure that its structure and capacity are regularly adjusted.
2. Membership of or access to a regulated market shall be condi-
tional on investment firms’ complying with capital adequacy require-ments and home Member States’ supervising such compliance inaccordance with Directive 93/6/EEC.
Host Member States shall be entitled to impose additional capital
requirements only in respect of matters not covered by that Directive.
Access to a regulated market, admission to membership thereof and
continuedaccessormembershipshallbesubjecttocompliancewiththerulesoftheregulatedmarketinrelationtotheconstitutionandadminis-trationoftheregulatedmarketandtocompliancewiththerulesrelatingto transactions on the market, with the professional standards imposedon staff operating on and in conjunction with the market, and with therules and procedures for clearing and settlement. The detailed arrange-ments for implementing these rules and procedures may be adapted asappropriate, inter aliato ensure fulfilment of the ensuing obligations,
provided, however, that Article 28 is complied with.
3. In order to meet the obligation imposed in paragraph 1, host
Member States shall offer the investment firms referred to in thatparagraph the choice of becoming members of or of having access totheir regulated markets either:
— directly, by setting up branches in the host Member States, or
— indirectly,bysettingupsubsidiariesinthehostMemberStatesorby
acquiringfirmsinthehostMemberStatesthatarealreadymembersof their regulated markets or already have access thereto.
However, those Member States which, when this Directive is adopted,
apply laws which do not permit credit institutions to become membersof or have access to regulated markets unless they have specializedsubsidiaries may continue until 31 December 1996to apply the sameobligationinanon-discriminatorywaytocreditinstitutionsfromotherMember States for purposes of access to those regulated markets.
The Kingdom of Spain, the Hellenic Republic and the Portuguese
Republic may extend that period until 31 December 1999. One yearbefore that date the Commission shall draw up a report, taking intoaccount the experience acquired in applying this Article and shall ifappropriate, submit a proposal. The Council may, acting by qualifiedmajority on the basis of that proposal, decide to review those arrange-ments.
4. Subject to paragraphs 1, 2 and 3, where the regulated market of
thehostMemberStateoperateswithoutanyrequirementforaphysicalpresence the investment firms referred to in paragraph 1may becomemembersoforhaveaccesstoitonthesamebasiswithouthavingtobeestablished in the host Member State. In order to enable their invest-ment firms to become members of or have access to host MemberStates’ regulated markets in accordance with this paragraph homeMemberStatesshallallowthosehostMemberStates’regulatedmarketsto provide appropriate facilities within the home Member States’ terri-tories.
5. ThisArticleshallnotaffecttheMemberStates’righttoauthorize
or prohibit the creation of new markets within their territories.
6. This Article shall have no effect:
— intheFederalRepublicofGermany,ontheregulationoftheactivi-
ties ofKursmakler,o r
— in the Netherlands, on the regulation of the activities of hoek-
mannen.
Article 16
For the purposes of mutual recognition and the application of this
Directive, it shall be for each Member State to draw up a list of theregulated markets for which it is the home Member State and whichcomply with its regulations, and to forward that list for information,
1993L0022 — EN — 07.08.1995 — 001.001 — 19
▼B
together with the relevant rules of procedures and operation of those
regulated markets, to the other Member States and the Commission. Asimilarcommunicationshallbeeffectedinrespectofeachchangetotheaforementioned list or rules. The Commission shall publish the lists ofregulated markets and updates thereto in the Official Journal of the
European Communities at least once a year.
No later than 31 December 1996the Commission shall report on the
informationthusreceivedand,whereappropriate,proposeamendmentstothedefinitionofregulatedmarketforthepurposesofthisDirective.
Article 17
1. In addition to meeting the conditions imposed in Article 3, any
investment firm wishing to establish a branch within the territory ofanotherMemberStateshallnotifythecompetentauthoritiesofitshomeMember State.
2. Member States shall require every investment firm wishing to
establish a branch within the territory of another Member State toprovide the following information when effecting the notificationprovided for in paragraph 1:
(a) theMemberStatewithintheterritoryofwhichitplanstoestablish
a branch;
(b) a programme of operations setting out inter aliathe types of busi-
ness envisaged and the organizational structure of the branch;
(c) the address in the host Member State from which documents may
be obtained;
(d) the names of those responsible for the management of the branch.
3. UnlessthecompetentauthoritiesofthehomeMemberStatehave
reason to doubt the adequacy of the administrative structure or thefinancialsituationofaninvestmentfirm,takingintoaccounttheactivi-ties envisaged, they shall, within three months of receiving all theinformationreferredtoinparagraph2,communicatethatinformationtothecompetentauthoritiesofthehostMemberStateandshallinformtheinvestment firm concerned accordingly.
They shall also communicate details of any compensation scheme
intended to protect the branch’s investors.
Where the competent authorities of the home Member State refuse to
communicate the information referred to in paragraph 2to thecompetentauthoritiesofthehostMemberState,theyshallgivereasonsfor their refusal to the investment firm concerned within three monthsofreceivingalltheinformation.Thatrefusalorfailuretoreplyshallbesubject to the right to apply to the courts in the home Member States.
4. Beforethebranchofaninvestmentfirmcommencesbusinessthe
competent authorities of the host Member State shall, within twomonthsofreceivingtheinformationreferredtoinparagraph3,prepareforthesupervisionoftheinvestmentfirminaccordancewithArticle19and,ifnecessary,indicatetheconditions,includingtherulesofconduct,under which, in the interest of the general good, that business must becarried on in the host Member State.
5. On receipt of a communication from the competent authorities of
the host Member State or on the expiry of the period provided for inparagraph 4 without receipt of any communication from those authori-ties, the branch may be established and commence business.
6. Intheeventofachangeinanyoftheparticularscommunicatedin
accordance with paragraph 2 (b), (c) or (d), an investment firm shallgive written notice of that change to the competent authorities of thehomeandhostMemberStatesatleastonemonthbeforeimplementingthechangesothatthecompetentauthoritiesofthehomeMemberStatemaytakeadecisiononthechangeunderparagraph3andthecompetentauthorities of the host Member State may do so under paragraph 4.
7. In the event of a change in the particulars communicated in
accordancewiththesecondsubparagraphofparagraph3,theauthorities
1993L0022 — EN — 07.08.1995 — 001.001 — 20
▼B
of the home Member State shall inform the authorities of the host
Member State accordingly.
Article 18
1. Any investment firm wishing to carry on business within the
territoryofanotherMemberStateforthefirsttimeunderthefreedomtoprovide services shall communicate the following information to thecompetent authorities of its home Member State:
— the Member State in which it intends to operate,
— a programme of operations stating in particular the investment
service or services which it intends to provide.
2. ThecompetentauthoritiesofthehomeMemberStateshall,within
one month of receiving the information referred to in paragraph 1,forward it to the competent authorities of the host Member State. Theinvestment firm may then start to provide the investment service orservices in question in the host Member State.
Whereappropriate,thecompetentauthoritiesofthehostMemberState
shall, on receipt of the information referred to in paragraph 1, indicateto the investment firm the conditions, including the rules of conduct,with which, in the interest of the general good, the providers of theinvestmentservicesinquestionmustcomplyinthehostMemberState.
3. Should the content of the information communicated in accord-
ancewiththesecondindentofparagraph1beamended,theinvestmentfirm shall give notice of the amendment in writing to the competentauthorities of the home Member State and of the host Member Statebeforeimplementingthechange,sothatthecompetentauthoritiesofthehostMemberStatemay,ifnecessary,informthefirmofanychangeoraddition to be made to the information communicated under paragraph2.
Article 19
1. Host Member States may, for statistical purposes, require all
investmentfirmswithbrancheswithintheirterritoriestoreportperiodi-cally on their activities in those host Member States to the competentauthorities of those host Member States.
In discharging their responsibilities in the conduct of monetary policy,
withoutprejudicetothemeasuresnecessaryforthestrengtheningoftheEuropeanMonetarySystem,hostMemberStatesmaywithintheirterri-tories require all branches of investment firms originating in otherMember States to provide the same particulars as national investmentfirms for that purpose.
2. In discharging their responsibilities under this Directive, host
MemberStatesmayrequirebranchesofinvestmentfirmstoprovidethesame particulars as national firms for that purpose.
HostMemberStatesmayrequireinvestmentfirmscarryingonbusiness
withintheirterritoriesunderthefreedomtoprovideservicestoprovidethe information necessary for the monitoring of their compliance withthestandardssetbythehostMemberStatethatapplytothem,althoughthose requirements may not be more stringent than those which thesameMemberStateimposesonestablishedfirmsforthemonitoringoftheir compliance with the same standards.
3. WherethecompetentauthoritiesofahostMemberStateascertain
thataninvestmentfirmthathasabranchorprovidesserviceswithinitsterritoryisinbreachofthelegalorregulatoryprovisionsadoptedinthatStatepursuanttothoseprovisionsofthisDirectivewhichconferpowerson the host Member State’s competent authorities, those authoritiesshallrequiretheinvestmentfirmconcernedtoputanendtoitsirregularsituation.
4. Iftheinvestmentfirmconcernedfailstotakethenecessarysteps,
the competent authorities of the host Member State shall inform thecompetentauthoritiesofthehomeMemberStateaccordingly.Thelattershall,attheearliestopportunity,takeallappropriatemeasurestoensurethattheinvestmentfirmconcernedputsanendtoitsirregularsituation.
1993L0022 — EN — 07.08.1995 — 001.001 — 21
▼B
The nature of those measures shall be communicated to the competent
authorities of the host Member State.
5. If, despite the measures taken by the home Member State or
because such measures prove inadequate or are not available in theState in question, the investment firm persists in violating the legal orregulatory provisions referred to in paragraph 2 in force in the hostMemberState,thelattermay,afterinformingthecompetentauthoritiesof the home Member State, take appropriate measures to prevent or topenalizefurtherirregularitiesand,insofarasnecessary,topreventthatinvestmentfirmfrominitiatinganyfurthertransactionswithinitsterri-tory. The Member States shall ensure that within their territories it ispossible to serve the legal documents necessary for those measures oninvestment firms.
6. The foregoing provisions shall not affect the powers of host
Member States to take appropriate measures to prevent or to penalizeirregularitiescommittedwithintheirterritorieswhicharecontrarytotherules of conduct introduced pursuant to Article 11 as well as to otherlegal or regulatory provisions adopted in the interest of the generalgood. This shall include the possibility of preventing offending invest-ment firms from initiating any further transactions within their terri-tories.
7. Any measure adopted pursuant to paragraphs 4, 5 or 6 involving
penaltiesorrestrictionsontheactivitiesofaninvestmentfirmmustbeproperlyjustifiedandcommunicatedtotheinvestmentfirmconcerned.Everysuchmeasureshallbesubjecttotherighttoapplytothecourtsinthe Member State which adopted it.
8. Before following the procedure laid down in paragraphs 3, 4 or
5thecompetentauthoritiesofthehostMemberStatemay,inemergen-cies,takeanyprecautionarymeasuresnecessarytoprotecttheinterestsof investors and others for whom services are provided. The Commis-sion and the competent authorities of the other Member Statesconcerned must be informed of such measures at the earliest oppor-tunity.
After consulting the competent authorities of the Member States
concerned,theCommissionmaydecidethattheMemberStateinques-tion must amend or abolish those measures.
9. In the event of the withdrawal of authorization, the competent
authorities of the host Member State shall be informed and shall takeappropriate measures to prevent the investment firm concerned frominitiating any further transactions within its territory and to safeguardinvestors’ interests. Every two years the Commission shall submit areport on such cases to the committee set up at a later stage in thesecurities field.
10. The Member States shall inform the Commission of the number
andtypeofcasesinwhichtherehavebeenrefusalspursuanttoArticle17ormeasureshavebeentakeninaccordancewithparagraph5.Everytwo years the Commission shall submit a report on such cases to thecommittee set up at a later date in the securities field.
Article 20
1. In order to ensure that the authorities responsible for the markets
and for supervision have access to the information necessary for theperformanceoftheirduties,homeMemberStatesshallatleastrequire:
(a) without prejudice to steps taken in implementation of Article 10,
that investment firms keep at the disposal of the authorities for atleast five years the relevant data on transactions relating to theservicesreferredtoinArticle14(1)whichtheyhavecarriedoutininstruments dealt in on a regulated market, whether such transac-tions were carried out on a regulated market or not;
(b) that investment firms report to competent authorities in their home
Member States all the transactions referred to in (a) where thosetransactions cover:
1993L0022 — EN — 07.08.1995 — 001.001 — 22
▼B
— shares or other instruments giving access to capital,
— bonds and other forms of securitized debt,— standardized forward contracts relating to shares or— standardized options on shares.
Such reports must be made available to the relevant authority at the
earliest opportunity. The time limit shall be fixed by that authority. Itmay be extended to the end of the following working day whereoperationalorpracticalreasonssodictatebutinnocircumstancesmayit exceed that limit.
Such reports must, in particular, include details of the names and
numbers of the instruments bought or sold, the dates and times of thetransactions,thetransactionpricesandmeansofidentifyingtheinvest-ment firms concerned.
Home Member States may provide that the obligation imposed in (b)
shall, in the case of bonds and other forms of securitized debt, applyonly to aggregated transactions in the same instrument.
2. Whereaninvestmentfirmcarriesoutatransactiononaregulated
marketinitshostMemberState,thehomeMemberStatemaywaiveitsownrequirementsasregardsreportingiftheinvestmentfirmissubjectto equivalent requirements to report the transaction in question to theauthorities in charge of that market.
3. Member States shall provide that the report referred to in para-
graph 1 (b) shall be made either by the investment firm itself or by atrade-matching system, or through stock-exchange authorities or thoseof another regulated market.
4. Member States shall ensure that the information available in
accordancewiththisArticleisalsoavailablefortheproperapplicationof Article 23.
5. EachMemberStatemay,inanon-discriminatorymanner,adoptor
maintainprovisionsmorestringentinthefieldgovernedbythisArticlewith regard to substance and form in respect of the conservation andreporting of data relating to transactions:
— carried out on a regulated market of which it is the home Member
State or
— carried out by investment firms of which it is the home Member
State.
Article 21
1. In order to enable investors to assess at any time the terms of a
transactiontheyareconsideringandtoverifyafterwardstheconditionsin which it has been carried out, each competent authority shall, foreachoftheregulatedmarketswhichithasenteredonthelistprovidedfor in Article 16, take measures to provide investors with the informa-tion referred to in paragraph 2. In accordance with the requirementsimposed in paragraph 2, the competent authorities shall determine theform in which and the precise time within which the information is tobeprovided,aswellasthemeansbywhichitistobemadeavailable,havingregardtothenature,sizeandneedsofthemarketconcernedandof the investors operating on that market.
2. The competent authorities shall require for each instrument at
least:
(a) publication at the start of each day’s trading on the market of the
weighted average price, the highest and the lowest prices and thevolumedealtinontheregulatedmarketinquestionforthewholeofthe preceding day’s trading;
(b) in addition, for continuous order-driven and quote-driven markets,
publication:
— attheendofeachhour’stradingonthemarket,oftheweighted
averagepriceandthevolumedealtinontheregulatedmarketinquestionforasix-hourtradingperiodendingsoastoleavetwohours’ trading on the market before publication, and
1993L0022 — EN — 07.08.1995 — 001.001 — 23
▼B
— every20minutes,oftheweightedaveragepriceandthehighest
and lowest prices on the regulated market in question for atwo-hourtradingperiodendingsoastoleaveonehour’stradingon the market before publication.
Where investors have prior access to information on the prices and
quantities for which transactions may be undertaken:
(i) such information shall be available at all times during market
trading hours;
(ii) the terms announced for a given price and quantity shall be terms
on which it is possible for an investor to carry out such a transac-tion.
Thecompetentauthoritiesmaydelayorsuspendpublicationwherethat
provestobejustifiedbyexceptionalmarketconditionsor,inthecaseofsmall markets, to preserve the anonymity of firms and investors. Thecompetentauthoritiesmayapplyspecialprovisionsinthecaseofexcep-tional transactions that are very large in scale compared with averagetransactionsinthesecurityinquestiononthatmarketandinthecaseofhighly illiquid securities defined by means of objective criteria andmade public. The competent authorities may also apply more flexibleprovisions,particularlyasregardspublicationdeadlines,fortransactionsconcerning bonds and other forms of securitized debt.
3. InthefieldgovernedbythisArticleeachMemberStatemayadopt
or maintain more stringent provisions or additional provisions withregard the substance and form in which information must be madeavailable to investors concerning transactions carried out on regulatedmarkets of which it is the home Member State, provided that thoseprovisionsapplyregardlessoftheMemberStateinwhichtheissuerofthe financial instrument is located or of the Member State on theregulated market of which the instrument was listed for the first time.
4. TheCommissionshallreportontheapplicationofthisArticleno
laterthan31December1997;theCouncilmay,onaproposalfromtheCommission, decide by a qualified majority to amend this Article.
TITLE VI
Authorities responsible for authorization and supervision
Article 22
1. MemberStatesshalldesignatethecompetentauthoritieswhichare
tocarryoutthedutiesprovidedforinthisDirective.Theyshallinformthe Commission thereof, indicating any division of those duties.
2. The authorities referred to in paragraph 1must be either public
authorities, bodies recognized by national law or bodies recognized bypublic authorities expressly empowered for that purpose by nationallaw.
3. Theauthoritiesconcernedmusthaveallthepowersnecessaryfor
the performance of their functions.
Article 23
1. Where there are two or more competent authorities in the same
MemberState,theyshallcollaboratecloselyinsupervisingtheactivitiesof investment firms operating in that Member State.
2. Member States shall ensure that such collaboration takes place
between such competent authorities and the public authorities respon-sibleforthesupervisionoffinancialmarkets,creditandotherfinancialinstitutions and insurance undertakings, as regards the entities whichthose authorities supervise.
3. Where, through the provision of services or by the establishment
ofbranches,aninvestmentfirmoperatesinoneormoreMemberStatesother than its home Member State the competent authorities of all theMemberStatesconcernedshallcollaboratecloselyinordermoreeffec-
1993L0022 — EN — 07.08.1995 — 001.001 — 24
▼B
tively to discharge their respective responsibilities in the area covered
by this Directive.
They shall supply one another on request with all the information
concerning the management and ownership of such investment firmsthatislikelytofacilitatetheirsupervisionandallinformationlikelytofacilitate the monitoring of such firms. In particular, the authorities ofthehomeMemberStateshallcooperatetoensurethattheauthoritiesofthe host Member State collect the particulars referred to in Article 19(2).
Insofarasitisnecessaryforthepurposeofexercisingtheirpowersof
supervision, the competent authorities of the home Member State shallbe informed by the competent authorities of the host Member State ofanymeasurestakenbythehostMemberStatepursuanttoArticle19(6)which involve penalties imposed on an investment firm or restrictionson an investment firm’s activities.
Article 24
1. Each host Member State shall ensure that, where an investment
firm authorized in another Member State carries on business within itsterritory through a branch, the competent authorities of the homeMemberStatemay,afterinformingthecompetentauthoritiesofthehostMember State, themselves or through the intermediary of persons theyinstruct for the purpose carry out on-the-spot verification of the infor-mation referred to in Article 23 (3).
2. ThecompetentauthoritiesofthehomeMemberStatemayalsoask
thecompetentauthoritiesofthehostMemberStatetohavesuchverifi-cationcarriedout.Authoritieswhichreceivesuchrequestsmust,withinthe framework of their powers, act upon them by carrying out theverificationsthemselves,byallowingtheauthoritieswhohaverequestedthem to carry them out or by allowing auditors or experts to do so.
3. ThisArticleshallnotaffecttherightofthecompetentauthorities
of a host Member State, in discharging their responsibilities under thisDirective,tocarryouton-the-spotverificationsofbranchesestablishedwithin their territory.
Article 25
1. Member States shall provide that all persons who work or who
have worked for the competent authorities, as well as auditors andexperts instructed by the competent authorities, shall be bound by theobligationofprofessionalsecrecy.Accordinglynoconfidentialinforma-tion which they may receive in the course of their duties may bedivulged to any person or authority whatsoever, save in summary oraggregate form such that individual investment firms cannot be identi-fied, without prejudice to cases covered by criminal law.
Nevertheless, where an investment firm has been declared bankrupt or
is being compulsorily wound up, confidential information which doesnotconcernthirdpartiesinvolvedinattemptstorescuethatinvestmentfirm may be divulged in civil or commercial proceedings.
2. Paragraph 1 shall not prevent the competent authorities of
different Member States from exchanging information in accordancewith this Directive or other Directives applicable to investment firms.That information shall be subject to the conditions of professionalsecrecy imposed in paragraph 1.
3. Member States may conclude cooperation agreements providing
for exchanges of information with the competent authorities of thirdcountries only if the information disclosed is covered by guarantees ofprofessional secrecy at least equivalent to those provided for in thisArticle.
4. Competent authorities receiving confidential information under
paragraph 1 or 2may use it only in the course of their duties:
— tocheckthattheconditionsgoverningthetakingupofthebusiness
of investment firms are met and to facilitate the monitoring, on anon-consolidated or consolidated basis, of the conduct of that busi-
1993L0022 — EN — 07.08.1995 — 001.001 — 25
▼B
ness, especially with regard to the capital adequacy requirementsimposed in Directive 93/6/EEC, administrative and accountingprocedures and internal-control mechanisms,
— to impose sanctions,— inadministrativeappealsagainstdecisionsbythecompetentauthor-
ities, or
— in court proceedings initiated under Article 26.
5. Paragraphs 1 and 4 shall not preclude the exchange of informa-
tion:
(a) within a Member State, where there are two or more competent
authorities, or
(b) within a Member State or between Member States, between
competent authorities and
— authorities responsible for the supervision of credit institutions,
otherfinancialorganizationsandinsuranceundertakingsandtheauthorities responsible for the supervision of financial markets,
— bodiesresponsiblefortheliquidationandbankruptcyofinvest-
ment firms and other similar procedures and
— persons responsible for carrying out statutory audits of the
accounts of investment firms and other financial institutions,
in the performance of their supervisory functions, or the disclosure
to bodies which administer compensation schemes of informationnecessary for the performance of their functions. Such informationshallbesubjecttotheconditionsofprofessionalsecrecyimposedinparagraph 1.
▼
M1
5a. Notwithstandingparagraphs1to4,MemberStatesmayauthorizeexchanges of information between, the competent authorities and:
— theauthoritiesresponsibleforoverseeingthebodiesinvolvedinthe
liquidation and bankruptcy of investment firms and other similarprocedures, or
— the authorities responsible for overseeing persons charged with
carrying out statutory audits of the accounts of insurance undertak-ings,creditinstitutions,investmentfirmsandotherfinancialinstitu-tions.
Member States which have recourse to the option provided for in the
firstsubparagraphshallrequireatleastthatthefollowingconditionsaremet:
— the information shall be for the purpose of performing the task of
overseeing referred to in the first subparagraph,
— information received in this context shall be subject to the condi-
tions of professional secrecy imposed in paragraph 1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competentauthorities which have disclosed it and, where appropriate, solelyfor the purposes for which those authorities gave their agreement.
Member States shall communicate to the Commission and to the other
MemberStatesthenamesoftheauthoritieswhichmayreceiveinforma-tion pursuant to this paragraph.
5b. Notwithstandingparagraphs1to4,MemberStatesmay,withthe
aim of strengthening the stability, including integrity, of the financialsystem, authorize the exchange of information between the competentauthorities and the authorities or bodies responsible under the law forthe detection and investigation of breaches of company law.
Member States which have recourse to the option provided for in the
firstsubparagraphshallrequireatleastthatthefollowingconditonsaremet:
— the information shall be for the purpose of performing the task
referred to in the first subparagraph,
1993L0022 — EN — 07.08.1995 — 001.001 — 26
▼M1
— information received in this context shall be subject to the condi-
tions of professional secrecy imposed in paragraph 1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competentauthorities which have disclosed it and, where appropriate, solelyfor the purposes for which those authorities gave their agreement.
Where, in a Member State, the authorities or bodies referred to in the
first subparagraph perform their task of detection or investigation withthe aid, in view of their specific competence, of persons appointed forthat purpose and not employed in the public sector, the possibility ofexchanging information provided for in the first subparagraph may beextended to such persons under the conditions stipulated in the secondsubparagraph.
In order to implement the final indent of the second subparagraph, the
authoritiesorbodiesreferredtointhefirstsubparagraphshallcommu-nicate to the competent authorities which have disclosed the informa-tion,thenamesandpreciseresponsibilitiesofthepersonstowhomitisto be sent.
Member States shall communicate to the Commission and to the other
Member States the names of the authorities or bodies which mayreceive information pursuant to this paragraph.
Before 31 December 2000, the Commission shall draw up a report on
the application of the provisions of this paragraph.
6. ThisArticleshallnotpreventacompetentauthorityfromtransmit-
ting:
— to central banks and other bodies with a similar function in their
capacity as monetary authorities,
— where appropriate, to other public authorities responsible for over-
seeing payment systems,
information intended for the performance of their task, nor shall it
prevent such authorities or bodies from communicating to thecompetent authorities such information as they may need for thepurposes of paragraph 4. Information received in this context shall besubjecttotheconditionsofprofessionalsecrecyimposedinthisArticle.
▼
B
7. This Article shall not prevent the competent authorities fromcommunicating the information referred to in paragraphs 1to 4to aclearing house or other similar body recognized under national law fortheprovisionofclearingorsettlementservicesforoneoftheirMemberState’smarketsiftheyconsiderthatitisnecessarytocommunicatetheinformationinordertoensuretheproperfunctioningofthosebodiesinrelation to defaults or potential defaults by market participants. Theinformation received shall be subject to the conditions of professionalsecrecy imposed in paragraph 1. The Member States shall, however,ensure that information received under paragraph 2may not bedisclosedinthecircumstancesreferredtointhisparagraphwithouttheexpress consent of the competent authorities which disclosed it.
8. In addition, notwithstanding the provisions referred to in para-
graphs1and4,MemberStatesmay,byvirtueofprovisionslaiddownby law, authorize the disclosure of certain information to other depart-mentsoftheircentralgovernmentadministrationsresponsibleforlegis-lation on the supervision of credit institutions, financial institutions,investment firms and insurance undertakings and to inspectorsinstructed by those departments.
Such disclosures may, however, be made only where necessary for
reasons of prudential control.
MemberStatesshall,however,providethatinformationreceivedunder
paragraphs 2 and 5 and that obtained by means of the on-the-spotverifications referred to in Article 24may never be disclosed in thecases referred to in this paragraph except with the express consent ofthe competent authorities which disclosed the information or of the
1993L0022 — EN — 07.08.1995 — 001.001 — 27
▼B
competent authorities of the Member State in which the on-the-spot
verification was carried out.
9. If, at the time of the adoption of this Directive, a Member State
providesfortheexchangeofinformationbetweenauthoritiesinordertocheckcompliancewiththelawsonprudentialsupervision,ontheorgan-ization, operation and conduct of commercial companies and on theregulation of financial markets, that Member State may continue toauthorize the forwarding of such information pending coordination ofall the provisions governing the exchange of information betweenauthoritiesfortheentirefinancialsectorbutnotinanycaseafter1July1996.
Member States shall, however, ensure that, where information comes
from another Member State, it may not be disclosed in the circum-stancesreferredtointhefirstsubparagraphwithouttheexpressconsentofthecompetentauthoritieswhichdiscloseditanditmaybeusedonlyfor the purposes for which those authorities gave their agreement.
TheCouncilshalleffectthecoordinationreferredtointhefirstsubpara-
graph on the basis of a Commission proposal. The Council notes theCommission’sstatementtotheeffectthatitwillsubmitproposalsby31July 1993 at the latest. The Council will act on those proposals withinthe shortest possible time with the intention of bringing the rulesproposed into effect on the same date as this Directive.
▼
M1
Article 25a
1. Member States shall provide at least that:
(a) any person authorized within the meaning of Directive 84/
253/EEC(1), performing in an investment firm the task described
in Article 51 of Directive 78/660/EEC(2), Article 37 of Directive
83/349/EEC or Article 31 of Directive 85/611/EEC or any otherstatutorytask,shallhaveadutytoreportpromptlytothecompetentauthorities any fact or decision concerning that undertaking ofwhich he has become aware while carrying out that task which isliable to:
— constituteamaterialbreachofthelaws,regulationsoradminis-
trative provisions which lay down the conditions governingauthorizationorwhichspecificallygovernpursuitoftheactivi-ties of investment firms, or
— affect the continuous functioning of the investment firm, or— lead to refusal to certify the accounts or to the expression of
reservations;
(b) that person shall likewise have a duty to report any facts and
decisionsofwhichhebecomesawareinthecourseofcarryingouta task as described in (a) in an undertaking having close linksresultingfromacontrolrelationshipwiththeinvestmentfirmwithinwhich he is carrying out the abovementioned task.
2. The disclosure in good faith to the competent authorities, by
personsauthorizedwithinthemeaningofDirective84/253/EEC,ofanyfactordecisionreferredtoinparagraph1shallnotconstituteabreachof any restriction on disclosure of information imposed by contract ofby any legislative, regulatory or administrative provision and shall notinvolce such persons in liability of any kind.
▼
B
Article 26
MemberStatesshallensurethatdecisionstakeninrespectofaninvest-
mentfirmunderlaws,regulationsandadministrativeprovisionsadoptedinaccordancewiththisDirectivearesubjecttotherighttoapplytothe
(1) OJ No L126, 12. 5. 1984, p. 20.
(2) OJ No L222, 14. 8. 1978, p. 11. Directive as last amended by Directive
90/605/EEC (OJ No L317, 16. 11. 1990, p. 60).
1993L0022 — EN — 07.08.1995 — 001.001 — 28
▼B
courts; the same shall apply where no decision is taken within six
months of its submission in respect of an application for authorizationwhich provides all the information required under the provisions inforce.
Article 27
Withoutprejudicetotheproceduresforthewithdrawalofauthorization
or to the provisions of criminal law, Member States shall provide thattheir respective competent authorities may, with regard to investmentfirms or those who effectively control the business of such firms thatinfringe laws, regulations or administrative provisions concerning thesupervisionorcarryingonoftheiractivities,adoptorimposeinrespectof them measures or penalties aimed specifically at ending observedbreaches or the causes of such breaches.
Article 28
Member States shall ensure that this Directive is implemented without
discrimination.
TITLE VII
Final provisions
Article 29
Pending the adoption of a further Directive laying down provisions
adapting this Directive to technical progress in the areas specifiedbelow, the Council shall, in accordance with Decision 87/373/EEC(
1),20acting by a qualified majority on a proposal from the
Commission, adopt any adaptations which may be necessary, asfollows:
— expansion of the list in Section C of the Annex,
— adaptation of the terminology of the lists in the Annex to take
account of developments on financial markets,
— the areas in which the competent authorities must exchange infor-
mation as listed in Article 23;
— clarificationofthedefinitionsinordertoensureuniformapplication
of this Directive in the Community,
— clarificationofthedefinitionsinordertotakeaccountintheimple-
mentation of this Directive of developments on financial markets,
— the alignment of terminology and the framing of definitions in
accordance with subsequent measures on investment firms andrelated matters,
— the other tasks provided for in Article 7 (5).
Article 30
1. InvestmentfirmsalreadyauthorizedintheirhomeMemberStates
to provide investment services before 31 December 1995 shall bedeemedtobesoauthorizedforthepurposeofthisDirective,ifthelawsofthoseMemberStatesprovidethattotakeupsuchactivitiestheymustcomply with conditions equivalent to those imposed in Articles 3 (3)and 4.
2. Investment firms which are already carrying on business on 31
December 1995 and are not included among those referred to in para-graph 1may continue their activities profided that, no later than 31December 1996 and pursuant to the provisions of their home MemberStates, they obtain authorization to continue such activities in accord-ance with the provisions adopted in implementation of this Directive.
(1) OJ No L197, 18. 7. 1987, p. 33.
1993L0022 — EN — 07.08.1995 — 001.001 — 29
▼B
Only the grant of such authorization shall enable such firms to qualifyundertheprovisionsofthisDirectiveontherightofestablishmentandthe freedom to provide services.
3. WherebeforethedateoftheadoptionofthisDirectiveinvestment
firmshavecommencedbusinessinotherMemberStateseitherthroughbranches or under the freedom to provide services, the authorities ofeachhomeMemberStateshall,between1Julyand31December1995,communicate,forthepurposesofArticles17(1)and(2)and18,totheauthorities of each of the other Member States concerned the list offirms that comply with this Directive and operate in those States,indicating the business carried on.
4. Natural persons authorized in a Member State on the date of the
adoptionofthisDirectivetoofferinvestmentservicesshallbedeemedto be authorized under this Directive, provided that they fulfil therequirements imposed in Article 1 (2), second subparagraph, secondindent, and third subparagraph, all four indents.
Article 31
No later than 1 July 1995 Member States shall adopt the laws, regula-
tions and administrative provisions necessary for them to comply withthis Directive.
Theseprovisionsshallenterintoforcenolaterthan31December1995.
The Member States shall forthwith inform the Commission thereof.
WhenMemberStatesadopttheprovisionsreferredtointhefirstpara-
graph they shall include a reference to this Directive or accompanythemwithsuchareferenceontheoccasionoftheirofficialpublication.Themannerinwhichsuchreferencesaretobemadeshallbelaiddownby the Member States.
Article 32
This Directive is addressed to the Member States.
1993L0022 — EN — 07.08.1995 — 001.001 — 30
▼B
ANNEX
SECTIONA
Services
1. (a) Reception and transmission, on behalf of investors, of orders in relation
to one or more of the instruments listed in Section B.
(b) Execution of such orders other than for own account.
2. Dealing in any of the instruments listed in Section B for own account.3.►
C2Managingportfoliosofinvestmentsinaccordancewithmandatesgiven
by investors on a discretionary, ◄client-by-client basis where such portfo-
lios include one or more of the instruments listed in Section B.
4. UnderwritinginrespectofissuesofanyoftheinstrumentslistedinSectionB
and/or the placing of such issues.
SECTIONB
Instruments
1. (a) Transferable securities.
(b) Units in collective investment undertakings.
2. Money-market instruments.3. Financial-futures contracts, including equivalent cash-settled instruments.4. Forward interest-rate agreements (FRAs).5. Interest-rate, currency and equity swaps.6. Optionstoacquireordisposeofanyinstrumentsfallingwithinthissectionof
the Annex, including equivalent cash-settled instruments. This categoryincludes in particular options on currency and on interest rates.
SECTIONC
Non-core services
1. Safekeepingandadministrationinrelationtooneormoreoftheinstruments
listed in Section B.
2. Safe custody services.3. Grantingcreditsorloanstoaninvestortoallowhimtocarryoutatransaction
inoneormoreoftheinstrumentslistedinSectionB,wherethefirmgrantingthe credit or loan is involved in the transaction.
4. Advice to undertakings on capital structure, industrial strategy and related
matters and advice and service relating to mergers and the purchase ofundertakings.
5. Services related to underwriting.6. InvestmentadviceconcerningoneormoreoftheinstrumentslistedinSection
B.
7. Foreign-exchange service where these are connected with the provision of
investment services.