1993L0022—EN—11.02.2003—004.001—1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILDIRECTIVE93/22/EEC
of10May1993
oninvestmentservicesinthesecurities field
(OJL141,11.6.1993,p.27)
Amendedby:
OfficialJournal
No page date
►M1EuropeanParliamentandCouncilDirective95/26/ECof29June1995 L168 7 18.7.1995
►M2Directive 97/9/EC of the European Parliament and of the Council of 3
March1997L84 22 26.3.1997
►M3Directive2000/64/ECoftheEuropeanParliamentandoftheCouncilof
7November2000L290 27 17.11.2000
►M4Directive2002/87/ECoftheEuropeanParliamentandoftheCouncilof
16December2002L35 1 11.2.2003
Correctedby:
►C1Corrigendum,OJL170,13.7.1993,p.32(93/22/EEC)
►C2Corrigendum,OJL194,3.8.1993,p.27(93/22/EEC)
▼B
COUNCILDIRECTIVE93/22/EEC
of10May1993
oninvestmentservicesinthesecurities field
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community,andinparticularArticle57(2)thereof,
HavingregardtotheproposalfromtheCommission(1),
IncooperationwiththeEuropeanParliament(2),
Having regard to the opinion of the Economic and Social
Committee(3),
Whereas this Directive constitutes an instrument essential to the
achievement oftheinternal market,acoursedetermined bytheSingleEuropeanActandsetoutintimetableformintheCommission'sWhitePaper,fromthepointofviewbothoftherightofestablishmentandof
the freedomto provide financial services, in the field of investm ent
firms;
Whereas firms that provide the investment services covered by this
Directive must be subject to authorization by their home MemberStates in order to protect investors and the stability of the financial
system;
Whereas the approach adopted is toeffect only the essential harmoni-
zation necessary and sufficient to secure the mutual recognition ofauthorization and of prudential supervision systems, making possiblethe grant of a single authorization valid throughout the Community
andtheapplicationoftheprincipleofhomeMemberStatesupervision;
whereas, by virtue of mutual recognition, investment firms authorizedin their 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 the
freedomtoprovideservices;
Whereas the principles of mutual recognition and of home Member
StatesupervisionrequirethattheMemberStates'competentauthoritiesshould not grant or should withdraw authorization where factors suchasthecontent ofprogrammes ofoperations,thegeographical distribu-
tion or the activities actually carried on indicate clearly that an
investment firm has opted for the legal system of one Member Statefor the purpose of evading the stricter standards in force in anotherMember State within the territory of which it intends to carry on ordoescarryonthegreaterpartofitsactivities;whereas,forthepurposesof this Directive, an investment firm which is a legal person must be
authorized in the Member State in which it has its registered office;
whereasaninvestmentfirmwhichisnotalegalpersonmustbeauthor-ized in the Member State in which it has its head office; whereas, inaddition, Member States must require that an investment firm's headoffice must always be situated in its home Member State and that it
actuallyoperatesthere;
Whereasitisnecessary,fortheprotectionofinvestors,toguaranteethe
internal supervision of every firm, either by means of two-manmanagement or, where that is not required by this Directive, by othermechanismsthatensureanequivalentresult;
Whereasinordertoguaranteefaircompetition,itmustbeensuredthat
investmentfirmsthatarenotcreditinstitutionshavethesamefreedomto create branches and provide services across frontiers asis providedfor by the Second Council Directive (89/646/EEC) of 15 December1989onthecoordinationoflaws,regulationsandadministrativeprovi-1993L0022—EN—11.02.2003—004.001—2
(1) OJNoC43,22.2.1989,p.7;andOJNoC42,22.2.1990,p.7.
(2) OJNoC304,4.12.1989,p.39;andOJNoC115,26.4.1993.
(3) OJNoC298,27.11.1989,p.6.
▼B
sions relating to the taking up and pursuit of the business of credit
institutions(1);
WhereasaninvestmentfirmshouldnotbeabletoinvokethisDirective
in order to carry out spot or forwardexchange transactions other than
as services connected with the provision or investment services;
whereas, therefore, the use of a branch solely for such foreign-exchange transactions would constitute misuse of the machinery ofthisDirective;
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 and
under its full and unconditional responsibility; whereas, in these
circumstances, such agents' business must be regarded as that of thefirm; whereas, moreover, this Directive does not prevent a homeMemberStatefrommakingthestatusofsuchagentssubjecttospecialrequirements;whereasshouldtheinvestmentfirmcarryoncross-border
business, the host Member State must treat those agents as being the
firmitself; whereas, m oreover, the door-to-door selling of transferablesecurities should not be covered by this Directive and the regulationthereofshouldremainamatterfornationalprovisions;
Whereas ‘transferable securities’ means those classes of securities
whicharenormallydealtinonthecapitalmarket,suchasgovernmentsecurities,sharesincompanies,negotiablesecuritiesgivingtherighttoacquire shares by subscription or exchange, depositary receipts, bonds
issuedaspartofaseries,indexwarrantsandsecuritiesgivingtheright
toacquiresuchbondsbysubscription;
Whereas ‘money-market instruments’ means those classes of instru-
ments which are normally dealt in on the money market such astreasurybills,certificatesofdepositandcommercialpaper;
Whereas the very wide definitions of transferable securities and
money-marketinstrumentsincludedinthisDirectivearevalidonlyforthisDirectiveandconsequentlyinnowayaffectthevariousdefinitionsof financial instruments usedinnational legislation forother purposes
such as taxation; whereas, furthermore, the definition of transferable
securities covers negotiable instruments only; whereas, consequently,shares and other securities equivalent to shares issued by bodies suchas building societies and industrial and provident societies, ownershipofwhichcannotinpracticebetransferredexceptbytheissuingbody'sbuyingthemback,arenotcoveredbythisdefinition;
Whereas‘instrumentequivalenttoafinancial-futurescontract’meansa
contract whichissettledbyapaymentincashcalculated byreference
tofluctuationsininterestorexchangerates,thevalueofanyinstrument
listedinSectionBoftheAnnexoranindexofanysuchinstruments;
Whereas, forthe purposesofthisDirective, thebusinessoftherecep-
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-
sions or, failing such, the national provisions regulating public offersoftheinstrumentscoveredbythisDirective;whereasthesameapplies
tothemarketinganddistributionofsuchinstruments;
Whereas Member States retain full responsibility for implementing
theirownmonetary-policymeasures,withoutprejudicetothemeasures
necessarytostrengthentheEuropeanMonetarySystem;
Whereasitisnecessarytoexcludeinsuranceundertakingstheactivities
of which are subject to appropriate monitoring by the competentprudential-supervision authorities and which are coordinated at1993L0022—EN—11.02.2003—004.001—3
(1) OJNoL386,30.12.1989,p.1.DirectiveaslastamendedbyDirective92/
30/EEC(OJNoL110,28.4.1992,p.52).
▼B
Community level andundertakings carrying outreinsurance andretro-
cessionactivities;
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 other
subsidiariesoftheirparentundertakingsshouldnotbecoveredbythis
Directive;
Whereas the purpose of this Directive is to cover undertakings the
normal business of which is to provide third parties with investment
servicesonaprofessionalbasis;whereasitsscopeshouldnotthereforecover anypersonwitha different professionalactivity (e.g.abarristeror solicitor) who provides investment services only on an incidentalbasis in the course of that other professional activity, provided that
that activity is regulated and the relevant rules do not prohibit the
provision, onan incidental basis, ofinvestment services; whereas it isalso necessary for the same reason to exclude from the scope of thisDirective persons who provide investment services only for producersor users of commodities to the extent necessary for transactions insuchproductswheresuchtransactionsconstitutetheirmainbusiness;
Whereas firms which provide investment services consisting exclu-
sively in the administration of employee-participation schemes andwhich therefore do not provide investment services for third parties
shouldnotbecoveredbythisDirective;
Whereas it is necessary to exclude fromthe scope of this Directive
central banksandotherbodiesperformingsimilarfunctionsaswellas
public bodies charged with or intervening in the management of thepublic debt, which concept covers the investment thereof; whereas, inparticular, this exclusion does not cover bodies that are partly orwholly State-owned the role of which is commercial or linked to theacquisitionofholdings;
WhereasitisnecessarytoexcludefromthescopeofthisDirectiveany
firms or persons whose business consists only of receiving and trans-mitting orders to certain counterparties and who do not hold funds or
securities belonging to their clients; whereas, therefore, they will not
enjoytherightofestablishmentandfreedomtoprovideservicesunderthe conditions laid down in this Directive, being subject, when theywish to operate in another Member State, to the relevant provisionsadoptedbythatState;
Whereas it is necessary to exclude fromthe 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 their
activities;
Whereas, where associations created by a Member State's pension
funds to permit the management of their assets confine themselves to
such management and do not provide investment services for thirdparties, and where the pension funds are themselves subject to thecontrol ofthe authorities charged with monitoring insurance undertak-ings,itdoesnotappeartobenecessarytosubjectsuchassociationsto
theconditionsfortakingupbusinessandforoperationimposedbythis
Directive;
Whereas this Directive should not apply to ‘agenti di cambio’ as
definedbyItalianlawsincetheybelongtoacategorytheauthorization
of which is not to be renewed, their activities are confined to thenational territory and they do not give rise to a risk of the distortionofcompetition;
WhereastherightsconferredoninvestmentfirmsbythisDirectiveare
without prejudice to the right of Member States, central banks andother national bodies performing similar functions to choose theircounterpartiesonthebasisofobjective,non-discriminatorycriteria;
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 March1993L0022—EN—11.02.2003—004.001—4
▼B
1993 on the capital adequacy of investment firms and credit institu-
tions(1),whichcoordinatestherulesapplicabletomarketrisk;
Whereas a home Member State may, asa general rule, establish rules
stricter than those laid down in this Directive, in particular as regardsauthorization conditions, prudential requirements and the rules ofreportingandtransparency;
Whereas the carrying on of activities not covered by this Directive is
governedbythegeneralprovisionsoftheTreatyontherightofestab-lishmentandthefreedomtoprovideservices;
Whereasinordertoprotectinvestorsaninvestor'sownershipandother
similarrightsinrespectofsecuritiesandhisrightsinrespectoffundsentrusted to a firmshould in particular be protected by being kept
distinct fromthose of the firm ; whereas this principle does not,
however,preventafirmfromdoingbusinessinitsnamebutonbehalfoftheinvestor,wherethatisrequiredbytheverynatureofthetransac-tionandtheinvestorisinagreement,forexamplestocklending;
Whereastheproceduresfortheauthorizationofbranchesofinvestment
firmsauthorizedinthirdcountrieswillcontinuetoapplytosuchfirms;whereasthosebrancheswillnotenjoythefreedomtoprovideservicesunderthesecondparagraph ofArticle 59oftheTreaty ortherightofestablishment in Member States other than those in which they are
established; 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 thethirdcountriesinquestion;
Whereastheauthorizations grantedtoinvestment firmsbythecompe-
tent national authorities pursuant to this Directive will haveCommunity-wide, and no longer merely nationwide application, and
existing reciprocity clauses will henceforth have no effect; whereas a
flexible procedure is therefore needed to make it possible to assessreciprocity on a Community basis; whereas the aim of this procedureis not to close the Community's financial markets but rather, as theCommunity intends to keep its financial markets open to the rest oftheworld,toimprovetheliberalization oftheglobalfinancialmarkets
in third countries; whereas, to that end, this Directive provides for
procedures for negotiating with third countries and, as a last resort,forthepossibilityoftakingmeasuresinvolvingthesuspensionofnewapplicationsforauthorizationandtherestrictionofnewauthorizations;
WhereasoneoftheobjectivesofthisDirective istoprotect investors;
whereas it is therefore appropriate to take account of the differentrequirements for protection of various categories of investors and oftheirlevelsofprofessionalexpertise;
WhereastheMemberStatesmustensurethattherearenoobstaclesto
preventactivitiesthatreceivemutualrecognitionfrombeingcarriedoninthe samemanner asinthe home MemberState, aslongastheydonot conflict with laws and regulations protecting the general good in
forceinthehostMemberState;
WhereasaMemberStatemaynotlimittherightofinvestorshabitually
residentorestablishedinthatMemberStatetoavailthemselvesofany
investment service provided by an investment firm covered by this
Directive situated outside that Member State and acting outwith thatMemberState;
Whereas in certain Member States clearing and settlement functions
maybeperformedbybodiesseparatefromthemarketsonwhichtrans-actions are effected; whereas, accordingly, any reference in thisDirective toaccesstoandmembershipofregulatedmarketsshouldberead as including references to access to and membership of bodiesperformingclearingandsettlementfunctionsforregulatedmarkets;1993L0022—EN—11.02.2003—004.001—5
(1) Seepage1ofthisOfficialJournal.
▼B
WhereaseachMemberStatemustensurethatwithinitsterritory,treat-
ment of all investment firms authorized in any Member State andlikewise all financial instruments listed on the Member States' regu-
lated markets is non-discriminatory; whereas investment firms must
allhavethesameopportunitiesofjoiningorhavingaccesstoregulatedmarkets;whereas,regardlessofthemannerinwhichtransactionsareatpresent organized in the Member States, it is therefore important,subjecttotheconditionsimposedbythisDirective,toabolishthetech-
nical and legal restrictions on access to the regulated markets within
theframeworkofthisDirective;
Whereas some Member States authorize credit institutions to become
members of their regulated markets only indirectly, by setting up
specialized subsidiaries; whereas the opportunity which this Directive
gives credit institutions of becoming members of regulated marketsdirectly without having to set up specialized subsidiaries constitutes asignificant reformfor those Mem ber States and all its consequencesshould be reassessed in the light of the development of the financial
markets; whereas, in view of those factors, the report which the
CommissionwillsubmittotheCouncilonthismatternolaterthan31December 1998 will have to take account of all the factors necessaryfor the Council to be able to reassess the consequences for thoseMember States, and in particular the danger of conflicts of interestandthelevelofprotectionaffordedtoinvestors;
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 Directive
harmonizingcompensationsystemsisbroughtintoeffect,hostMember
Stateswillbeabletoimposeapplicationoftheircompensationsystemson 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 theliberalizationofaccesstotheregulatedmarketsofhostMemberStates
for investment firms authorized to provide the services concerned in
their home Member States; whereas, pursuant to that principle, thelaw of the Federal Republic of Germany and the law of the Nether-lands govern the activities Kursmaklerandhoekmannenrespectively
so as to ensure that they do not exercise their functions in parallelwith other functions; whereas it should be noted that Kursmaklerand
hoekmannenmaynotprovideservicesinotherMemberStates;whereas
noone,whateverhishomeMemberState,mayclaimtoactasa Kurs-
makleror ahoekmanwithout being subject to the same rules on
incompatibilityasresultfromthestatusof Kursmaklerorhoekman;
Whereas it should be noted that this Directive cannot affect the
measurestakenpursuanttoCouncilDirective 79/279/EEC of5March1979coordinatingtheconditionsfortheadmissionofsecuritiestooffi-cialstock-exchangelisting(
1);
Whereas the stability and soundoperation of the financial systemand
theprotectionofinvestorspresupposethatahostMemberStatehastheright and responsibility both to prevent and to penalize any actionwithinitsterritorybyinvestmentfirmscontrarytotherulesofconduct
andotherlegalorregulatoryprovisionsithasadoptedintheinterestof
thegeneralgoodandtotakeactioninemergencies;whereas,moreover,the competent authorities of the host Member State must, in dischar-ging their responsibilities, be able to count on the closest cooperationwiththecompetent authoritiesofthehomeMemberState,particularlyas regards business carried on under the freedomto provide services;
whereas the competent authorities of the home Member State are
entitled to be informed by the competent authorities of the hostMember State of any measures involving penalties on an investment1993L0022—EN—11.02.2003—004.001—6
(1) OJNoL66,16.3.1979,p.21.DirectivelastamendedbytheActofAcces-
sionofSpainandPortugal.
▼B
firmorrestrictionsonitsactivitieswhichthelatterhavetaken vis-à-vis
theinvestmentfirmswhichtheformerhaveauthorizedsoastobeabletoperformtheirfunctionofprudentialsupervisionefficiently; whereas
tothatendcooperationbetweenthecompetentauthoritiesofhomeand
hostMemberStatesmustbeensured;
Whereas, with the two-fold aimof protecting investors and ensuring
the smooth operation of the markets in transferable securities, it is
necessary to ensure that transparency of transactions is achieved andthattheruleslaiddownforthatpurposeinthisDirectiveforregulatedmarketsapplybothtoinvestment firmsandtocreditinstitutionswhentheyoperateonthemarket;
Whereas examination of the problems arising in the areas covered by
theCouncilDirectivesoninvestmentservicesandsecurities,asregardsboth the application of existing measures and the possibility of closercoordinationinthefuture,requirescooperationbetweennationalautho-
rities and the Commission within a committee; whereas the
establishment of such a committee does not rule out other forms ofcooperationbetweensupervisoryauthoritiesinthisfield;
Whereas technical amendments to the detailed rules laid down in this
Directive may from time totime benecessary totake account ofnewdevelopments in the investment-services sector; whereas the Commis-sion will make such amendments as are necessary, after referring themattertothecommitteetobesetupinthesecurities-marketsfield,
HASADOPTEDTHISDIRECTIVE:
TITLEI
Definitionsandscope
Article 1
ForthepurposesofthisDirective:
1.investment service shallmeananyoftheserviceslistedinSection
AoftheAnnexrelatingtoanyoftheinstrumentslistedinSectionBoftheAnnexthatareprovidedforathirdparty;
2.investment firm shallmeananylegalpersontheregularoccupation
or business of which is the provision of investment services forthirdpartiesonaprofessionalbasis.
Forthe purposesof this Directive, Member States may include as
investmentfirmsundertakingswhicharenotlegalpersonsif:
— their legal status ensures a level of protection forthird parties'
interestsequivalenttothataffordedbylegalpersons,and
— theyaresubjecttoequivalentprudentialsupervisionappropriate
totheirlegalform.
However, where such natural persons provide services involving
the holding of third parties' funds or transferable securities, they
may be considered as investment firms for the purposes of this
Directive only if, without prejudice to the other requirementsimposedinthisDirective andinDirective 93/6/EEC, theycomplywiththefollowingconditions:
— the ownership rights of third parties in instruments and funds
belongingtothemmustbesafeguarded,especiallyintheeventoftheinsolvencyofafirmorofitsproprietors,seizure,set-off
oranyotheractionbycreditorsofthefirmorofitsproprietors,
— aninvestmentfirmmustbesubjecttorulesdesignedtomonitor
thefirm'ssolvencyandthatofitsproprietors,
— aninvestmentfirm'sannualaccountsmustbeauditedbyoneor
more persons empowered, under national law, to auditaccounts,
— where a firm hasonly one proprietor, he must make provision
forthe protection of investors in the event of the firm's cessa-1993L0022—EN—11.02.2003—004.001—7
▼B
tionofbusinessfollowinghisdeath,hisincapacityoranyother
suchevent.
No later than 31 December 1997 the Commission shall report on
theapplication ofthesecondandthirdsubparagraphsofthispointand,ifappropriate,proposetheiramendmentordeletion.
WhereapersonprovidesoneoftheservicesreferredtoinSection
A(1)(a)oftheAnnexandwherethatactivityiscarriedonsolelyfor the account of and under the full and unconditional responsi-
bility of an investment firm, that activity shall be regarded as the
activitynotofthatpersonbutoftheinvestmentfirmitself;
3.credit institution shall mean a credit institution as defined in the
first indent of Article 1 of Directive 77/780/EEC(
1) with the
exceptionoftheinstitutionsreferredtoinArticle2(2)thereof;
4.transferable securities shallmean:
— sharesincompaniesandothersecuritiesequivalenttosharesin
companies,
— bondsandotherformsofsecuritizeddebt
whicharenegotiableonthecapitalmarketand— anyothersecuritiesnormallydealtingivingtherighttoacquire
anysuchtransferable securities bysubscriptionorexchange orgivingrisetoacashsettlement
excludinginstrumentsofpayment;
5.money-market instruments shall mean those classes of instruments
whicharenormallydealtinonthemoneymarket;
6.home Member State shallmean:
(a) where the investment firm is a natural person, the Member
Stateinwhichhisheadofficeissituated;
(b) wheretheinvestmentfirmisalegalperson,theMemberState
inwhichitsregisteredofficeissituatedor,ifunderitsnationallaw it has no registered office, the Member State in which itsheadofficeissituated;
(c) inthecase ofamarket, theMember State inwhichthe 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
investmentfirmhasabranchorprovidesservices;
8.branchshallmeanaplaceofbusinesswhichisapartofaninvest-
ment firm, which has no legal personality and which providesinvestment services for which the investment firm has been auto-
rized; all the places of business set up in the same Member State
byaninvestment firm withheadquarters inanother Member Stateshallberegardedasasinglebranch;
9.competent authorities shall mean the authorities which each
MemberStatedesignatesunderArticle22;
10.qualifying holding shall mean any direct or indirect holding in an
investmentfirmwhichrepresents10%ormoreofthecapitalorof
the voting rights or which makes it possible to exercise a signifi-cant influence over the management of the investment firm inwhichthatholdingsubsists.
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)
shallbetakenintoaccount;1993L0022—EN—11.02.2003—004.001—8
(1) OJNoL322,17.12.1977,p.30.DirectivelastamendedbyDirective89/
646/EEC(OJNoL386,30.12.1989,p.1).
(2) OJNoL348,17.12.1988,p.62.
▼B
11.parent undertaking shall mean a parent undertaking as defined in
Articles1and2ofDirective83/349/EEC(1);
12.subsidiaryshall mean a subsidiaryundertaking asdefined inArti-
cles 1 and 2 of Directive 83/349/EEC; any subsidiary of a
subsidiary undertaking shall also be regarded as a subsidiary of
theparentundertakingwhichistheultimateparentofthoseunder-takings;
13.regulated market shallmeanamarketfortheinstrumentslistedin
SectionBoftheAnnexwhich:
— appears onthe list provided forin Article 16drawn upbythe
Member State which is the home Member State as defined inArticle1(6)(c),
— functionsregularly,
— ischaracterized bythefactthat regulations issuedorapproved
by the competent authorities define the conditions for theoperationofthemarket,theconditionsforaccesstothemarketand, where Directive 79/279/EEC is applicable, the conditionsgoverning admission to listing imposed in that Directive and,wherethatDirectiveisnotapplicable, theconditionsthatmust
be satisfied by a financial instrument before it can effectively
bedealtinonthemarket,
— requires compliance with all the reporting and transparency
requirementslaiddownpursuanttoArticles20and21;
14.controlshallmeancontrolasdefinedinArticle1ofDirective83/
349/EEC;
15.close linksshallmeanasituationinwhichtwoormorenaturalor
legalpersonsarelinkedby:
(a)participation, which shall mean the ownership, direct or by
wayofcontrol,of20%ormoreofthevotingrightsorcapital
ofanundertakingor
(b)control, which shall mean the relationship between a parent
undertaking and a subsidiary, in all the cases referred to inArticle 1 (1)and (2)of Directive 83/349/EEC(
2),or a similar
relationshipbetweenanynaturalorlegalpersonandanunder-taking; anysubsidiary undertaking ofa subsidiary undertakingshallalsobeconsideredasubsidiaryoftheparentundertaking
whichisattheheadofthoseundertakings.
A situation in which two or more natural or legal persons are
permanently linked to one and the same person by a control rela-
tionshipshallalsoberegardedasconstitutingacloselinkbetweensuchpersons.
Article 2
1. ThisDirectiveshallapplytoallinvestmentfirms.Onlyparagraph
4of 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 the
authorizationofwhich,underDirectives77/780/EECand89/646/EEC,
coversoneormoreoftheinvestmentserviceslistedinSectionAoftheAnnextothisDirective.1993L0022—EN—11.02.2003—004.001—9
(1) OJNoL193,18.7.1983,p.1.DirectivelastamendedbyDirective90/605/
EEC(OJNoL317,16.11.1990,p.60).
(2) OJNoL193,18.7.1983,p.1.DirectiveaslastamendedbyDirective90/
605/EEC(OJNoL317,16.11.1990,p.60).▼M1
▼B
▼B
2. ThisDirectiveshallnotapplyto:
(a) insuranceundertakingsasdefinedinArticle1ofDirective73/239/
EEC(1) or Article 1 of Directive 79/267/EEC(2) or undertakings
carrying on the reinsurance and retrocession activities referred toinDirective64/225/EEC(
3);
(b) firms which provide investment services exclusively for their
parent undertakings, for their subsidiaries or for other subsidiariesoftheirparentundertakings;
(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 not
excludetheprovisionofthatservice;
(d) firmsthatprovideinvestmentservicesconsistingexclusivelyinthe
administrationofemployee-participation schemes;
(e) firms that provide investment services that consist in providing
boththeservicesreferredtoin(b)andthosereferredtoin(d);
(f) the central banks of Member States and other national bodies
performing similar functions andother public bodies charged withorinterveninginthemanagementofthepublicdebt;
(g) firms
— which may not hold clients' funds or securities and which for
thatreasonmaynotatanytimeplacethemselvesindebitwiththeirclients,and
— which may not provide any investment service except the
reception and transmission of orders in transferable securities
andunitsincollectiveinvestmentundertakings,and
— which in the course of providing that service may transmit
ordersonlyto
(i) investmentfirmsauthorizedinaccordancewiththisDirec-
tive;
(ii) creditinstitutionsauthorizedinaccordancewithDirectives
77/780/EECand89/646/EEC;
(iii) branchesofinvestmentfirmsorofcreditinstitutionswhich
are authorized in a third country and which are subject toandcomplywithprudentialrulesconsideredbythecompe-tentauthoritiesasatleastasstringentasthoselaiddowninthisDirective,inDirective89/646/EECorinDirective93/
6/EEC;
(iv) collective investment undertakings authorized under the
law of a Member State to market units to the public andtothemanagersofsuchundertakings;
(v) investment companies with fixed capital, as defined in
Article 15(4)ofDirective 77/91/EEC(
4),the securities of
which are listed or dealt in on a regulated market in a
MemberState;
— theactivitiesofwhicharegovernedatnationallevelbyrulesor
byacodeofethics;
(h) collectiveinvestmentundertakingswhethercoordinatedatCommu-
nity level or not and the depositaries and managers of suchundertakings;
(i) persons whose main business is trading in commodities amongst
themselvesorwithproducersorprofessionalusersofsuchproducts1993L0022—EN—11.02.2003—004.001—10
(1) OJNoL228,16.8.1973,p.3.DirectivelastamendedbyDirective90/619/
EEC(OJNoL330,29.11.1990,p.50).
(2) OJNoL63,13.3.1979,p.1.DirectivelastamendedbyDirective90/618/
EEC(OJNoL330,29.11.1990,p.44).
(3) OJNo56,4.4.1964,p.878/64.
(4) OJNoL26,30.1.1977,p.1.DirectivelastamendedbytheActofAcces-
sionofSpainandPortugal.
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and who provide investment services only for such producers and
professionaluserstotheextentnecessaryfortheirmainbusiness;
(j) firms that provide investment services consisting exclusively in
dealing for their own account on financial-futures or options
markets orwhichdeal fortheaccounts ofothermembersofthosemarkets or make prices for them and which are guaranteed byclearingmembersofthesamemarkets.Responsibilityforensuringthe performance of contracts entered into by such firms must be
assumedbyclearingmembersofthesamemarkets;
(k) associations set up by Danish pension funds with the sole aimof
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 subsequent
provisions amending it, and who are authorized to carry on their
activitiesunderArticle19ofItalianLawNo1of2January1991.
3. No later than 31 December 1998 and at regular intervals there-
aftertheCommissionshallreportontheapplication ofparagraph2in
conjunctionwithSectionAoftheAnnexandshall,whereappropriate,propose amendments to the definition of the exclusions and theservicescoveredinthelightoftheoperationofthisDirective.
4. The rights conferred by this Directive shall not extend to the
provision of services as counterparty to the State, the central bank orother Member State national bodies performing similar functions in
the pursuit of the monetary, exchange-rate, public-debt and reserves
managementpoliciesoftheMemberStateconcerned.
TITLEII
Conditionsfortakingupbusiness
Article 3
1. Each Member State shall make access to the business of invest-
mentfirmssubjecttoauthorization forinvestmentfirmsofwhichitisthe home Member State. Such authorization shall be granted by thehome Member State's competent authorities designated in accordancewithArticle22.Theauthorizationshallspecifytheinvestmentservices
referredtoinSectionAoftheAnnexwhichtheundertakingisauthor-
ized to provide. The authorization may also cover one or more of thenon-coreservicesreferredtoinSectionCoftheAnnex.Authorizationwithin the meaning of this Directive may in no case be granted forservicescoveredonlybySectionCoftheAnnex.
2. EachMemberStateshallrequirethat:
— any investment firm which is a legal person and which, under its
national law, has a registered office shall have its head office in
thesameMemberStateasitsregisteredoffice,
— anyotherinvestmentfirmshallhaveitsheadofficeintheMember
Statewhichissueditsauthorizationandinwhichitactuallycarriesonitsbusiness.
3. Without prejudice to other conditions of general application laid
downbynationallaw,thecompetentauthoritiesshallnotgrantauthor-
izationunless:
— an investment firm has sufficient initial capital in accordance with
the rules laid down in Directive 93/6/EEC having regard to thenatureoftheinvestmentserviceinquestion,
— the persons who effectively direct the business of an investment
firmare of sufficiently good repute and are sufficiently experi-enced.
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,particularly in the cases provided for in the last indent of the thirdsubparagraph of Article 1 (2), the competent authorities may grant1993L0022—EN—11.02.2003—004.001—11
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authorization to investment firms which are natural persons or, taking
accountofthenatureandvolumeoftheiractivities,toinvestmentfirmswhich are legal persons where such firms are managed by single
natural persons in accordance with their articles of association and
nationallaws.
Moreover, where close links exist between the investment firm and
other natural or legal persons, the competent authorities shall grantauthorization only if those links do not prevent the effective exerciseoftheirsupervisoryfunctions.
The competent authorities shall also refuse authorization if the laws,
regulations or administrative provisions of a non-member countrygoverning oneormore natural orlegal personswithwhich theunder-taking has close links, or difficulties involved in their enforcement,preventtheeffectiveexerciseoftheirsupervisoryfunctions.
The competent authorities shall require investment firms to provide
them with the information they require to monitor compliance withtheconditionsreferredtointhisparagraphonacontinuousbasis.
4. Member States shall also require that every application for
authorization be accompanied by a programme of operations settingoutinter aliathe types of business envisaged and the organizational
structureoftheinvestmentfirmconcerned.
5. Anapplicant shallbeinformedwithinsixmonthsofthesubmis-
sion of a complete application whether or not authorization has beengranted.Reasonsshallbegivenwheneveranauthorizationisrefused.
6. An investment firm may commence business as soon as authori-
zationhasbeengranted.
7. Thecompetent authoritiesmaywithdrawtheauthorization issued
toaninvestment firmsubject tothisDirective onlywherethat invest-
mentfirm:
(a) doesnotmakeuseoftheauthorizationwithin12months,expressly
renounces the authorization or ceased to provide investmentservicesmorethansixmonthspreviouslyunlesstheMemberState
concernedhasprovidedforauthorizationtolapseinsuchcases;
(b) has obtained the authorization by making false statements or by
anyotherirregularmeans;
(c) no longer fulfils the conditions under which authorization was
granted;
(d) nolongercomplieswithDirective93/6/EEC;
(e) has seriously and systematically infringed the provisions adopted
pursuanttoArticles10or11;or
(f) fallswithinanyofthecaseswherenationallawprovidesforwith-
drawal.
Article 4
The competent authorities shall not grant authorization to take up the
businessofinvestmentfirmsuntiltheyhavebeeninformedoftheiden-titiesoftheshareholdersormembers,whetherdirectorindirect,naturalor legal persons, that have qualifying holdings and of the amounts of
thoseholdings.
The competent authorities shall refuse authorization if, taking into
account the need to ensure the sound and prudent management of aninvestmentfirm,theyarenotsatisfiedastothesuitabilityoftheafore-mentionedshareholdersormembers.
Article 5
Inthecaseofbranchesofinvestmentfirmsthathaveregisteredoffices
outwith the Community and are commencing or carrying on business,the Member States shall not apply provisions that result in treatment1993L0022—EN—11.02.2003—004.001—12
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more favourable than that accorded to branches of investment firms
thathaveregisteredofficesinMemberStates.
Article 6
ThecompetentauthoritiesoftheotherMemberStateinvolvedshallbe
consulted beforehand on the authorization of any investment firm
whichis:
— asubsidiaryofaninvestmentfirmorcreditinstitutionauthorizedin
anotherMemberState,
— a subsidiary of the parent undertaking of an investment firm or
creditinstitutionauthorizedinanotherMemberState,
or
— controlledbythesamenaturalorlegalpersonsascontrolaninvest-
mentfirmorcreditinstitutionauthorizedinanotherMemberState.
The competent authority of a Member State involved, responsible for
the supervision of credit institutions or insurance undertakings, shallbeconsultedpriortothegrantingofanauthorisation toaninvestmentfirmwhichis:
(a) a subsidiary of a credit institution or insurance undertaking
authorisedintheCommunity;or
(b) a subsidiary of the parent undertaking of a credit institution or
insuranceundertakingauthorisedintheCommunity;or
(c) controlled by the same person, whether natural or legal, who
controls a credit institution or insurance undertaking authorised intheCommunity.
The relevant competent authorities referred to in the first and second
paragraphs shall in particular consult each other when assessing the
suitability of the shareholders and the reputation and experience of
directors involved in the management of another entity of the samegroup. They shall informeach other of any inform ation regarding thesuitability of shareholders and the reputation and experience of direc-tors which is of relevance to the other competent authorities involvedfor the granting of an authorisation as well as for the ongoing assess-
mentofcompliancewithoperatingconditions.
TITLEIII
Relationswiththirdcountries
Article 7
1. Thecompetent authorities oftheMemberStatesshallinformthe
Commission:
(a) of the authorization of any firmwhich 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 its
subsidiary.
InbothcasestheCommissionshallinformtheCounciluntilsuchtime
asacommitteeontransferablesecuritiesissetupbytheCouncilactingonaproposalfromtheCommission.
When authorization is granted to any firmwhich is the direct or
indirect subsidiary of a parent undertaking governed by the law of a
third country, the competent authorities shall specify the structure ofthegroupinthenotificationwhichtheyaddresstotheCommission.
2. The Member States shall inform the Commission of any general
difficulties which their investment firms encounter in establishingthemselvesorprovidinginvestmentservicesinanythirdcountry.1993L0022—EN—11.02.2003—004.001—13
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3. Initially nolaterthansixmonthsbeforethisDirective isbrought
intoeffectandthereafter periodically theCommissionshalldrawupareport examining the treatment accorded to Community investment
firms in third countries, in the terms referred to in paragraphs 4 and
5, as regards establishment, the carrying on of investment servicesactivities and the acquisition of holdings in third-country investmentfirms. The Commission shall submit those reports to the Counciltogetherwithanyappropriateproposals.
4. WheneveritappearstotheCommission,eitheronthebasisofthe
reports provided for in paragraph 3 or on the basis of other informa-
tion, that a third country does not grant Community investment firmseffective market access comparable tothat granted bythe Communityto investment firms from that third country, the Commission maysubmitproposalstotheCouncilforanappropriatemandatefornegotia-tionwithaviewtoobtainingcomparablecompetitiveopportunitiesfor
Community investment firms. The Council shall act by a qualified
majority.
5. WheneveritappearstotheCommission,eitheronthebasisofthe
reportsreferredtoinparagraph3oronthebasisofotherinformation,that Community investment firms in a third country are not grantednational treatment affording the same competitive opportunities as areavailabletodomesticinvestmentfirmsandthattheconditionsofeffec-
tive market access are not fulfilled, the Commission may initiate
negotiationsinordertoremedythesituation.
Inthecircumstancesdescribedinthefirstsubparagraphitmayalsobe
decided,atanytimeandinadditiontotheinitiationofnegotiations,inaccordance with the procedure to be laid down in the Directive bywhich the Council will set up the committee referred to in paragraph1, that the competent authorities of the Member States must limit or
suspend their decisions regarding requests pending or future requests
for authorization and the acquisition of holdings by direct or indirectparent undertakings governed bythe law of the third country in ques-tion.Thedurationofsuchmeasuresmaynotexceedthreemonths.
Beforetheendofthatthree-monthperiodandinthelightoftheresults
of the negotiations the Council may, acting on a proposal from theCommission,decidebyaqualifiedmajoritywhetherthemeasuresshall
becontinued.
Suchlimitationsorsuspensionsmaynotbeappliedtothesettingupof
subsidiaries byinvestment firmsdulyauthorized intheCommunity orby their subsidiaries, or to the acquisition of holdings in Communityinvestmentfirmsbysuchfirmsorsubsidiaries.
6. WheneveritappearstotheCommissionthatoneofthesituations
described in paragraphs 4 and 5 obtains, the Member States shallinformitatitsrequest:
(a) of any application for the authorization of any firmwhich is the
direct or indirect subsidiary of a parent undertaking governed by
thelawofthethirdcountryinquestion;
(b) whenever they are informed in accordance with Article 10 that
such a parent undertaking proposes to acquire a holding in aCommunity investment firm such that the latter would become its
subsidiary.
Thisobligationtoprovideinformationshalllapsewheneveragreement
is reached with the third country referred to in paragraph 4 or 5 or
when the measures referred to in the second and third subparagraphsofparagraph5ceasetoapply.
7. MeasurestakenunderthisArticleshallcomplywiththeCommu-
nity's obligations under any international agreements, bilateral ormultilateral, governing the taking up or pursuit of the business ofinvestmentfirms.1993L0022—EN—11.02.2003—004.001—14
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TITLEIV
Operatingconditions
Article 8
1. The competent authorities of the home Member States shall
require that an investment firmwhich theyhave authorized comply at
alltimeswiththeconditionsimposedinArticle3(3).
2. The competent authorities of the home Member State shall
require that an investment firm which they have authorized complywiththeruleslaiddowninDirective93/6/EEC.
3. The prudential supervision of an investment firm shall be the
responsibility of the competent authorities of the home Member Statewhether the investment firm establishes a branch or provides servicesin another Member State or not, without prejudice to those provisions
ofthisDirectivewhichgiveresponsibilitytotheauthoritiesofthehost
MemberState.
Article 9
1. MemberStatesshallrequireanypersonwhoproposestoacquire,
directlyorindirectly,aqualifyingholdinginaninvestmentfirmfirsttoinformthe com petent authorities, telling themof the size of hisintended holding. Such a person shall likewise informthe com petentauthoritiesifheproposestoincreasehisqualifyingholdingsothattheproportion of the voting rights or of the capital that he holds would
reachorexceed 20,33,or50%orsothattheinvestment firmwould
becomehissubsidiary.
Withoutprejudicetoparagraph2,thecompetent authoritiesshallhave
uptothreemonthsfromthedateofthenotificationprovidedforinthe
first subparagraph to oppose such a plan if, in view of the need to
ensure sound and prudent management of the investment firm, theyarenotsatisfiedastothesuitabilityofthepersonreferredtointhefirstsubparagraph. Iftheydonotopposetheplan,theymayfixadeadlineforitsimplementation.
2. If the acquirer of the holding referred to in paragraph 1 is an
investment firm, a credit institution or an insurance undertaking
authorised in another Member State, or the parent undertaking of aninvestment firm, credit institution or insurance undertaking authorisedin another Member State, or a natural or legal person controlling aninvestment firm, credit institution or insurance undertaking authorisedin another Member State, and if, as a result of that acquisition, the
undertakinginwhichtheacquirerproposestoacquireaholdingwould
becometheacquirer'ssubsidiaryorcomeunderhiscontrol,theassess-ment of the acquisition must be subject to the prior consultationprovidedforinArticle6.
3. MemberStatesshallrequireanypersonwhoproposestodispose,
directlyorindirectly,ofaqualifyingholdinginaninvestmentfirmfirst
to informthe com petent authorities, telling themof the size of his
holding.Suchapersonshalllikewiseinformthecompetentauthoritiesifheproposestoreducehisqualifyingholdingsothattheproportionofthevotingrightsorofthecapitalheldbyhimwouldfallbelow20,33or 50 % or so that the investment firm would cease to be hissubsidiary.
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 thethresholdsreferredtoinparagraphs1and3.
Atleastonceayeartheyshallalsoinformthecompetentauthoritiesof
thenamesofshareholdersandmemberspossessingqualifyingholdingsandthesizesofsuchholdingsasshown,forexample,bytheinforma-tionreceivedatannualgeneral meetingsofshareholdersandmembers1993L0022—EN—11.02.2003—004.001—15
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orasaresultofcompliance withtheregulations applicable tocompa-
nieslistedonstockexchanges.
5. Member States shall require that, where the influence exercised
bythe persons referred to inparagraph 1islikely to be prejudicial to
thesoundandprudentmanagement ofaninvestmentfirm,thecompe-tent authorities take appropriate measures to put an end to thatsituation.Suchmeasuresmayconsist,forexample,ininjunctions,sanc-tions against directors and those responsible for management orsuspension of the exercise of the voting rights attaching to the shares
heldbytheshareholdersormembersinquestion.
Similarmeasuresshallapplytopersonsfailingtocomplywiththeobli-
gation to provide prior information imposed in paragraph 1. If aholdingisacquireddespitetheoppositionofthecompetentauthorities,the Member States shall, regardless of any other sanctions to beadopted, provide either forexercise ofthe corresponding voting rightsto be suspended,forthe nullity of the votes castor forthe possibility
oftheirannulment.
Article 10
1. Each home Member State shall draw up prudential rules which
investment firms shall observe at all times. In particular, such rulesshallrequirethateachinvestmentfirm:
— have sound administrative and accounting procedures, control and
safeguardarrangementsforelectronicdataprocessing,andadequate
internal control mechanisms including, in particular, rules for
personaltransactionsbyitsemployees,
— makeadequatearrangementsforinstrumentsbelongingtoinvestors
withaviewtosafeguardingthelatter'sownershiprights,especiallyin the event of the ►
C1investment firm's insolvency, and to
preventingtheinvestmentfirm'susinginvestors'instrumentsforitsownaccount ◄exceptwiththeinvestors'expressconsent,
— makeadequatearrangementsforfundsbelongingtoinvestorswitha
view to safeguarding the latter's rights and, except in the case ofcredit institutions, preventing the investment firm'susinginvestors'
fundsforitsownaccount,
— arrangeforrecordstobekeptoftransactions executed whichshall
atleastbesufficienttoenablethehomeMemberState'sauthorities
to monitor compliance with the prudential rules which they areresponsibleforapplying;suchrecordsshallberetained forperiodstobelaiddownbythecompetentauthorities,
— be structured and organized in sucha way as tominimize the risk
ofclients'interestsbeingprejudicedbyconflictsofinterestbetweenthe firmand its clients or between one of its clients and another.Nevertheless, where a branch is set up the organizational arrange-
mentsmaynotconflict withtherulesofconductlaiddownbythe
hostMemberStatetocoverconflictsofinterest.
Article 11
1. Member States shall draw up rules of conduct which investment
firmsshallobserveatalltimes.Suchrulesmustimplementatleasttheprinciplessetoutinthefollowingindentsandmustbeappliedinsucha way as to take account of the professional nature of the person forwhomthe service is provided. The Mem ber States shall also apply
theseruleswhereappropriatetothenon-coreserviceslistedinSection
CoftheAnnex.Theseprinciplesshallensurethataninvestmentfirm:
— acts honestly and fairly in conducting its business activities in the
bestinterestsofitsclientsandtheintegrityofthemarket,
— acts with due skill, care and diligence, in the best interests of its
clientsandtheintegrityofthemarket,
— has and employs effectively the resources and procedures that are
necessaryfortheproperperformanceofitsbusinessactivities,
— seeks fromits clients inform ation regarding their financial situa-
tions, investment experience and objectives as regards the servicesrequested,1993L0022—EN—11.02.2003—004.001—16
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— makes adequate disclosure of relevant material information in its
dealingswithitsclients,
— tries to avoid conflicts of interests and, when they cannot be
avoided,ensuresthatitsclientsarefairlytreated,and
— complieswithallregulatoryrequirementsapplicabletotheconduct
of its business activities so as to promote the best interests of itsclientsandtheintegrityofthemarket.
2. Without prejudice to any decisions to be taken in the context of
theharmonizationoftherulesofconduct,theirimplementationandthesupervisionofcompliancewiththemshallremaintheresponsibilityof
theMemberStateinwhichaserviceisprovided.
3. Where aninvestment firmexecutes anorder,forthepurposesof
applyingtherulesreferredtoinparagraph1theprofessionalnatureofthe investor shall be assessed with respect to the investor fromwhomtheorderoriginates,regardlessofwhethertheorderwasplaceddirectlyby the investor himself or indirectly through an investment firmprovidingtheservicereferredtoinSectionA(1)(a)oftheAnnex.
Article 13
This Directive shall not prevent investment firms authorized in other
Member States from advertising their services through all available
means of communication in their host Member States, subject to any
rules governing the formand the content of such advertising adoptedintheinterestofthegeneralgood.
TITLEV
Therightofestablishmentandthefreedomtoprovideservices
Article 14
1. MemberStatesshallensurethatinvestmentservicesandtheother
serviceslistedinSectionCoftheAnnexmaybeprovidedwithintheirterritories in accordance with Articles 17, 18 and 19 either by theestablishment ofabranchorunderthefreedomtoprovideservicesbyanyinvestmentfirmauthorizedandsupervisedbythecompetentautho-rities of another Member State in accordance with this Directive,
providedthatsuchservicesarecoveredbytheauthorization.
This Directive shall not affect the powers of host Member States in
respect of the units of collective investment undertakings to which
Directive85/611/EEC(
1)doesnotapply.
2. Member States may not make the establishment of a branch or
the provision of services referred to in paragraph 1 subject to anyauthorization requirement, to any requirement to provide endowmentcapitalortoanyothermeasurehavingequivalenteffect.
3. A Member State may require that transactions relating to the
services referred to in paragraph 1 must, where they satisfy all the
followingcriteria,becarriedoutonaregulatedmarket:
— the investor must be habitually resident or established in that
MemberState,
— theinvestmentfirmmustcarryoutsuchtransactionsthroughamain
establishment, through a branch situated in that Member State orunderthefreedomtoprovideservicesinthatMemberState,
— the transaction must involve a instrument dealt in on a regulated
marketinthatMemberState.
4. WhereaMemberStateappliesparagraph3itshallgiveinvestors
habituallyresidentorestablishedinthatMemberStatetherightnotto1993L0022—EN—11.02.2003—004.001—17
(1) OJ No L 375, 31. 12. 1985, p. 3. Directive last amended by Directive 88/
220/EEC(OJNoL100,19.4.1988,p.31).▼M2
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complywiththeobligationimposedinparagraph3andhavethetrans-
actions referred to in paragraph 3 carried out away froma regulatedmarket. Member States may make the exercise ofthis right subject to
expressauthorization,takingintoaccountinvestors'differingneedsfor
protection andinparticular theability ofprofessionalandinstitutionalinvestors to act in their own best interests. It must in any case bepossible for such authorization to be given in conditions that do notjeopardizethepromptexecutionofinvestors'orders.
5. The Commission shall report on the operation of paragraphs 3
and 4 not later than 31 December 1998 and shall, if appropriate,proposeamendmentsthereto.
Article 15
1. Withoutprejudicetotheexerciseoftherightofestablishmentor
thefreedomtoprovideservicesreferredtoinArticle14,hostMemberStates shall ensure that investment firms which are authorized by the
competent authorities of their home Member States to provide the
services referred to in Section A (1) (b) and (2) of the Annex can,eitherdirectly orindirectly, becomemembersoforhaveaccesstotheregulated markets in their host Member States where similar servicesare provided and also become members of or have access to theclearing and settlement systems which are provided for the members
ofsuchregulatedmarketsthere.
MemberStatesshallabolishanynationalrulesorlawsorrulesofregu-
lated markets which limit the number of persons allowed accessthereto. If, by virtue of its legal structure or its technical capacity,access to a regulated market is limited, the Member State concernedshallensurethatitsstructureandcapacityareregularlyadjusted.
2. Membership of or access to a regulated market shall be condi-
tional on investment firms' complying with capital adequacyrequirements and home Member States' supervising such complianceinaccordancewithDirective93/6/EEC.
Host Member States shall be entitled to impose additional capital
requirementsonlyinrespectofmattersnotcoveredbythatDirective.
Access to a regulated market, admission to membership thereof and
continued access or membership shall be subject to compliance withthe rules of the regulated market in relation to the constitution andadministrationoftheregulatedmarketandtocompliancewiththerulesrelating to transactions on the market, with the professional standardsimposedonstaffoperatingonandinconjunctionwiththemarket,and
withtherulesandproceduresforclearingandsettlement.Thedetailed
arrangements for implementing these rules and procedures may beadapted as appropriate, inter aliato ensure fulfilment of the ensuing
obligations,provided,however,thatArticle28iscompliedwith.
3. In order to meet the obligation imposed in paragraph 1, host
MemberStatesshalloffertheinvestmentfirmsreferredtointhatpara-
graphthechoiceofbecomingmembersoforofhavingaccesstotheir
regulatedmarketseither:
— directly,bysettingupbranchesinthehostMemberStates,or
— indirectly, by setting up subsidiaries in the host Member States or
by acquiring firms in the host Member States that are already
membersoftheirregulatedmarketsoralreadyhaveaccessthereto.
However,thoseMemberStateswhich,whenthisDirective isadopted,
applylawswhichdonotpermitcreditinstitutionstobecomemembersof or have access to regulated markets unless they have specializedsubsidiaries may continue until 31 December 1996 to apply the sameobligationinanon-discriminatorywaytocreditinstitutionsfromother
MemberStatesforpurposesofaccesstothoseregulatedmarkets.
The Kingdomof 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 qualified1993L0022—EN—11.02.2003—004.001—18
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majorityonthebasisofthatproposal,decidetoreviewthosearrange-
ments.
4. Subject to paragraphs 1, 2 and 3, where the regulated market of
thehostMemberStateoperateswithoutanyrequirementforaphysical
presence the investment firms referred to in paragraph 1 may become
membersoforhaveaccesstoitonthesamebasiswithouthavingtobeestablished 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'regulatedmarkets
toprovide appropriate facilities within the home MemberStates' terri-
tories.
5. ThisArticleshallnotaffecttheMemberStates'righttoauthorize
orprohibitthecreationofnewmarketswithintheirterritories.
6. ThisArticleshallhavenoeffect:
— intheFederalRepublicofGermany,ontheregulationoftheactiv-
itiesofKursmakler,or
— 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 the
regulated markets for which it is the home Member State and which
comply with its regulations, and to forward that list for information,together with the relevant rules of procedures and operation of thoseregulatedmarkets,totheotherMemberStatesandtheCommission.Asimilar communication shall be effected in respect of each change to
theaforementionedlistorrules.TheCommissionshallpublishthelists
ofregulated marketsandupdatestheretointhe Official Journal of the
European Communities atleastonceayear.
No later than 31 December 1996 the 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 ofanother Member State shall notify the competent authorities of itshomeMemberState.
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 notification
providedforinparagraph1:
(a) theMemberStatewithintheterritoryofwhichitplanstoestablish
abranch;
(b) aprogrammeofoperationssettingout inter aliathetypesofbusi-
nessenvisagedandtheorganizationalstructureofthebranch;
(c) the address in the host Member State from which documents may
beobtained;
(d) thenamesofthoseresponsibleforthemanagementofthebranch.
3. UnlessthecompetentauthoritiesofthehomeMemberStatehave
reason to doubt the adequacy of the administrative structure or the
financialsituationofaninvestmentfirm,takingintoaccounttheactiv-ities envisaged, they shall, within three months of receiving all theinformation referred to in paragraph 2, communicate that informationtothecompetentauthoritiesofthehostMemberStateandshallinformtheinvestmentfirmconcernedaccordingly.
They shall also communicate details of any compensation scheme
intendedtoprotectthebranch'sinvestors.1993L0022—EN—11.02.2003—004.001—19
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Where the competent authorities of the home Member State refuse to
communicate theinformationreferredtoinparagraph2tothecompe-tent authorities of the host Member State, they shall give reasons for
their refusal to the investment firm concerned within three months of
receiving all the information. That refusal or failure to reply shall besubjecttotherighttoapplytothecourtsinthehomeMemberStates.
4. Beforethebranchofaninvestmentfirmcommencesbusinessthe
competent authorities of the host Member State shall, within twomonthsofreceivingtheinformationreferredtoinparagraph3,preparefor the supervision of the investment firm in accordance with Article19 and, if necessary, indicate the conditions, including the rules ofconduct,underwhich,intheinterestofthegeneralgood,thatbusiness
mustbecarriedoninthehostMemberState.
5. Onreceiptofacommunicationfromthecompetentauthoritiesof
the host Member State or on the expiry of the period provided for inparagraph4withoutreceiptofanycommunication fromthoseauthori-
ties,thebranchmaybeestablishedandcommencebusiness.
6. In the event ofa change in any ofthe particulars communicated
inaccordancewithparagraph2(b),(c)or(d),aninvestmentfirmshallgive written notice of that change to the competent authorities of the
homeandhostMemberStatesatleastonemonthbeforeimplementing
thechangesothatthecompetentauthoritiesofthehomeMemberStatemay take adecision onthe change underparagraph 3andthecompe-tentauthoritiesofthehostMemberStatemaydosounderparagraph4.
7. In the event of a change in the particulars communicated in
accordance with the second subparagraph of paragraph 3, the authori-tiesofthehomeMemberStateshallinformtheauthoritiesofthehostMemberStateaccordingly.
Article 18
1. Anyinvestmentfirmwishingtocarryonbusinesswithintheterri-
tory of another Member State for the first time under the freedom toprovide services shall communicate the following information to the
competentauthoritiesofitshomeMemberState:
— theMemberStateinwhichitintendstooperate,
— a programme of operations stating in particular the investment
serviceorserviceswhichitintendstoprovide.
2. The competent authorities of the home Member State shall,
withinonemonthofreceivingtheinformationreferredtoinparagraph
1, forward it to the competent authorities of the host Member State.The investment firm may then start to provide the investment serviceorservicesinquestioninthehostMemberState.
Whereappropriate,thecompetentauthoritiesofthehostMemberState
shall,onreceiptoftheinformationreferredtoinparagraph1,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 accor-
dance with the second indent of paragraph 1 be amended, theinvestment firm shall give notice of the amendment in writing to thecompetent authorities of the home Member State and of the host
Member State before implementing the change, so that the competent
authorities of the host Member State may, if necessary, inform thefirmofanychangeoradditiontobemadetotheinformationcommu-nicatedunderparagraph2.
Article 19
1. Host Member States may, for statistical purposes, require all
investmentfirmswithbrancheswithintheirterritoriestoreportperiodi-cally on their activities in those host Member States to the competentauthoritiesofthosehostMemberStates.1993L0022—EN—11.02.2003—004.001—20
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Indischargingtheirresponsibilities intheconductofmonetarypolicy,
without prejudice to the measures necessary for the strengthening ofthe European Monetary System, host Member States may within their
territories require allbranchesofinvestment firmsoriginating inother
Member States to provide the same particulars as national investmentfirmsforthatpurpose.
2. In discharging their responsibilities under this Directive, host
Member States may require branches of investment firms to provide
thesameparticularsasnationalfirmsforthatpurpose.
HostMemberStatesmayrequireinvestmentfirmscarryingonbusiness
withintheirterritoriesunderthefreedomtoprovideservicestoprovide
the information necessary forthe monitoring of their compliance with
thestandardssetbythehostMemberStatethatapplytothem,althoughthose requirements may not be more stringent than those which thesame Member State imposes on established firms for the monitoringoftheircompliancewiththesamestandards.
3. WherethecompetentauthoritiesofahostMemberStateascertain
thataninvestmentfirmthathasabranchorprovidesserviceswithinitsterritory is in breach of the legal or regulatory provisions adopted inthat State pursuant to those provisions of this Directive which conferpowersonthehostMemberState'scompetentauthorities,thoseautho-
rities shall require the investment firm concerned to put an end to its
irregularsituation.
4. Iftheinvestmentfirmconcernedfailstotakethenecessarysteps,
the competent authorities of the host Member State shall inform the
competent authorities of the home Member State accordingly. The
lattershall,attheearliestopportunity,takeallappropriatemeasurestoensure that the investment firm concerned puts an end to its irregularsituation. The nature of those measures shall be communicated to thecompetentauthoritiesofthehostMemberState.
5. If, despite the measures taken by the home Member State or
because such measures prove inadequate or are not available in theStateinquestion,theinvestment firmpersistsinviolating thelegal orregulatory provisions referred to in paragraph 2 in force in the hostMemberState,thelattermay,afterinformingthecompetentauthorities
ofthehomeMemberState,takeappropriatemeasurestopreventorto
penalizefurtherirregularitiesand,insofarasnecessary,topreventthatinvestmentfirmfrominitiatinganyfurthertransactionswithinitsterri-tory. The Member States shall ensure that within their territories it ispossibletoservethelegal documentsnecessaryforthosemeasuresoninvestmentfirms.
6. The foregoing provisions shall not affect the powers of host
Member States to take appropriate measures to prevent or to penalizeirregularities committed within their territories which are contrary tothe rules of conduct introduced pursuant to Article 11 as well as to
other legal or regulatory provisions adopted in the interest of the
generalgood.Thisshallincludethepossibilityofpreventingoffendinginvestment firms from initiating any further transactions within theirterritories.
7. Anymeasure adopted pursuanttoparagraphs 4,5or6involving
penaltiesorrestrictionsontheactivitiesofaninvestmentfirmmustbe
properlyjustifiedandcommunicatedtotheinvestmentfirmconcerned.EverysuchmeasureshallbesubjecttotherighttoapplytothecourtsintheMemberStatewhichadoptedit.
8. Before following the procedure laid down in paragraphs 3, 4 or
5thecompetentauthoritiesofthehostMemberStatemay,inemergen-cies,takeanyprecautionarymeasuresnecessarytoprotecttheinterestsofinvestorsandothersforwhomservicesareprovided.TheCommis-sion and the competent authorities of the other Member States
concerned must be informed of such measures at the earliest opportu-
nity.
After consulting the competent authorities of the Member States
concerned,theCommissionmaydecidethattheMemberStateinques-tionmustamendorabolishthosemeasures.1993L0022—EN—11.02.2003—004.001—21
▼B
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 from
initiating any further transactions within its territory and to safeguard
investors' interests. Every two years the Commission shall submit areport on such cases to the committee set up at a later stage in thesecuritiesfield.
10. TheMemberStatesshallinformtheCommissionofthenumber
andtypeofcasesinwhichtherehavebeenrefusalspursuanttoArticle
17ormeasureshavebeentakeninaccordancewithparagraph5.Everytwo years the Commission shall submit a report on such cases to thecommitteesetupatalaterdateinthesecuritiesfield.
Article 20
1. Inordertoensurethattheauthoritiesresponsibleforthemarkets
and for supervision have access to the information necessary for the
performanceoftheirduties,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 theservices referred to in Article 14 (1) which they have carried outininstrumentsdealtinonaregulatedmarket,whethersuchtransac-
tionswerecarriedoutonaregulatedmarketornot;
(b) thatinvestmentfirmsreporttocompetentauthoritiesintheirhome
Member States all the transactions referred to in (a) where those
transactionscover:
— sharesorotherinstrumentsgivingaccesstocapital,
— bondsandotherformsofsecuritizeddebt,— standardizedforwardcontractsrelatingtosharesor— standardizedoptionsonshares.
Such reports must be made available to the relevant authority at the
earliest opportunity. The time limit shall be fixed by that authority. Itmaybeextendedtotheendofthefollowingworkingdaywhereopera-
tional or practical reasons so dictate but in no circumstances may it
exceedthatlimit.
Such reports must, in particular, include details of the names and
numbers of the instruments bought or sold,the dates and times ofthetransactions,thetransactionpricesandmeansofidentifyingtheinvest-mentfirmsconcerned.
Home Member States may provide that the obligation imposed in (b)
shall, in the case of bonds and other forms of securitized debt, applyonlytoaggregatedtransactionsinthesameinstrument.
2. Whereaninvestmentfirmcarriesoutatransactiononaregulated
market in its host Member State, the home Member State may waiveits own requirements as regards reporting if the investment firm is
subjecttoequivalentrequirementstoreportthetransactioninquestion
totheauthoritiesinchargeofthatmarket.
3. Member States shall provide that the report referred to in para-
graph 1(b)shall be made either bythe investment firm itself orbyatrade-matching system, or through stock-exchange authorities or thoseofanotherregulatedmarket.
4. Member States shall ensure that the information available in
accordancewiththisArticleisalsoavailablefortheproperapplicationofArticle23.
5. Each Member State may, in a non-discriminatory manner, adopt
or maintain provisions more stringent in the field governed by thisArticlewithregardtosubstanceandforminrespectoftheconservation
andreportingofdatarelatingtotransactions:
— carriedoutonaregulated market ofwhichitisthehomeMember
Stateor1993L0022—EN—11.02.2003—004.001—22
▼B
— 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, foreachoftheregulatedmarketswhichithasenteredonthelistprovidedforinArticle16,takemeasurestoprovideinvestorswiththeinforma-
tion referred to in paragraph 2. In accordance with the requirements
imposed in paragraph 2, the competent authorities shall determine theforminwhichandtheprecisetimewithinwhichtheinformation istobeprovided,aswellasthemeansbywhichitistobemadeavailable,having regard to the nature, size and needs of the market concernedandoftheinvestorsoperatingonthatmarket.
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 thevolume dealt inonthe regulated market inquestionforthe whole
oftheprecedingday'strading;
(b) in addition, for continuous order-driven and quote-driven markets,
publication:
— attheendofeachhour'stradingonthemarket,oftheweighted
average price and the volume dealt in on the regulated marketin question for a six-hour trading period ending so as to leave
twohours'tradingonthemarketbeforepublication,and
— every20minutes,oftheweightedaveragepriceandthehighest
andlowestpricesontheregulatedmarketinquestionforatwo-
hourtradingperiodendingsoastoleaveonehour'stradingon
themarketbeforepublication.
Where investors have prior access to information on the prices and
quantitiesforwhichtransactionsmaybeundertaken:
(i) such information shall be available at all times during market
tradinghours;
(ii) the terms announced foragiven price andquantity shall beterms
onwhichitispossibleforaninvestortocarryoutsuchatransac-
tion.
Thecompetentauthoritiesmaydelayorsuspendpublicationwherethat
provestobejustified byexceptional market conditions or,inthe caseofsmallmarkets,topreservetheanonymityoffirmsandinvestors.Thecompetent authorities may apply special provisions in the case ofexceptional transactions that are very large in scale compared withaverage transactions in the security in question on that market and in
the case of highly illiquid securities defined by means of objective
criteria and made public. The competent authorities may also applymore flexible provisions, particularly as regards publication deadlines,fortransactionsconcerningbondsandotherformsofsecuritizeddebt.
3. In the field governed by this Article each Member State may
adopt or maintain more stringent provisions or additional provisionswith regard the substance and form in which information must bemade available to investors concerning transactions carried out on
regulated markets of which it is the home Member State, provided
that those provisions apply regardless of the Member State in whichtheissuerofthefinancialinstrumentislocatedoroftheMemberStateontheregulatedmarketofwhichtheinstrumentwaslistedforthefirsttime.
4. TheCommissionshallreportontheapplicationofthisArticleno
laterthan31December1997;theCouncilmay,onaproposalfromtheCommission,decidebyaqualifiedmajoritytoamendthisArticle.1993L0022—EN—11.02.2003—004.001—23
▼B
TITLEVI
Authoritiesresponsibleforauthorizationandsupervision
Article 22
1. Member States shall designate the competent authorities which
are to carry out the duties provided for in this Directive. They shallinformtheCommissionthereof,indicatinganydivisionofthoseduties.
2. The authorities referred to in paragraph 1 must be either public
authorities,bodiesrecognizedbynationallaworbodiesrecognizedbypublic authorities expressly empowered for that purpose by nationallaw.
3. Theauthoritiesconcernedmusthaveallthepowersnecessaryfor
theperformanceoftheirfunctions.
Article 23
1. Where there are two or more competent authorities in the same
Member State, they shall collaborate closely in supervising the activ-
itiesofinvestmentfirmsoperatinginthatMemberState.
2. Member States shall ensure that such collaboration takes place
between such competent authorities and the public authorities respon-
sible for the supervision of financial markets, credit and other
financialinstitutionsandinsuranceundertakings,asregardstheentitieswhichthoseauthoritiessupervise.
3. Where,throughtheprovisionofservicesorbytheestablishment
ofbranches,aninvestmentfirmoperatesinoneormoreMemberStatesother than its home Member State the competent authorities ofall theMemberStatesconcernedshallcollaboratecloselyinordermoreeffec-tively to discharge their respective responsibilities in the area covered
bythisDirective.
They shall supply one another on request with all the information
concerning the management and ownership of such investment firms
that is likely to facilitate their supervision and all information likely
to facilitate the monitoring ofsuch firms. In particular, the authoritiesofthehomeMemberStateshallcooperatetoensurethattheauthoritiesof the host Member State collect the particulars referred to in Article19(2).
Insofarasitisnecessaryforthepurposeofexercisingtheirpowersof
supervision,thecompetentauthoritiesofthehomeMemberStateshallbeinformedbythecompetent authorities ofthehostMemberStateofany measures taken by the host Member State pursuant to Article 19
(6) which involve penalties imposed on an investment firm or restric-
tionsonaninvestmentfirm'sactivities.
Article 24
1. Each host Member State shall ensure that, where an investment
firmauthorizedinanotherMemberStatecarriesonbusinesswithinitsterritory through a branch, the competent authorities of the homeMember State may, after informing the competent authorities of the
hostMemberState,themselves orthroughtheintermediary ofpersons
they instruct for the purpose carry out on-the-spot verification of theinformationreferredtoinArticle23(3).
2. The competent authorities of the home Member State may also
ask the competent authorities of the host Member State to have suchverification carried out. Authorities which receive such requests must,within the framework of their powers, act upon them by carrying outthe verifications themselves, by allowing the authorities who haverequestedthemtocarrythemoutorbyallowingauditorsorexpertsto
doso.
3. ThisArticleshallnotaffecttherightofthecompetentauthorities
ofahostMemberState,indischargingtheirresponsibilitiesunderthis1993L0022—EN—11.02.2003—004.001—24
▼B
Directive,tocarryouton-the-spotverificationsofbranchesestablished
withintheirterritory.
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 the
obligation of professional secrecy. Accordingly no confidential infor-
mation which they may receive in the course of their duties may bedivulged to any person or authority whatsoever, save in summary oraggregateformsuchthatindividualinvestmentfirmscannotbeidenti-fied,withoutprejudicetocasescoveredbycriminallaw.
Nevertheless,whereaninvestment firmhasbeendeclaredbankruptor
is being compulsorily wound up, confidential information which doesnotconcernthirdpartiesinvolvedinattemptstorescuethatinvestmentfirmmaybedivulgedincivilorcommercialproceedings.
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 professional
secrecyimposedinparagraph1.
3. Member States may conclude cooperation agreements providing
for exchange of information with the competent authorities of thirdcountries or with authorities or bodies of third countries as defined inparagraphs 5 and 5a only if the information disclosed is subject toguarantees ofprofessional secrecy atleast equivalent tothosereferred
to in this Article. Such exchange of information must be intended for
the performance of the supervisory task of the authorities or bodiesmentioned.
Wheretheinformation originatesinanotherMemberState,itmaynot
be disclosed without the express agreement of the competent authori-
ties which have disclosed it and, where appropriate, solely for thepurposesforwhichthoseauthoritiesgavetheiragreement.
4. Competent authorities receiving confidential information under
paragraph1or2mayuseitonlyinthecourseoftheirduties:
— tocheckthattheconditionsgoverningthetakingupofthebusiness
of investment firms are met and to facilitate the monitoring, on anon-consolidatedorconsolidatedbasis,oftheconductofthatbusi-
ness, especially with regard to the capital adequacy requirements
imposed in Directive 93/6/EEC, administrative and accountingproceduresandinternal-controlmechanisms,
— toimposesanctions,
— inadministrativeappealsagainstdecisionsbythecompetentautho-
rities,or
— incourtproceedingsinitiatedunderArticle26.
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) withinaMemberStateorbetweenMemberStates,betweencompe-
tentauthoritiesand
— authorities responsibleforthesupervisionofcreditinstitutions,
otherfinancialorganizationsandinsuranceundertakingsandthe
authoritiesresponsibleforthesupervisionoffinancialmarkets,
— bodiesresponsiblefortheliquidationandbankruptcyofinvest-
mentfirmsandothersimilarproceduresand
— persons responsible for carrying out statutory audits of the
accountsofinvestmentfirmsandotherfinancialinstitutions,1993L0022—EN—11.02.2003—004.001—25
▼M3
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▼B
intheperformanceoftheirsupervisoryfunctions,orthedisclosure
to bodies which administer compensation schemes of informationnecessaryfortheperformanceoftheirfunctions.Suchinformation
shall be subject to the conditions of professional secrecy imposed
inparagraph1.
5a. Notwithstanding paragraphs 1 to 4, Member States may
authorize exchangesofinformation between,thecompetent authoritiesand:
— theauthoritiesresponsibleforoverseeingthebodiesinvolvedinthe
liquidation and bankruptcy of investment firms and other similarprocedures,or
— the authorities responsible for overseeing persons charged with
carryingoutstatutoryauditsoftheaccountsofinsuranceundertak-
ings, credit institutions, investment firms and other financialinstitutions.
Member States which have recourse to the option provided for in the
first subparagraph shall require at least that the following conditions
aremet:
— the information shall be for the purpose of performing the task of
overseeingreferredtointhefirstsubparagraph,
— information received in this context shall be subject to the condi-
tionsofprofessionalsecrecyimposedinparagraph1,
— 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, solely
forthepurposesforwhichthoseauthoritiesgavetheiragreement.
MemberStatesshallcommunicate totheCommissionandtotheother
Member States the names of the authorities which may receive infor-mationpursuanttothisparagraph.
5b. Notwithstanding paragraphs 1 to 4, Member States may, with
theaimofstrengtheningthestability,includingintegrity,ofthefinan-cial system, authorize the exchange of information between thecompetent authorities and the authorities or bodies responsible underthelawforthedetectionandinvestigationofbreachesofcompanylaw.
Member States which have recourse to the option provided for in the
first subparagraph shall require at least that the following conditonsaremet:
— the information shall be for the purpose of performing the task
referredtointhefirstsubparagraph,
— information received in this context shall be subject to the condi-
tionsofprofessionalsecrecyimposedinparagraph1,
— 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, solelyforthepurposesforwhichthoseauthoritiesgavetheiragreement.
Where, in a Member State, the authorities or bodies referred toin the
firstsubparagraphperformtheirtaskofdetection orinvestigationwiththeaid,inviewoftheirspecificcompetence, ofpersonsappointedforthat purpose and not employed in the public sector, the possibility ofexchanging information provided for in the first subparagraph may beextendedtosuchpersonsundertheconditionsstipulatedinthesecond
subparagraph.
Inordertoimplement thefinalindentofthesecondsubparagraph,the
authoritiesorbodiesreferredtointhefirstsubparagraphshallcommu-nicate to the competent authorities which have disclosed the
information, the names and precise responsibilities of the persons to
whomitistobesent.
MemberStatesshallcommunicate totheCommissionandtotheother
Member States the names of the authorities or bodies which mayreceiveinformationpursuanttothisparagraph.1993L0022—EN—11.02.2003—004.001—26
▼M1
▼M1
Before 31December 2000,theCommissionshalldrawupa report on
theapplicationoftheprovisionsofthisparagraph.
6. This Article shall not prevent a competent authority from trans-
mitting:
— to central banks and other bodies with a similar function in their
capacityasmonetaryauthorities,
— where appropriate, to other public authorities responsible for over-
seeingpaymentsystems,
information intended for the performance of their task, nor shall it
prevent such authorities or bodies from communicating to the compe-tentauthoritiessuchinformation astheymayneedforthepurposesofparagraph4.InformationreceivedinthiscontextshallbesubjecttotheconditionsofprofessionalsecrecyimposedinthisArticle.
7. This Article shall not prevent the competent authorities from
communicating the information referred to in paragraphs 1 to 4 to a
clearinghouseorothersimilarbodyrecognizedundernationallawfortheprovisionofclearingorsettlementservicesforoneoftheirMemberState'smarketsiftheyconsiderthatitisnecessarytocommunicatetheinformationinordertoensuretheproperfunctioningofthosebodiesinrelation to defaults or potential defaults by market participants. The
information received shall be subject to the conditions of professional
secrecy imposed in paragraph 1. The Member States shall, however,ensure that information received under paragraph 2 may not bedisclosed in the circumstances referred to in this paragraph withouttheexpressconsentofthecompetentauthoritieswhichdisclosedit.
8. In addition, notwithstanding the provisions referred to in para-
graphs 1 and 4, Member States may, by virtue of provisions laiddown by law, authorize the disclosure of certain information to otherdepartments of their central government administrations responsible
forlegislationonthesupervisionofcreditinstitutions,financialinstitu-
tions, investment firms and insurance undertakings and to inspectorsinstructedbythosedepartments.
Such disclosures may, however, be made only where necessary for
reasonsofprudentialcontrol.
MemberStatesshall,however,providethatinformationreceivedunder
paragraphs2and5andthatobtainedbymeansoftheon-the-spotveri-fications referred toinArticle 24may never bedisclosed inthe casesreferred to in this paragraph except with the express consent of the
competentauthoritieswhichdisclosedtheinformationorofthecompe-
tent authorities of the Member State in which the on-the-spotverificationwascarriedout.
9. If, at the time of the adoption of this Directive, a Member State
provides for the exchange of information between authorities in order
to check compliance with the laws on prudential supervision, on theorganization, operation and conduct of commercial companies and onthe regulation of financial markets, that Member State may continueto authorize the forwarding of such information pending coordinationof all the provisions governing the exchange of information between
authorities for the entire financial sector but not in any case after 1
July1996.
Member States shall, however, ensure that, where information comes
from another Member State, it may not be disclosed in the circum-
stances referred to in the first subparagraph without the express
consent of the competent authorities which disclosed it and it may beusedonlyforthepurposesforwhichthoseauthoritiesgavetheiragree-ment.
TheCouncilshalleffectthecoordinationreferredtointhefirstsubpar-
agraph onthe basisof a Commission proposal. The Council notestheCommission'sstatementtotheeffectthatitwillsubmitproposalsby31July1993atthelatest.TheCouncilwillactonthoseproposalswithinthe shortest possible time with the intention of bringing the rulesproposedintoeffectonthesamedateasthisDirective.1993L0022—EN—11.02.2003—004.001—27
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▼M1
Article 25a
1. MemberStatesshallprovideatleastthat:
(a) any person authorized within the meaning of Directive 84/253/
EEC(1), performing in an investment firm the task described in
Article51ofDirective78/660/EEC(2),Article37ofDirective83/
349/EECorArticle31ofDirective85/611/EECoranyotherstatu-
tory task, shall have a duty to report promptly to the competentauthorities any fact or decision concerning that undertaking ofwhich he has become aware while carrying out that task which isliableto:
— constituteamaterialbreachofthelaws,regulationsoradminis-
trative provisions which lay down the conditions governingauthorization or which specifically govern pursuit of the activ-itiesofinvestmentfirms,or
— affectthecontinuousfunctioningoftheinvestmentfirm,or— lead to refusal to certify the accounts or to the expression of
reservations;
(b) thatpersonshalllikewisehaveadutytoreportanyfactsanddeci-
sions of which he becomes aware in the course of carrying out atask as described in (a) in an undertaking having close links
resulting froma control relationship with the investm ent firm
withinwhichheiscarryingouttheabovementionedtask.
2. The disclosure in good faith to the competent authorities, by
persons authorized within the meaning of Directive 84/253/EEC, ofany fact or decision referred to in paragraph 1 shall not constitute abreach of any restriction on disclosure of information imposed bycontract of by any legislative, regulatory or administrative provision
andshallnotinvolcesuchpersonsinliabilityofanykind.
Article 26
MemberStatesshallensurethatdecisionstakeninrespectofaninvest-
ment firm under laws, regulations and administrative provisions
adopted in accordance with this Directive are subject to the right toapply to the courts; the same shall apply where no decision is takenwithin six months of its submission in respect of an application forauthorization which provides all the information required under the
provisionsinforce.
Article 27
Withoutprejudicetotheproceduresforthewithdrawalofauthorization
ortotheprovisionsofcriminal law,MemberStatesshallprovidethat
their respective competent authorities may, with regard to investment
firms 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 observed
breachesorthecausesofsuchbreaches.
Article 28
MemberStatesshallensurethatthisDirective isimplemented without
discrimination.1993L0022—EN—11.02.2003—004.001—28
(1) OJNoL126,12.5.1984,p.20.
(2) OJNoL222,14.8.1978,p.11.DirectiveaslastamendedbyDirective90/
605/EEC(OJNoL317,16.11.1990,p.60).▼B
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TITLEVII
Finalprovisions
Article 29
Pending the adoption of a further Directive laying down provisions
adapting this Directive to technical progress in the areas specified
below, 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:
— expansionofthelistinSectionCoftheAnnex,
— adaptation of the terminology of the lists in the Annex to take
accountofdevelopmentsonfinancialmarkets,
— the areas in which the competent authorities must exchange infor-
mationaslistedinArticle23;
— clarification of the definitions in order to ensure uniformapplica-
tionofthisDirectiveintheCommunity,
— clarificationofthedefinitionsinordertotakeaccountintheimple-
mentationofthisDirectiveofdevelopmentsonfinancialmarkets,
— the alignment of terminology and the framing of definitions in
accordance with subsequent measures on investment firms andrelatedmatters,
— theothertasksprovidedforinArticle7(5).
Article 30
1. InvestmentfirmsalreadyauthorizedintheirhomeMemberStates
to provide investment services before 31 December 1995 shall be
deemed to be so authorized for the purpose of this Directive, if thelaws of those Member States provide that to take up such activitiestheymustcomplywithconditionsequivalenttothoseimposedinArti-cles3(3)and4.
2. Investment firms which are already carrying on business on 31
December 1995andarenotincluded amongthosereferred toinpara-
graph 1 may continue their activities profided that, no later than 31December 1996andpursuanttothe provisionsoftheir home MemberStates, they obtain authorization to continue such activities in accor-dancewiththeprovisionsadoptedinimplementationofthisDirective.
Onlythegrantofsuchauthorization shallenablesuchfirmstoqualify
undertheprovisionsofthisDirectiveontherightofestablishmentand
thefreedomtoprovideservices.
3. Where before the date of the adoption of this Directive invest-
ment firms have commenced business in other Member States eitherthrough branches orunderthe freedomtoprovide services, the autho-rities of each home Member State shall, between 1 July and 31
December1995,communicate, forthepurposesofArticles17(1)and
(2) and 18, to the authorities of each of the other Member StatesconcernedthelistoffirmsthatcomplywiththisDirectiveandoperateinthoseStates,indicatingthebusinesscarriedon.
4. Natural personsauthorized inaMemberState onthe date ofthe
adoptionofthisDirectivetoofferinvestmentservicesshallbedeemed
to be authorized under this Directive, provided that they fulfil the
requirements imposed in Article 1 (2), second subparagraph, secondindent,andthirdsubparagraph,allfourindents.
Article 31
Nolaterthan1July1995MemberStatesshalladoptthelaws,regula-
tionsandadministrative provisionsnecessaryforthemtocomplywiththisDirective.1993L0022—EN—11.02.2003—004.001—29
(1) OJNoL197,18.7.1987,p.33.
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Theseprovisionsshallenterintoforcenolaterthan31December1995.
TheMemberStatesshallforthwithinformtheCommissionthereof.
WhenMemberStatesadopttheprovisionsreferredtointhefirstpara-
graph they shall include a reference to this Directive or accompany
themwithsuchareferenceontheoccasionoftheirofficialpublication.The manner in which such references are to be made shall be laiddownbytheMemberStates.
Article 32
ThisDirectiveisaddressedtotheMemberStates.1993L0022—EN—11.02.2003—004.001—30
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ANNEX
SECTIONA
Services
1. (a) Reception and transmission, onbehalf ofinvestors, ofordersin relation
tooneormoreoftheinstrumentslistedinSectionB.
(b) Executionofsuchordersotherthanforownaccount.
2. DealinginanyoftheinstrumentslistedinSectionBforownaccount.
3.►C2Managing portfolios of investments in accordance with mandates
given by investors on a discretionary, ◄client-by-client basis where such
portfoliosincludeoneormoreoftheinstrumentslistedinSectionB.
4. UnderwritinginrespectofissuesofanyoftheinstrumentslistedinSection
Band/ortheplacingofsuchissues.
SECTIONB
Instruments
1. (a) Transferablesecurities.
(b) Unitsincollectiveinvestmentundertakings.
2. Money-marketinstruments.
3. Financial-futurescontracts,includingequivalentcash-settledinstruments.
4. Forwardinterest-rateagreements(FRAs).5. Interest-rate,currencyandequityswaps.
6. Optionstoacquireordisposeofanyinstrumentsfallingwithinthissectionof
the Annex, including equivalent cash-settled instruments. This category
includesinparticularoptionsoncurrencyandoninterestrates.
SECTIONC
Non-coreservices
1. Safekeepingandadministrationinrelationtooneormoreoftheinstruments
listedinSectionB.
2. Safecustodyservices.
3. Grantingcreditsorloanstoaninvestortoallowhimtocarryoutatransac-
tion in one or more of the instruments listed in Section B, where the firm
grantingthecreditorloanisinvolvedinthetransaction.
4. Advice to undertakings on capital structure, industrial strategy and related
mattersandadviceandservicerelatingtomergersandthepurchaseofunder-
takings.
5. Servicesrelatedtounderwriting.
6. Investment advice concerning one or more of the instruments listed in
SectionB.
7. Foreign-exchange service where these are connected with the provision of
investmentservices.1993L0022—EN—11.02.2003—004.001—31