OPINION OF THE COMMISSION pursuant to Article 251 (2) (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the taking up, the pursuit and the prudential supervision of the business of electronic money institutions and for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 77/780/EEC on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

1. Introduction

Article 251(2)(c) of the EC Treaty lays down that the Commission shall deliver an opinion on the amendments proposed by the European Parliament at second reading.

The Commission sets out its opinion below on the 2 amendments proposed by Parliament.

2. Background

1. On 21 September 1998 the Commission adopted a proposal for a European Parliament and Council Directive on the taking up, the pursuit and the prudential supervision of the business of electronic money institutions and a proposal amending Council Directive 77/780/EC on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (COM (1998)461 - 1998/0252/COD - 1998/0253/COD).

2. The Council began to examine the proposals on 19 October 1998.

3. At its Plenary Session on 19 January 1999 the Economic and Social Committee adopted a favourable opinion on the Commission proposals.

4. The European Central Bank gave its opinion on 18 January 1999.

5. The European Parliament adopted the legislative resolution (first reading) introducing twenty-five amendments on 15 April 1999. (PE A4-156/99)

6. On 29 November 1999 the Council adopted a common position.

7. On 11 April 2000 the European Parliament adopted amendments to the common position which are the subject of this Communication.

3. PURPOSE OF THE COMMISSION PROPOSALS

The main purpose of the proposal is to create a harmonised single market in the provision of electronic money in the European Union. The proposal deals only with the regulatory and prudential issues relating to non-bank issuance of electronic money. However, as it is clear that traditional credit institutions too will play an important part in this segment of retail financial business, the fundamental rules concerning free circulation under the principle of mutual recognition and the supervisory regime to which they are subject, such as authorisation, capital requirement, supervision etc. should also be applied in an appropriate way to electronic money institutions.

The proposal to amend the definition of credit institution in the First Banking Directive to allow institutions, which are not willing to enter into full banking operations, to issue electronic money under the fundamental rules governing all other credit institutions will promote the harmonious development of the activities of all credit institutions throughout the Community, in particular as regards the issuance of electronic money, and will avoid distortion of competition between electronic money institutions even as regards the application of monetary policy requirements.

4. Opinion of the Commission on the amendments by the European Parliament

4.1 General considerations

The 2 amendments involve no change of substance but merely clarify a point which was already included in the common position: electronic money not used by the bearer must be redeemed at par value, i.e. with no depreciation against the value expressed in the issuing currency.

4.2 The European Parliament's amendments

The two amendments concern

- the addition of a new recital 9a to read: "Redeemability should always be understood to be at par value";

- amendment, to the same end, of Article 3(1) to read: "1. A bearer of electronic money may, during the period of validity, ask the issuer to redeem it at par value in coins and bank notes or by a transfer to an account free of charges other than those strictly necessary to carry out that operation".

5. Conclusion

The amendments involve no change of substance. The Commission can accept them.

Under the terms of Article 250(2) of the EC Treaty, the Commission amends its proposal in accordance with the above.