COMMON POSITION (EC) No 8/97 adopted by the Council on 16 December 1996 with a view to adopting European Parliament and Council Directive 97/. . ./EC of . . . amending Directive 93/6 EEC on the capital adequacy of investment firms and credit institutions and Directive 93/22/EEC on investment services in the securities field (97/C 69/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular the first and third sentences of Article 57 (2) thereof,

Having regard to the proposal from the Commission (1),

Acting in accordance with the procedure referred to in Article 189 b of the Treaty (2),

Whereas implementing measures are necessary for the application of Directives on securities, securities markets and securities intermediaries, particularly in view of the need to adapt the Directives to new developments in the financial sector;

Whereas in Article 10 of Directive 93/6/EEC (3) and in Article 29 of Directive 93/22/EEC (4) the Council retained for itself the powers to adopt implementing measures pending the adoption of a subsequent act designed to enable the Commission to exercise those powers;

Whereas, in accordance with the provisions of Article 145, third indent of the Treaty, the Council confers on the Commission powers for the implementation of the rules which the Council lays down;

Whereas, on its second reading of the proposals for the said Directives the European Parliament had called for those powers to be conferred on the Commission;

Whereas it is necessary for this purpose to establish a Securities Committee to assist the Commission in these areas; whereas that Committee should also have an advisory role as regards both the application of Directives already adopted and the preparation of new proposals in the area;

Whereas it is appropriate that implementing measures be taken in accordance with the procedure laid down in Article 2, procedure III, variant (b), of Council Decision 87/373/EEC of 13 July 1987 laying down the procedures for the exercise of implementing powers conferred on the Commission (5);

Whereas Directives 93/6/EEC and 93/22/EEC should therefore be amended, the aforementioned Articles 10 and 29 being replaced by new Articles establishing the Securities Committee and giving the Commission, assisted by that Committee, responsibility for adapting the said Directives to technical progress;

Whereas the creation of the Securities Committee necessitates a number of other amendments to Directives 93/6/EEC and 93/22/EEC in order to modify certain of their provisions put in place pending the establishment of the said Committee;

Whereas the examination of matters concerning securities, securities markets and securities intermediaries makes the exchange of views between the competent authorities and the Commission desirable; whereas it is appropriate to entrust this task also to the Securities Committee;

Whereas some of the questions submitted to the Securities Committee concern undertakings or sectors that are of interest to other committees set up by the Council, in particular the Banking Advisory Committee set up by Directive 77/780/EEC (6) and the Insurance Committee set up by Directive 91/675/EEC (7) and whereas the converse may also arise; whereas in such cases close cooperation should take place between the Securities Committee and those other committees,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 93/6/EEC is hereby amended as follows:

1. in Article 2 (12), fifth paragraph, the words 'the Council and` shall be deleted, and after the words 'the Commission` the following words shall be inserted:', and the Commission shall inform the Securities Committee referred to in Article 10a accordingly,`;

2. in Article 7 (3), seventh indent, the words 'the Council and the Commission` shall be replaced by 'the Securities Committee`;

3. in Article 7 (9), third sentence, the words 'the Council` shall be replaced by 'the Securities Committee`;

4. in Annex III (9), the words 'Council and` shall be deleted, and after the words 'the Commission` the following words shall be inserted: ', and the Commission shall inform the Securities Committee accordingly,`;

5. in Annex V (9), the words ', of which they shall notify the Council and the Commission,` shall be deleted, and after the words 'The competent authorities shall establish procedures` the following words shall be added: '(which they shall notify to the Commission and the Commission shall in turn notify to the Securities Committee)`.

6. Article 10 is hereby replaced by the following three Articles:

'Article 10

The technical adaptations to be made to this Directive in the following areas shall be adopted in accordance with the procedure laid down in Article 10a:

- clarification of the definitions in Article 2 in order to ensure uniform application of this Directive throughout the Community,

- clarification of the definitions in Article 2 to take account of developments on financial markets,

- alteration of the amounts of initial capital prescribed in Article 3 and the amount referred to in Article 4 (6) to take account of developments in the economic and monetary field,

- the alignment of terminology on and the framing of definitions in accordance with subsequent acts on institutions and related matters.

Article 10a

1. The Commission shall be assisted by a Securities Committee, hereinafter in this Article referred to as 'the Committee`, composed of representatives of the Member States and chaired by a representative of the Commission.

2. The Committee shall adopt its own rules of procedure.

3. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit which the Chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148 (2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States in the Committee shall be weighted as laid down in that Article. The Chairman shall not vote.

The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the Committee.

If the measures envisaged are not in accordance with the opinion of the Committee or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken. The Council shall act by a qualified majority.

If, on the expiry of a period of three months from the date of referral to it, the Council has not acted, the proposed measures shall be adopted by the Commission save where the Council has decided against those measures by a simple majority.

Article 10b

1. The Securities Committee shall, at the request of its Chairman or of one of its members, examine any question relating to the application of Community provisions concerning securities, securities markets and securities intermediaries.

The Commission may also consult the Committee on new proposals it intends to submit to the Council as regards further coordination in the sphere of securities, securities markets and securities intermediaries.

2. The Committee shall not consider specific problems relating to individual cases.`

Article 2

Directive 93/22/EEC is hereby amended as follows:

1. Article 7 (1) shall be replaced by the following:

'1. The competent authorities of the Member States shall inform the Commission:

(a) of the authorization of any firm which is the direct or indirect subsidiary of one or more parent undertakings governed by the law of a third country. The Commission shall inform the Securities Committee established in Article 10a of Directive 93/6/EEC (*) accordingly;

(b) whenever such a parent undertaking acquires a holding in a Community investment firm such that the latter would become its subsidiary. The Commission shall inform the Securities Committee accordingly.

When authorization is granted to any firm which is the direct or indirect subsidiary of one or more parent undertakings governed by the law of a third country, the competent authorities shall specify the structure of the group in the notification which they address to the Commission.

(*) OJ No L 141, 11. 6. 1993, p. 1. Directive as amended by Directive 97/. . ./EC of the European Parliament and the Council (OJ No L . . ., . . .. . ., p. . . .).`

2. Article 29 is hereby replaced by the following three Articles:

'Article 29

The technical adaptations to be made to this Directive in the following areas shall be adopted in accordance with the procedure laid down in Article 29a:

- expansion of the list in Section C of the Annex,

- adaptation of the terminology of the lists in the Annex to take account of developments on financial markets,

- the areas in which the competent authorities must exchange information as listed in Article 23,

- clarification of the definitions in order to ensure uniform application of this Directive in the Community,

- clarification of the definitions in order to take account in the implementation of this Directive of developments on financial markets,

- the alignment of terminology and the framing of definitions in accordance with subsequent measures on investment firms and related matters,

- the other tasks provided for in Article 7 (5).

Article 29a

1. The Commission shall be assisted by the Securities Committee established in Article 10a of Directive 93/6/EEC, hereinafter in this Article referred to as 'the Committee`.

2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit which the Chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148 (2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States in the Committee shall be weighted as laid down in that Article. The Chairman shall not vote.

The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the Committee.

If the measures envisaged are not in accordance with the opinion of the Committee or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken. The Council shall act by a qualified majority.

If, on the expiry of a period of three months from the date of referral to it, the Council has not acted, the proposed measures shall be adopted by the Commission, save where the Council has decided against those measures by a simple majority.

Article 29b

1. The Securities Committee shall at the request of its Chairman or of one of its members, examine any question relating to the application of Community provisions concerning securities, securities markets and securities intermediaries.

The Commission may also consult the Committee on new proposals it intends to submit to the Council as regards further coordination in the sphere of securities, securities markets and securities intermediaries.

2. The Committee shall not consider specific problems relating to individual cases.`

Article 3

This Directive shall enter into force three months after the date of publication in the Official Journal of the European Communities.

Article 4

This Directive is addressed to the Member States.

Done at . . .

For the European Parliament

The President

For the Council

The President

(1) OJ No C 253, 29. 9. 1995, p. 19.

(2) Opinion of the European Parliament of 9 May 1996 (OJ No C 152, 27. 5. 1996, p. 19), Council common position of 16 December 1996 and Decision of the European Parliament of . . . 1996 (not yet published in the Official Journal).

(3) OJ No L 141, 11. 6. 1993, p. 1.

(4) OJ No L 141, 11. 6. 1993, p. 27. Directive as amended by Directive 95/26/EC of the European Parliament and of the Council (OJ No L 168, 18. 7. 1995, p. 7).

(5) OJ No L 197, 18. 7. 1987, p. 33.

(6) OJ No L 322, 17. 12. 1977, p. 30. Directive as last amended by Directive 95/26/EC (OJ No L 168, 18. 7. 1995, p. 7).

(7) OJ No L 374, 31. 12. 1991, p. 32.

STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 17 July 1995 the Commission forwarded to the Council a proposal for a Directive amending Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions and Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field, based on Article 57 (2) of the EC Treaty.

The European Parliament delivered its opinion on 9 May 1996.

In the light of that opinion the Commission presented an amended proposal on 20 June 1996.

2. On 16 December 1996, the Council adopted its common position pursuant to Article 189b of the Treaty.

II. OBJECTIVE

The proposal seeks to set up a Securities Committee and to transfer to the Commission, assisted by that Committee, the implementing powers envisaged in Article 10 of Directive 93/6/EEC and Article 29 of Directive 93/22/EEC and to amend the notification arrangements provided for in those Directives.

III. ANALYSIS OF THE COMMON POSITION

1. The Committee will have two main roles:

- a regulatory role, assisting the Commission whenever the Council confers on it implementing powers in any of the acts it adopts in the securities field,

- an advisory role, consisting in examining the application of the Directives and assisting the Commission in the preparation of new legislative proposals in this field.

2. The common position maintains the essential thrust of the Commission original and amended proposals but introduces certain changes, set out below, in order to ensure coherence with existing community legislation.

A. The recitals

Apart from amendments to the recitals of the amended Commission proposal which are consequent on the amendments to the enacting terms, the recitals of the common position:

- do not include the first recital of the amended Commission proposal, which the Council considers superfluous,

- highlight, in a new 10th recital, the need for cooperation between the Securities Committee and the Banking Advisory Committee and the Insurance Committee,

- do not include a recital referring to the modus vivendi between the European Parliament, the Council and the Commission concerning the implementing measures for acts adopted in accordance with the procedure laid down in AAAArticle 189b of the Treaty (1), since the Council considers such a recital unnecessary; the common position thus does not include amendment No 2 proposed by the European Parliament.

B. The enacting terms

With a view to making the text more transparent, the common position regroups all the amendments to Directive 93/6/EEC and to Directive 93/22/EEC in Articles 1 and 2 respectively, and sets them out in the order of the Articles of the Directive which is being amended. Articles 3 and 4 of the amended Commission proposal have thus been incorporated in Articles 2 and 1, respectively, of the common position.

In order to avoid legal uncertainty, the common position makes it clear that only one Securities Committee is being established. The provisions relating to the establishment and to the rules of procedure of the Committee are therefore set out in Directive 93/6/EEC, while the Articles relating to procedure in Directive 93/22/EEC do not establish a Committee but contain a reference to the Committee established by Article 10a of Directive 93/6/EEC.

In order to follow as closely as possible the precedents in the Banking Advisory Committee, set up by Directive 77/780/EEC (2), and the Insurance Committee, set up by Directive 91/675/EEC (3) the Committee procedure III (b) of Decision 87/373/EEC (4) has been introduced into the text of the common position, and the recitals have been adapted accordingly. The common position does not therefore include amendments Nos 1, 3 and 4 proposed by the European Parliament which all relate to the choice of Committee procedure.

The drafting of the new Article 10b of Directive 93/6/EEC and of the new Article 29b of Directive 93/22/EEC has been aligned on the corresponding Article (Article 3) of Directive 91/675/EEC, stressing the advisory role of the Committee, and the corresponding recital has been modified accordingly. In line with Directive 91/675/EEC the common position also makes clear, in the new Article 10a (2) of Directive 93/6/EEC, that the new Securities Committee shall adopt its own rules of procedure.

Compared with the amended Commission proposal, the common position also adds a few technical modifications to Article 2 (12), fifth paragraph, Article 7 (9), Annex III (9) and Annex VI (9) of Directive 93/6/EEC, which the Council finds necessary following the establishment of the Securities Committee.

Finally, the common position introduces a provision on the entry into force of the Directive.

IV. CONCLUSIONS

The Council considers that all the amendments made to the Commission proposal are fully in keeping with the aims of the Directive. The choice of a different committee procedure to that proposed by the Commission and the highlighting of the advisory role of the Securities Committee have been introduced in order to secure the maximum degree of coherence with the similar committees set up in the neighbouring sectors of banking and insurance.

(1) OJ No C 293, 8. 11. 1995, p. 1.

(2) OJ No L 322, 17. 12. 1977, p. 30.

(3) OJ No L 374, 31. 12. 1991, p. 32.

(4) OJ No L 197, 18. 7. 1987, p. 33.