22. 2. 89 Official Journal of the European Communities No C 43/7 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Directive on investment services in the securities field 
COM(88) 778 - SYN 176 
(Submitted by the Commission on 3 January 1989) 
(89/C 43/10) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 57 
thereof, 
Having regard to the proposal from the Commission, 
In cooperation with the European Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas this Directive is to constitute an instrument 
which is essential for achieving the internal market, a 
course determined by the Single European Act and set 
out in timetable form in the Commission's White Paper, 
from the point of view of both the freedom of estab­
lishment and the freedom to provide financial services, in 
the field of investment firms; 
Whereas the approach which has been adopted is to 
achieve only the essential harmonization necessary and 
sufficient to secure mutual recognition of authorization 
and of supervisory systems, thus enabling the application 
of the principle of home country control and the 
granting of a single authorization recognized throughout 
the Community; 
Whereas it is necessary, for reasons of fair competition, 
to ensure that non-bank investment firms have similar 
freedoms to create branches and provide services across 
frontiers as those envisaged by'the proposal for a second 
Council Directive in the field of credit institutions; 
Whereas it is also necessary and appropriate to liberalize 
access to membership of stock exchange and financial 
futures and options markets in host Member States for 
investment firms authorized to carry out the relevant 
services in their home Member States; Whereas responsibility for the financial soundness of an 
investment firm will rest with the competent authorities 
of its home Member State; whereas to permit this 
responsibility fully to be assumed by such competent 
authorities a further directive will be necessary to coor­
dinate rules in the area of market risk; 
Whereas it is essential for the creation of the internal 
market for the home country supervisors to monitor all 
aspects of the investment firm's activities in host Member 
States whether such activities are carried on by the 
provision of services or the creation of branches there; 
Whereas the Member States should ensure that there are 
no obstacles to the activities coming within the scope of 
this Directive being undertaken using the financial tech­
niques of the home Member State, so long as the latter 
are not in violation of the legal provisions governing the 
public good in the host Member State; 
Whereas requests for authorization of a subsidiary whose 
parent is governed by the laws of a third country or the 
acquisition of a participation by such a parent are subject 
to a procedure intended to ensure that Community 
investment firms are granted reciprocal treatment in the 
third countries in question; 
Whereas the smooth running of the internal market in 
financial services will require, in addition to common 
legislative standards, close and regular cooperation 
between the competent authorities of the Member States; 
Whereas in the case of problems concerning investment 
firms a contact committee is the appropriate forum for 
discussion and consultation; 
Whereas it is necessary, in order to facilitate the 
achievement of the objectives of this Directive and to 
take account of the rapid development of national and 
international financial markets, to introduce a procedure 
for the adaptation of certain technical features; whereas, 
because of the important and sensitive nature of that 
No C 43/8 Official Journal of the European Communities 22. 2. 89 
adaptation, procedure III, type (a), as defined in Article 
2 of Council Decision 87/373/EEC ('), is the most 
appropriate, 
HAS ADOPTED THIS DIRECTIVE: 
TITLE I 
Definitions and scope 
Article 1 
For the purposes of this Directive: 
— 'credit institution' is defined in accordance with the 
first indent of Article 1 of Council Directive 
77/780/EEC (2), 
— 'investment firm' means any natural or legal person 
whose business it is to engage in one or more of the 
activities set out in the Annex to this Directive, 
— 'home Member State' means: 
— where the investment firm is a natural person, the 
Member State where that person has his 
residence, 
— where the investment firm is a legal person, the 
Member State where its registered office is 
situated or if it has no registered office then the 
Member State where its head office is situated, 
— 'host Member State' means the Member State where 
an investment firm has a branch or into which it 
supplies services, 
— 'branch' means a place of business which forms a 
legally dependent part of an investment firm and 
which provides an investment service for which the 
investment firm has been authorized, 
— 'qualified participation' means a holding, direct or 
indirect, in an investment firm which represents 10 % 
or more of the capital or of the voting rights or 
which enables the exercise of a significant influence 
over it within the meaning of Article 33 of Council 
Directive 83/349/EEC (3), 
— 'parent undertaking' is defined in accordance with 
Articles 1 and 2 of Directive 83/349/EEC, 
— 'subsidiary' means a subsidiary undertaking in 
accordance with Articles 1 and 2 of Directive 
83/349/EEC. 
(') OJ No L 197, 18. 7. 1987, p. 33. 
O OJ No L 322, 17. 12. 1977, p. 30. 
O OJ No L 193, 18. 7. 1983, p. 1. Article 2 
This Directive shall apply to all investment firms. 
However, only Articles 3, 4, 5, 8, 9, 10 and 21 shall 
apply to investment firms that are credit institutions. 
Article 3 
Member States must require that investment firms which 
are legal persons shall have their head office in the same 
Member State as their registered office. 
TITLE II 
Harmonization of authorization conditions 
Article 4 
1. Investment firms wishing to engage in one or more 
of the activities referred to in the Annex within one or 
more Member States shall obtain authorization in their 
home Member State before commencing such activities. 
Such authorization shall be granted by the home 
Member State's competent authorities designated in 
accordance with Article 14. Following the granting of 
authorization the investment activity in question may be 
engaged in forthwith by the investment firm together 
with any activities that are ancillary thereto. 
2. Without prejudice to other conditions of general 
application laid down by national law, the competent 
authorities shall not grant authorization unless: 
— the investment firm has sufficient initial financial 
resources having regard to the nature of the activity 
in question, 
— the persons who effectively direct the business of the 
investment firm are of sufficiently good repute and 
experience, 
— holders of qualified participations in it are suitable 
persons. 
3. Member States shall also require applications for 
authorization to be accompanied by a programme of 
operations setting out inter alia the types of business 
envisaged and the structural organization of the 
investment firm. 
4. The applicant shall be notified within three months 
of submission of a complete application whether or not 
authorization is granted. Reasons shall be given 
whenever an authorization is refused. If no decision is 
notified within six months of submission of the complete 
application this shall be deemed to be a refusal. 
22. 2. 89 Official Journal of the European Communities No C 43/9 
5. The authorization referred to in paragraph 1 shall 
not be required where the investment firm is a credit 
institution whose authorization as a credit institution by 
the competent authorities specified in Article 3 of 
Directive 77/780/EEC includes authorization of the 
investment activity concerned. 
6. The competent authorities may withdraw the auth­
orization issued to an investment firm subject to this 
Directive only where the investment firm: 
(a) does not make use of the authorization within 12 
months, expressly renounces the authorization or has 
ceased to engage in business for more than six 
months, if the Member State concerned has made no 
provision for the authorization to lapse in such cases; 
(b) has obtained the authorization through false 
statements or any other irregular means; 
(c) no longer fulfils the conditions under which author­
ization was granted; 
(d) no longer possesses sufficient financial resources or 
can no longer be relied upon to fulfil its obligations 
towards its creditors, and in particular no longer 
provides security for the assets entrusted to it; 
(e) falls within one of the other cases where national law 
provides for withdrawal of authorization. 
Article 5 
Member States shall not apply to branches of investment 
firms having their registered office outside the 
Community, when commencing or carrying on their 
business, provisions that result in more favourable 
treatment than that accorded to branches of investment 
firms having their registered office in a Member State. 
Article 6 
1. Requests for authorization of a subsidiary whose 
parent undertaking is governed by the laws of a third 
country or the acquisition of a participation as provided 
for in paragraph 3 shall be subject to the procedure laid 
down in this Article. 
2. The competent authorities of the relevant Member 
State shall inform the competent authorities of the other 
Member States and the Commission of the request for 
authorization. 
3. In the same manner, when informed, according to 
the provisions of Article 7, that an undertaking governed 
by the laws of a third country is considering the 
acquisition of a participation in a Community investment 
firm such that the latter would become its subsidiary, the 
competent authorities of the relevant Member State shall 
inform the competent authorities of the other Member 
States and the Commission. 4. The competent authorities of the Member State 
concerned must suspend their decision regarding 
requests as referred to in paragraphs 1 and 3 until the 
procedure provided for in paragraphs 5 and 6 is 
completed. 
5. The Commission shall, within three months of 
receiving the information provided for in paragraphs 2 
and 3, examine whether all Community investment firms 
enjoy reciprocal treatment, in particular regarding the 
establishment of subsidiaries or the acquisition of partici­
pations in investment firms in the third country in 
question. 
6. If the Commission finds that reciprocity is not 
ensured it may extend suspension of the decision 
referred to in paragraph 4, using the procedure provided 
for in Article 20. 
7. The Commission shall present suitable proposals to 
the Council with a view to achieving reciprocity with the 
third country in question. 
TITLE III 
Harmonization of conditions relating to the pursuit of 
the business of investment firms 
Article 7 
1. Member States shall require any natural or legal 
person who is considering the acquisition of a qualified 
participation in an investment firm to first inform the 
competent authorities, telling them of the size of the 
intended participation. The abovementioned persons 
must similarly inform the competent authorities if they • 
propose to increase their qualified participation such that 
the investment firm would become a subsidiary. The 
competent authorities shall assess the suitability of the 
abovementioned persons. 
2. Investment firms shall each year furnish the 
competent authorities of the home Member State with 
the names of major shareholders and members as 
referred to in paragraph 1 and the size of their qualified 
participations, in accordance with the names registered 
at the annual general meeting of shareholders and 
members or in accordance with information received as a 
result of compliance with the regulations relating to 
companies quoted on stock exchanges. 
3. Member States shall require that in cases where the 
persons referred to in paragraph 1 exercise their 
influence in a way which is likely to be to the detriment 
of the prudent and sound management of the activities 
of the investment firm, the competent authorities shall 
take appropriate measures to bring such a situation to an 
end. Such measures may consist in particular in 
injunctions, sanctions against directors and managers or 
the suspension of voting rights in respect of the shares 
held by the shareholders or members in question. 
No C 43/10 Official Journal of the European Communities 22. 2. 89 
Article 8 
1. The competent authorities of the home Member 
State shall require continuing compliance by an 
investment firm authorized by them with the conditions 
referred to in Article 4 (2). In appropriate circumstances, 
the competent authorities may allow an investment firm 
a certain limited period to restore its financial resources 
to the agreed initial minimum. The competent authorities 
of the home Member State shall also require that 
investment firms authorized by them make sufficient 
provision against market risk in accordance with rules to 
be prescribed in a further coordinating directive. 
2. The supervision of compliance with the conditions 
referred to in Article 4 (2) shall be within the exclusive 
regulatory competence of the home Member State's 
competent authorities irrespective of whether or not the 
investment firm establishes a branch or provides services 
in another Member State. 
Article 9 
1. Member States shall draw up prudential rules to be 
observed on a continuing basis by investment firms auth­
orized by their competent authorities. Supervision of 
such prudential rules shall be within the exclusive 
competence of the home Member State's competent 
authorities irrespective of whether or not the investment 
firm establishes a branch or provides services in another 
Member State. Such rules shall require that the 
investment firm: 
— has sound administrative and accounting procedures 
and internal control mechanisms, 
— arranges for securities belonging to investors to be 
kept separately from its own securities and for money 
belonging to investors to be placed in an account or 
in accounts which are separate and distinct from the 
firm's own account, 
— is either a member of a general compensation scheme 
designed to protect investors who are prevented from 
having claims satisfied because of the bankruptcy or 
default of the investment firm or makes individual 
arrangements which provide investors with equivalent 
protection. Pending further harmonization of 
compensation schemes branches of investment firms 
shall be subject to the compensation scheme in force 
in the host Member State provided that payment or 
contribution to such a compensation scheme shall be 
calculated by reference to their income in respect of 
investment activity carried out in that State, 
— provides the competent authorities of the home 
Member State with such information on request and 
at such intervals as they may determine (but not less 
than quarterly) in order that they may assess its 
financial soundness, including the adequacy of its 
provision in respect of market risk, — arranges for adequate records to be kept relating to 
executed transactions which shall be at least sufficient 
to enable the home Member State's authorities to 
monitor compliance with prudential rules which they 
are responsible for applying including rules relating 
to market risk. Such records shall be retained for 
periods to be laid down by the competent authorities, 
— is organized in such a way that conflicts of interest 
between the firm and its clients or between one of its 
clients and another are reduced to a minimum. 
2. If the rules contained in paragraph 1 are not appro­
priate to the nature of the investment service in question, 
Member States may adapt them or provide that they 
shall not apply. 
3. Member States may provide that the rules set out in 
the second and third indents of paragraph 1 shall not 
apply where the service is provided to business or 
professional investors. 
TITLE IV 
Provisions relating to freedom of establishment and 
freedom to provide services 
Article 10 
1. Host Member States shall ensure that at least the 
activities set out in the list in the Annex and any activities 
which are ancillary thereto may be pursued in their terri­
tories, in accordance with the provisions of Articles 11, 
12 and 13, either by the establishment of a branch or by 
way of the provision of services, by an investment firm 
authorized to engage in such activities under this 
Directive by the competent authorities of its home 
Member State. 
2. Host Member States may not make the estab­
lishment of a branch or the provision of services under 
paragraph 1 subject to an authorization requirement or 
to a requirement to provide endowment capital or any 
measure having equivalent effect. 
3. Host Member States shall ensure that investment 
firms which are authorized to provide broking, dealing 
or market-making services in their home Member States 
can enjoy the full range of trading privileges normally 
reserved to members of the stock exchanges and 
organized securities markets of host Member States 
where similar services are provided. 
22. 2. 89 Official Journal of the European Communities No C 43/11 
4. In order to meet their obligation set out in 
paragraph 3, host Member States shall ensure that the 
investment firms referred to in that paragraph have the 
option to become members of host Member States' stock 
exchanges or organized securities markets by setting up 
either a branch or a subsidiary in the host Member State 
which complies with rules governing the structure and 
organization of the relevant host stock exchange or 
organized securities market or by the acquisition of an 
existing member firm. 
5. Pending further harmonization, host Member 
States which do not accept credit institutions as members 
of their stock exchanges or organized securities market 
are not required to accept, as members, branches of 
those investment firms referred to in paragraph 3 which 
are credit institutions. 
6. Host Member States shall likewise ensure that 
investment firms which are authorized to deal in 
financial futures and options in their home Member 
State can enjoy the full range of trading facilities on 
financial futures and options exchanges in the host 
Member State under the same conditions as are set out 
in paragraphs 3, 4 and 5. 
Article 11 
1. An investment firm wishing to establish a branch in 
the territory of another Member State shall give notifi­
cation thereof to the competent authorities of the home 
Member State and relevant host Member State. At the 
same time it must send the latter authorities: 
(a) an attestation by the competent authorities of the 
home Member State to the effect that the investment 
firm is duly authorized there in respect of the 
investment service proposed to be provided and that 
it otherwise fulfils the conditions imposed by this 
Directive; 
(b) a programme of operations setting out inter alia the 
types of business envisaged and the structural organ­
ization of the branch; 
(c) the names of the managers of the branch; 
(d) the address in the host Member State from which 
documents can be obtained. 
2. An investment firm may establish a branch in the 
other Member State one month after the notification 
referred to in paragraph 1. 
3. An investment firm wishing to change any of the 
matters notified pursuant to paragraph 1 shall give 
written notice of the proposed change to the competent 
authorities in the host Member State at least one month 
before making the change. If necessary those authorities 
may decide whether it will not be possible, in the interest 
of the public good, for the investment firm to engage in any additional activities which it may envisage which are 
not precluded under the conditions of authorization in 
its home Member State and which are not contained on 
the list in the Annex. 
Article 12 
1. Any investment firm wishing to exercise the 
freedom to supply services in the territory of another 
Member State for the first time shall notify the 
competent authorities of the home and host Member 
States of the activities included in the list in the Annex 
which it intends to undertake. 
2. The investment firm may begin to provide such 
services and any activities which are ancillary thereto in 
the host Member State one month after notification. 
Article 13 
1. If the competent authorities of the host Member 
State ascertain that an investment firm having a branch 
or providing services in the territory of that Member 
State is not complying with the legal provisions in force 
therein which are justified on the the grounds of the 
public good, those authorities shall request the 
investment firm concerned to put an end to the irregular 
situation. 
2. If the investment firm concerned fails to take the 
necessary steps, the competent authorities of the host 
Member State shall inform the competent authorities of 
the Member State accordingly. The authorities of the 
home Member State shall take, in the shortest time 
possible, all appropriate measures to ensure that the 
investment firm concerned puts an end to the irregular 
situation. The nature of those measures shall be 
communicated to the competent authorities of the host 
Member State. 
3. If, despite the measures taken by the home Member 
State pursuant to paragraph 2, or because such measures 
prove inadequate or are not taken by the Member State 
in question, the investment firm persists in violating the 
legal rules referred to in paragraph 1 in force in the host 
Member State, the latter State may, after informing the 
competent authorities of the home Member State, take 
appropriate measures to prevent further irregularities 
including, in so far as is necessary, the prevention of the 
initiation of further transactions by that investment firm 
within its territory. Member States shall ensure that 
within their territory it is possible to serve the legal 
documents necessary for those measures on investment 
firms. 
4. Any measures adopted pursuant to paragraphs 1, 2 
and 3 involving penalties or restrictions on the provision 
of services must be properly justified and communicated 
to the investment firm concerned. Every such measure 
shall be subject to a right to apply to the courts in the 
Member State whose authorities adopted it. 
No C 43/12 Official Journal of the European Communities 22. 2. 89 
5. Before following the procedure set out in para­
graphs 1, 2 and 3 the competent authorities of the host 
Member State may, in exceptional circumstances, take 
measures necessary to protect the interests of investors 
and others to whom services are provided. The 
Commission and the other Member States shall be 
informed of such measures in the shortest possible time. 
In this event the Commission may, after consulting the 
Member States concerned, decide that the Member State 
in question shall amend or abolish the measures. 
6. In the event of withdrawal of authorization the 
competent authorities of the host Member State shall be 
informed and shall take appropriate measures to prevent 
the investment firm concerned from undertaking further 
transactions in the territory of that Member State. 
7. Member States shall inform the Commission of the 
number and type of cases in each Member State in which 
measures have been taken in accordance with the 
provisions of paragraph 3. Every two years, the 
Commission shall submit a report summarizing such 
cases to the committee set up under Article 20. 
TITLE V 
Provisions concerning the authorities responsible for 
authorization and supervision 
Article 14 
1. The Member States shall designate the authorities 
which are to carry out the duties provided for in this 
Directive. They shall inform the Commission thereof, 
indicating any division of duties. 
2. The authorities referred to in paragraph 1 must be 
public authorities or bodies appointed by public 
authorities. 
3. The authorities concerned must be granted all the 
powers necessary to carry out their task. 
Article 1") 
1. Where there are several competent authorities in 
the same Member State they shall collaborate closely in 
order to supervise the activities of investment firms 
operating there. 
2. Member States shall also permit such collaboration 
to take place between such competent authorities and 
public authorities responsible for the supervision of credit 
and other financial institutions and insurance companies 
as regards the respective entities supervised by them. 
3. Where investment services are provided on a 
services basis across frontiers or by the establishment of 
branches in one or more Member States other than the 
home Member State the competent authorities of the 
Member States concerned shall collaborate closely in order to supervise the activities of the investment firms 
concerned. They shall supply one another on request 
with all information concerning the management and 
ownership of such investment firms that is likely to 
facilitate their supervision and the examination of the 
conditions for their authorization and all information 
likely to facilitate the monitoring of such firms. 
Article 16 
1. Host Member States shall ensure that, where an 
investment firm authorized in another Member State 
conducts its business there through a branch, the 
competent authorities of the home Member State are 
able, after having first informed the competent auth­
orities of the host Member State, to carry out themselves 
on-the-spot verification of the information referred to in 
Article 15 (3). 
2. This Article shall not affect the right of the 
competent authorities of the host Member State to carry 
out on-the-spot verification of branches established in 
their territory in the discharge of their responsibilities 
under this Directive. 
Article 17 
1. Member States shall ensure that all persons now or 
in the past employed by the competent authorities, as 
well as auditors or experts acting on behalf of the 
competent authorities, are bound by the obligation of 
professional secrecy. This means that any confidential 
information which they may receive in the course of 
their duties may not be divulged to any person or 
authority, without prejudice to cases covered by criminal 
law. 
2. Notwithstanding paragraph 1, the competent auth­
orities of the various Member States and the public auth­
orities responsible for the supervision of credit and other 
financial institutions shall be authorized to exchange 
information in accordance with the provisions of this 
Directive where appropriate for the efficient discharge of 
their respective responsibilities. This information shall be 
subject to the same conditions of professional secrecy as 
those indicated in paragraph 1. 
3. Member States may conclude cooperation 
agreements, providing for exchanges of information, 
with the competent authorities of third countries only if 
the information communicated is subject to guarantees 
of professional secrecy equivalent to those referred to in 
this Article. 
4. The authorities receiving information under para­
graphs 1 or 2 shall use it only: 
— to examine the conditions for the taking-up of the 
business of the entities supervised by them and to 
facilitate monitoring of the pursuit of such business, 
the administrative and accounting procedures and 
mechanisms of internal control, or 
22. 2. 89 Official Journal of the European Communities No C 43/13 
— when the decisions of the authorities are the subject 
of an administrative appeal, or 
— in court proceedings initiated pursuant to Article 18. 
5. Paragraphs 1 and 4 shall not preclude within a 
Member State or between Member States the exchange 
of information between the competent authorities and 
persons responsible for carrying out statutory audits of 
the accounts of investment firms. 
The authorities and institutions to which such infor­
mation is sent shall use it only in the discharge of their 
supervisory functions. The information received shall fall 
within the professional secrecy rules by which those 
authorities and institutions are bound. 
6. Notwithstanding paragraph 1, Member States may 
authorize, by virtue of provisions laid down by law, the 
disclosure, when it is necessary for reasons of prudential 
control, of certain information to other departments of 
their central government administration. Member States 
shall ensure that information received in accordance with 
paragraph 2 is not disclosed in such cases, except where 
there is the explicit consent of the authorities which have 
communicated the information. 
7. Member States shall ensure that the professional 
secrecy provisions laid down by this Article shall apply to 
information given by the competent authorities to 
persons responsible for carrying out statutory audits of 
the accounts of investment firms. 
Article 18 
Member States shall ensure that decisions taken in 
respect of an investment firm in pursuance of laws, regu­
lations and administrative provisions adopted in 
accordance with this Directive may be subject to the 
right to apply to the courts. The same shall apply where 
an application for authorization is deemed to be refused 
in accordance with Article 4 (4). 
Article 19 
Member States shall ensure that their respective 
competent authorities may adopt, as against investment 
firms or those who effectively control the business of 
such firms which breach legislative, regulatory or admin­
istrative provisions concerning the control of their busi­
nesses or the pursuit of their activities, penalties or 
measures aimed specifically at ending observed breaches 
or the causes of such breaches. Those penalties shall 
include procedures for the suspension or withdrawal of 
authorizations. TITLE VI 
Final provisions 
Article 20 
1. Technical amendments to this Directive in the 
following areas: 
— extension of the activities on the list set out in the 
Annex, 
— the fields in which the competent authorities must 
exchange information, as enumerated in Article 15, 
shall be made according to the procedure set out in 
paragraph 2. 
2. The Commission shall be assisted by a committee 
composed of representatives of the Member States and 
chaired by a representative of the Commission. 
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 in the manner set out 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 to be laid down in each act 
to be adopted by the Council under this paragraph but 
which may in no case exceed three months from the day 
of referral to the Council, the Council has not acted, the 
proposed measures shall be adopted by the Commission. 
Article 21 
1. Investment firms already authorized to provide 
investment services in their home Member State before 
the entry into force of the provisions adopted in 
implementation of this Directive shall be deemed to be 
authorized for the purposes of this Directive provided 
that the authorization was given under equivalent 
conditions to those set out in Article 4 (2). 
No C 43/14 Official Journal of the European Communities 22. 2. 89 
2. Branches which have commenced their activities, in 
accordance with the provisions in force in the host 
Member State, before the entry into force of the 
provisions adopted in implementation of this Directive 
are presumed to have been subject to the procedures 
envisaged in Article 11 (1), (2) and (3). They shall be 
governed, from the date of entry into force of the 
provisions adopted in implementation of this Directive, 
by the provisions of Articles 10, 11 (3) and 13. 
3. Article 12 shall not adversely affect rights acquired 
before the entry into force of the provisions adopted in 
implementation of this Directive by investment firms 
operating through the supply of services. Article 22 
1. Member States shall bring into force the laws, 
regulations and administrative provisions necessary to 
comply with this Directive by 1 January 1993. They shall 
forthwith inform the Commission thereof. 
2. Member States shall communicate to the 
Commission the texts of the main laws, regulations and 
administrative provisions which they adopt in the field 
covered by this Directive. 
Article 23 
This Directive is addressed to the Member States. 
ANNEX 
INVESTMENT ACTIVITIES COMING WITHIN THE SCOPE OF THIS DIRECTIVE 
SECTION A 
Activities 
1. Brokerage, i.e. the acceptance of investors' orders relating to any or all of the instruments referred to in 
Section B below and/or the execution of such orders on an exchange or market on an agency basis 
against payment of commission. 
2. Dealing as principal, i.e. the purchase and sale of any or all of the instruments referred to in Section B 
below for own account and at own risk with a view to profiting from the margin between bid and offer 
prices. 
3. Market making, i.e. maintenance of a market in any or all of the instruments referred to in Section B 
below by dealing in such instruments. 
4. Portfolio management, i.e. the management against payment of portfolios composed of any or all of the 
instruments referred to in Section B below undertaken for investors otherwise than on a collective basis. 
5. Arranging or offering underwriting services in respect of issues of the instruments referred to in point 1 
of Section B below and distribution of such issues to the public. 
6. Professional investment advice given to investors on an individual basis or on the basis of private 
subscription in connection with any or all of the instruments referred to in Section B below. 
7. Safekeeping and administration of any of the instruments referred to in Section B below otherwise than 
in connection with the management of a clearing system. 
SECTION B 
Instruments 
1. Transferable securities including units in undertakings for collective investment in transferable securities. 
2. Money market instruments (including certificates of deposit and Eurocommercial paper). 
3. Financial futures and options. 
4. Exchange rate and interest rate instruments.