AMENDED PROPOSAL FOR A SECOND COUNCIL DIRECTIVE ON THE COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS RELATING TO THE TAKING-UP AND PURSUIT OF THE BUSINESS OF CREDIT INSTITUTIONS AND AMENDING DIRECTIVE 77/780/EEC
Date: 1989-05-29
Institutions: European Commission
Subjects: approximation of laws, credit institution, financial institution, industrial capital, intra-EU relations, third country

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM  C89) 190  final  SYN  120 

Brussels,  29  May  1989 

••6JJ&! 

AMENDED PROPOSAL  FOR A SECOND COUNCIL DIRECTIVE 
ON THE COORDINATION OF LAWS, REGULATIONS  AND 
ADMINISTRATIVE  PROVISIONS RELATING TO THE TAKING-UP  AND 
PURSUIT OF THE BUSINESS OF CREDIT  INSTITUTIONS 
AND AMENDING  DIRECTIVE  77/780/EEC 

(presented  by the Commission pursuant  to the 
third  paragraph  of Article  149 of the  EEC  Treaty) 

GoV«  tfo 

AMENDED  PROPOSAL  FOR A 

SECOND BANKING COORDINATION DIRECTIVE 

1. Explanatory  memorandum 

1. On  the  23th  of  February  1988  the  Commission  submitted  to  the  Council  a 

proposal  for  a  Second  Council  Directive  on  the  coordination  of  laws, 

regulations and  administrative  provisions  relating  to  the  taking-up  and 

pursuit  of  the  business  of  credit  institutions  and  amending  Directive 
77/780/EEC<1>. 

2. The  Economic  and  Social  Committee  delivered  its opinion*2) at  its  258th 

session  held  in  Brussels  on  29  September  1988  and  the  European 
Parliament  delivered  its opinion at  its session of  15 March  1989( 3 ). 

3. An  amended  proposal  has been drawn up  in order  to  take  into account  the 

opinion  delivered  by  these  two  institutions.  Both  the  European 

Parliament  and  the Economic  and  Social  Committee  have  endorsed  the  need 

for  a  Second  Banking  Coordination  Directive  which  together  with 

Directive  on  own  funds  of  credit  institutions  and  the  proposal  for  a 

solvency  ratio  for  credit  institutions  are  the  key  components  of 

harmonisation necessary  for  the achievement  of mutual  recognition. 

4. The Commission  was able  to accept  most  of  the amendments  proposed  by  the 

European  Parliament  which  clarify  and  strengthen  the  provisions 

regarding prudential  supervision. 

TT5 
OJ No L 322,  17.12.1977, p. 30 
(2)  OJ  NO C 318, 12.12.1988, p. 42 
(3) 

-  2 -

Recital  14 

The  amendment  regarding  the mutual  recognition  of  financial  techniques  in 

the  field  of  mortgage  credit  was  asked  by  the  European  Parliament;  it 

clarifies the purpose of  this recital. 

Article 4 

This  amendment  reinforces  the  provision  relating  to  the  supervision  of 

major  shareholders.  Thus  it  ensures  that  the  banking  supervisory 

authorities  are  bound  to  refuse  the  granting  of  a  banking  license  if  they 

consider  that  shareholders  or  members  are  not  suitable  persons,  and  could 

endanger  the sound  and  prudent  management  of  the credit  institution. 

Article  7 

The  proposed  amendment  to Article  7 will  simplify  its application  and  will 

clarify  the  reciprocity  provisions  governing  the  establishment  in  the 

Community  of  subsidiaries  of  banks  from  non-Community  countries.  The  main 

elements of  the revised  reciprocity provisions  in the banking  sector  are  as 

fol lows: 

requests  for  authorisation  by  non-EC  banks  have  to  be  notified  to 

the Commission  by Member  States, but  no automatic suspension  is provided 

for  during  the Commission  enquiries on  the situation of Member  countries 

banks  in the relevant  countries; 

-  the  Commission  will  examine  how  Community  banks  are  treated  in  third 

countries  periodically  with  a  first  report  before  the  Directive  comes 

into effect; 

-  where  the  Commission  finds  that  a  third  country  is  not  granting  the 

Community's 

credit 

institutions  market 

access 

and 

competitive 

opportunities  comparable  to  those  granted  by  the  Community  to  non-EEC 

banks,  then  the Commission  may  submit  suitable  proposals  to  the Council 

for  negotiations with  the third  country  in question. 

-  3 -

-  where  it seems  to  the Commission  that  the Community's  banks  do not  enjoy 

"national  treatment"  and  the same  competitive opportunities as  the  third 

countries' own  credit  institutions,  and  that  the  condition  of  effective 

market  access  has not  been  secured,  the Commission  may  "limit  or  suspend 

new  authorisations  and  acquisitions  by  a  parent  undertaking  governed  by 

the  third  country  in question". 

The  new  article  makes  clear  that  "national  treatment"  must  really  work  in 

practice,  ensuring  effective  market  access  in  the  third  country.  There  may 

be  situations  where  on  the  face  of  it  the  Community  institution  is  given 

the  same  rights  of  establishment  as  a  domestic  bank,  but  is excluded  from 

the  market  by  other  means.  In  these  circumstances  the  Commission  would  be 

able  to  act.  But  any  country  providing  genuine  national  treatment  to 

Community  banks would  be under  no  threat. 

Article  16 § 1 

First  paragraph 

This  amendment  states  clearly  what  was  already  mentioned  in  recital  14  of 

the  Directive  regarding  the  mutual  recognition  of  financial  techniques. 

Host  Member  States  could,  however,  prohibit  the  provision  of  certain 

banking  services  or  products,  if  they  can  prove  that  the  provision  of  such 

services  or  products would  violate  the general  good  as  it  is defined  in the 

European  Court's  jurisprudence. 

Second  paragraph 

This  provision  is considered  necessary  in order  to  accomodate  the  problems 

encountered  by  a  number  of  regional  savings  banks  in  Germany  which  are 

confined  under  the  terms  of  their  licences  to  operating  within  a  limited 

geographical  area. The German  Government  wants  to retain  the  right  of  their 

banking  authorities  to  impose  such  territorial  limits and  the  saving  banks 

in  question  apparently  prefer  to  preserve  the  existing  arrangements.  The 

-  4 -

derogation  provided  by  new  amendment  to  the  general  rules  of  Article  16 § 

1,  i.e.  the  right  for  credit  institutions  to provide  services  on  the  whole 

territory  of  the Community,  is proposed  subject  to  the  provisions  that  (a) 

the  local  banks  in  question  remain  subject  to  all  the  prudential 

requirements  imposed  by Community  legislation,  (b) there  are no barriers  to 

competition  from banks having  their  head office  in other  Member  States. 

Article  19 § 3 

This  amendment  makes  it  clear  that  any  duly  authorised  credit  institution 

must  be  allowed  full  access  to all  the normal  means of  mass-advertising  of 

its  services  and  products,  in  particular  all  forms  of  television  and 

newspapers  advertisement.  This  would  be 

in  accordance  with 

the 

jurisprudence  of  the  European  Court  most  recently  expressed  in  the  Bond 

Van Adverteerders  Judgement  and  would  remove  any  doubt,  which  might  exist. 

It would  remain  open  to Member  States  to  regulate  the  form  and  content  of 

advertisements  and  also  to  control  such  practices  as  doorstep-selling  or 

"cold-calling", where  such  regulations  are  justified  by  the general  good. 

List  of  banking  activities 

The amendments  regarding  some  items of  the  list  are considered  necessary  in 

order  to  clarify  the  text  and  to  bring  it  more  closely  in  line  with  the 

list  of  services  annexed  to  the  proposal  for  an  Investment  Services 

Directive  which  are  more  and  more  frequently  also  performed  by  banks  in 

most  of  the Member  States. 

AMENDED  PROPOSAL  FOR A SECOND COUNCIL  DIRECTIVE 
ON THE COORDINATION OF LAWS, REGULATIONS AND 
ADMINISTRATIVE  PROVISIONS RELATING TO THE TAKING-UP  AND 
PURSUIT OF THE BUSINESS OF CREDIT  INSTITUTIONS 
AND AMENDING DIRECTIVE  77/780/EEC 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Preamble  and  recitals 1 to 13 unchanged 

Recital  14 

Recital  14 

Whereas, the Member  States should  ensure 

Whereas,  the  Member  States  should 

that  there  are  no  obstacles  to  the 

ensure  that  there  are  no  obstacles  to 

activities 

benefiting 

from 

mutual 

the  activities  benefiting  from  mutual 

recognition  being  undertaken  using  the 

recognition  being  undertaken  using  the 

financial  techniques  of  the  home  Member 

financial  techniques of  the home Member 

State,  as  long as  the  latter  are not  in 

State, as  long as the  latter  are not  In 

violation  of  the 

legal 

provisions 

violation  of  the  legal  provisions 

governing  the  public  good  In  the  host 

governing  the  general  good  in the  host 

Member  State; 

Member  State.  In  this  respect  the 

present  directive  should  be  seen  In 

conjunction  with  the  Council  Directive 

on  the freedom of establishment  and  the 

right  to provide  services  In the  field 

of  mortgage  credit,  which  lays  down 

provisions 

regarding 

the 

mutual 

recognition of  financial  techniques; 

Remainder  of  the recitals unchanged 

HAS ADOPTED THIS DIRECTIVE: 

-  2 -

Articles 1 to 3 unchanged 

Article  4 

Article  4 

Competent  authorities  shall  not  grant 

Competent  authorities  shall  not  grant 

authorization  permitting  the  taking-up 

authorization  permitting  the  taklng-up 

of  the  business  of  a  credit  institution 

of  the business of  a credit  institution 

before  they  have  been  Informed  of  the 

before  they  have  been  Informed  of  the 

Identity  of  shareholders  or  members, 

identity  of  shareholders  or  members, 

whether  direct  or  Indirect,  be  they 

whether  direct  or  indirect,  be  they 

physical  or  legal  persons,  holding  a 

physical  or  legal  persons,  holding  a 

qualified  participation  and  of  the 

qualified  participation  and  of  the 

amount  of  such  participations.  The 

amount  of  such  participations.  The 

competent  authorities shall  appraise  the 

competent  authorities  shall  not  grant 

suitability 

of 

the 

abovementloned 

authorization  If,  taking  Into  account 

shareholders or members. 

the  need  to assure  a  sound  and  prudent 

management  of  the  credit  Institution, 

they  are  not  satisfied  as  to  the 

suitability 

of 

the 

abovementloned 

shareholders or members. 

Articles 5 and 6 unchanged 

- 3 -

TITLE 2 A 
Reciprocity 

Article 7 

Article 7 

1.  Requests  for  authorization  of  a 

1.  The  competent  authorities  of the 

subsidiary  whose  parent  undertaking  Is 

Member 

States 

shall 

Inform  the 

governed  by the laws of a  third  country 

Commission  (a)  of  any  request  for 

or  the  acquisition  of  a  participation 

authorization  of  a  subsidiary  whose 

therein  as provided  for  in  paragraph  3 

parent  undertaking  or  undertakings  Is 

shall  be subject  to the procedure  laid 

governed by the laws of a third  country 

down  in this Article. 

and  of  the  Identity  of  the  ultimate 

parent,  or  (b)  whenever 

such  an 

undertaking  acquires  participation  In a 

credit  Institution of the Community, so 

that  the  latter  would  become  Its 

subsidiary. The Commission  shall  Inform 

the other  Member  States. 

When  authorization  is  granted  to  a 

subsidiary  the identity of the ultimate 

parent  undertaking or undertakings  must 

be  specified  In the notification  which 

the  competent  authorities  must  address 

to the Commission,  according  to Article 

3.  paragraph 

7.  of  the  Directive 

77/780/EEC. 

2.  The  competent  authorities  of  the 

2.  The Member  States  shall  Inform the 

relevant  Member  State  shall  inform the 

Commission  of  any  general  difficulties 

competent 

authorities  of  the  other 

encountered 

Member  States  and the Commission of the 

Institutions 

bjr 

In 

their 

credit 

establishing 

or 

request  for authorization. 

carrying  out banking  activities  In any 

third  country. 

:*-•-. ï à ç - - r - i » wv 

_ 4 -

3.  In  the  same  manner,  when  Informed, 

3.  The  Commission  shall,  initially  not 

according  to  the  provisions  of  Article 

later  than  six  months  before  the 

9,  that  an  undertaking  governed  by  the 

Directive  enters  Into  force  and  then 

laws  of  a  third  country  Is  considering 

periodically, 

draw 

up 

a 

report 

the acquisition  of  a participation  In a 

examining  the  treatment  of  Community 

credit  institution  such  that  the  latter 

credit 

Institutions,  in  the  terms 

would 

become 

Its  subsidiary, 

the 

referred  to  In  paragraphs  4  and  5 

competent  authorities  of  the  relevant 

below,  regarding  the  establishment  and 

Member  state  shall  Inform  the  competent 

carrying out  of banking activities, and 

authorities  of  the  other  Member  States 

the  acquisition  of  participations  In 

and  the Commission. 

credit  institutions of  third countries. 

The  Commission  shall  submit  these 

reports to the Council  of Ministers. 

4.  The  competent  authorities  of  the 

4. Where  It  appears  to  the  Commission, 

Member  State  concerned  must  suspend 

either  on  the  basis  of  the  report 

their  decision  regarding  requests  as 

referred  to  in  paragraph  3  or  at  any 

referred  to  In paragraphs  2 and  3 until 

other  time, that  a third country  Is not 

the procedure provided  for  in paragraphs 

granting  to  credit  institutions  of  the 

5 and 6  Is completed. 

Community  effective  market  access  and 

competitive opportunities comparable  to 

those  accorded  by  the  Community  to 

credit 

Institutions  of  that  third 

country,  the  Commission  may  submit 

suitable  proposals  to  the  Council  with 

a  view  to  achieving  such  comparable 

access  anc  competitive  opportunities 

through 

negotiations 

between 

the 

Community  and  the  third  country  In 

question. 

-  5 -

5.  The  Commission  shall,  within  three 

5. Where  it appears  to  the  Commission, 

months  of  receiving  the  information 

either  on  the  basis  of  the  reports 

provided  for  In  paragraphs  2  and  3 

referred  to  In  paragraph  3  or  at  any 

examine  whether  all  credit  Institutions 

other  time, that  credit  Institutions of 

of  the  Community 

enjoy 

reciprocal 

the  Community  do  not  enjoy  national 

treatment,  in  particular  regarding  the 

treatment  and  the  same  competitive 

establishment  of  subsidiaries  or  the 

opportunities 

as 

domestic 

credit 

acquisition  of  participations  In  credit 

Institutions  In  a  third  country  and 

institutions  in  the  third  country  in 

that  the  condition  of  effective  market 

quest ion. 

access  has  not  been  secured,  the 

Commission  may  In  addition  to  the 

proposals  for  negotiations  referred  to 

In  paragraph 

4  decide 

that 

the 

competent  authorities  of  the  Member 

States  shall  limit  or  suspend  their 

decisions  regarding  requests  for  new 

authorizations  and  acquisitions  by  a 

parent  undertaking  governed  by  the 

third  country  In  question,  using  the 

procedure provided  for  In Article 20. 

The  duration  of  the  measures  concerned 

may  not  exceed  one  year,  though  the 

Commission  may propose  their  renewal. 

6. 

If  the  Commission 

finds  that 

6.  Measures  taken  under  this  article 

reciprocity  is not ensured  if may  extend 

shall  be  subject  to  their  conformity 

suspension  of  the  decision  referred  to 

with  the  Community's  obligations  under 

In  paragraph  4,  using  the  procedure 

any  International  agreements,  whether 

provided  for  In Article 20. 

bilateral or multinational, which  cover 

the operation of credit  Institutions. 

-  6 -

7. The Commission shall  present  suitable 

proposals  to  the Council  with  a  view  to 

achieving  reciprocity  with  the  third 

country  In question. 

Articles 8  to 15 unchanged 

Article 16 

Article  16 

1.  Member  States  shall  ensure  that  at 

1. Member  States shall  ensure  that  (two 

least  the activities set out on  the  list 

words  deleted)  the  activities  set  out 

In  the  Annex  may  be  pursued  In  any 

j_n the  list  in the Annex may be pursued 

Member  State,  in  accordance  with  the 

In any Member  State,  in accordance with 

provisions of  Articles  17  to  19, either 

the  provisions  of  Articles  17  to  19, 

by  the  establishment  of  a  branch  or  by 

either  by  the establishment  of a branch 

way of  the provision of services, by any 

or  by way of  the provision of services, 

credit 

institution 

authorized 

and 

by  any  credit  Institution  authorized 

supervised  by  the  competent  authorities 

and 

supervised 

by 

the 

competent 

of  the  home Member  State,  In  accordance 

authorities  of  the  home  Member  State, 

with  the  provisions  of  this  Directive, 

In  accordance  with  the  provisions  of 

whose  authorization  permits  the  pursuit 

this  Directive,  provided  that  such 

of such activities. 

activities 

are 

covered 

by 

the 

authorization.  Member 

States  shall 

permit 

these 

activities 

to 

be 

undertaken by credit  Institutions using 

the  financial  techniques  of  the  home 

Member  State  as  long  as  the  latter  are 

not 

In 

violation 

of 

the 

legal 

provisions  governing  the  general  good 

In the host Member  State. 

-  7  -

However.  Member  States  may  limit  the 

scope  of  the  authorization  to  only  a 

part  of  their  territory  with  regard  to 

public 

credit 

Institutions 

whose 

business  Is  guaranteed  by  a  regional 

government  or  local  authority.  Such 

limitation shall  not  exempt  such  credit 

Institutions  from  provisions  in  other 

EEC  Directives  related 

to  credit 

Institutions. 

2. Member  States shall  also provide  that 

2. unchanged 

at  least  the  activities  set  out  on  the 

list  In the Annex  may  be  pursued  In any 

Member  State  In  accordance  with  the 

provisions  of  Article  17  to  19,  either 

by  the  establishment  of  a  branch  or  by 

way  of  the provision  of  services  by  any 

financial  Institution  being  a  subsidiary 

of  a  credit  Institution,  or  such  a 

subsidiary  belonging  to  several  credit 

Institutions, 

whose 

articles 

of 

association  do  not  prevent  the  pursuit 

of  those activities and which meets each 

of  the following conditions: 

-  the 

parent 

undertaking 

or 

undertakings are authorized as credit 

institutions  In  the  Member  State  by 

whose  law the subsidiary  Is governed, 

-  the 

parent 

undertaking 

or 

undertakings  hold  90% or  more  of  the 

shares  in the  subsidiary, 

-  8  -

the 

parent 

undertaking 

or 

undertakings  have  declared  that  they 

jointly  and  severally  guarantee  the 

committments  entered  into  by  the 

subsidiary, 

the 

subsidiary 

Is 

effectively 

included, 

In  particular  for  the 

activities 

In  question, 

In  the 

consolidated 

supervision 

of 

Its 

parent  undertaking, or of each of  Its 

parent  undertakings,  In  accordance 

with  Directive  83/350/EEC,  notably 

for  the  calculation  of  the  solvency 

ratio,  for  the  control  of  large 

exposures  and  for  the  purposes  of 

limiting participations  In accordance 

with Article  10 of  this Directive. 

Conformity with these conditions must  be 

verified  by  the  competent  authority  of 

the  home  Member  State  and  the  latter 

must  supply  the  subsidiary  with  a 

certificate  of  compliance  which  must 

form  part  of  the  notification  envisaged 

In Articles  17 and 18. 

The  competent  authority  of  the  home 

Member  State must  ensure  the supervision 

of  the subsidiary  In accordance with  the 

provisions  of  Articles  8(1),  9,  11, 

12(2),  13,  14 and  15 of  this  Directive, 

as  well  as  those  of  Article  7(1)  of 

Directive 77/780/EEC. 

- 9 -

The  provisions  mentioned 

In  this 

paragraph  shall  be  applicable  to 

subsidiaries  subject  to  the  necessary 

modifications.  In  particular,  "credit 

institution"  should  read  "financial 

institution, 

conforming 

to 

the 

conditions  laid down  in Article 16(2)", 

and  "authorization"  as  "articles  of 

association".  In  Article  17(2),  point 

(c) should read "the amount of own' funds 

of  the subsidiary  financial  Institution 

and  the consolidated  solvency  ratio of 

the  credit  Institution  which  Is  the 

parent undertaking". 

If 

the 

financial 

Institutions 

benefitting from the provisions of this 

paragraph  should  cease  to meet  any  of 

the  requisite  conditions,  the  host 

Member  State  may  bring  an  end  to  the 

pursuit,  under  the  provisions  of  this 

Directive, of the activities In question 

on its territory. 

Articles 17 and 18 unchanged 

Article 19 

Article 19 

1. Responsibility for the supervision of 

1. unchanged 

a 

credit 

Institution, 

Including 

supervision  of  activities  undertaken 

according  to  the provisions of  Article 

16,  shall  rest  with  the  competent 

authorities of the home Member State. 

- 10 -

2. Host  Member  States may  require, for 

2. Host Member  States may require, for 

statistical  purposes,  that  all  credit 

statistical  purposes,  that  all  credit 

institutions  having  branches  In  their 

Institutions  having  branches  In  their 

territories  shall  report  quarterly  on 

territories  shall  report  regularly  on 

their  operations  In  the  host  Member 

their  operations  in  the  host  Member 

State to the competent authority of that 

State  to  the  competent  authority  of 

host Member State. 

that host Member State. 

In  order 

to  conform 

with 

the 

responsibilities  laid  down  In  Article 

12(2) and  (3), host  Member  States may 

require 

that  branches  of  credit 

institutions  from  other  Member  States 

provide  the  same  Information  as  they 

require  from  their  national  credit 

Institutions for that purpose. 

3.  If  the  competent  authority  of  the 

3.  If  the  competent  authority  of  the 

host  Member  State  ascertains  that  an 

host  Member  State  ascertains  that  an 

institution having a branch or providing 

Institution  having  a  branch  or 

services  In  Its  territory  Is  not 

providing services  in  Its territory  Is 

complying  with  the  legal  provisions  In 

not complying with the legal provisions 

force  In  that  Member  State  which  are 

In force In that Member State which are 

justified  on  the grounds of  the public 

Justified  by  the  general  good,  or 

good, or  pursuant  to the provisions of 

pursuant  to  the  provisions  of  this 

this  Directive,  on  the  powers  of  the 

Directive, on  the  powers  of  the  host 

host Member State, that authority shall 

Member  State,  that  authority  shall 

request the Institution concerned to put 

request  the  institution  concerned  to 

an end to the Irregular situation. 

put an end to the  Irregular situation. 

Nothing  In this paragraph shall prevent 

credit  Institutions  having  their  head 

office  in  another  Member  State  from 

advertising  their  services  through all 

available means of communication In the 

host Member State, subject to any rules 

governing  the  form  and  the content  of 

such  advertising  Justified  by  the 

general good. 

4.  If the  Institution concerned  falls to 

4. unchanged 

-  11  -

take  the  necessary  steps,  the  competent 

authority of  the host Member  State shall 

Inform 

the 

home 

Member 

State 

accordingly.  The  authority  of  the  home 

Member  state shall  take,  In the shortest 

time  possible,  all  appropriate  measures 

to ensure  that  the  Institution concerned 

puts  an  end  to  the  irregular  situation. 

The  nature  of  those  measures  shall  be 

communicated  to  the  competent  authority 

of  the host Member  State. 

5.  If, despite  the measures  taken by  the 

5. unchanged 

home Member  State  pursuant  to  paragraph 

4,  or  because  such  measures  prove 

inadequate  or  are  not  taken  by  the 

Member 

State 

In 

question, 

the 

Institution  persists  In  violating  the 

legal  rules  referred  to  In  paragraph  3 

In  force  In  the  host  Member  State,  the 

latter  State  may,  after  Informing  the 

competent  authority  of  the  home  Member 

State,  take  appropriate  measures  to 

prevent 

further 

Irregularities 

including,  insofar, as  Is necessary,  the 

prevention  of  the  initiation  of  further 

transactions  by  that  institution  within 

its  territory.  The  Member  States  shall 

ensure  that within  their  territory  It  Is 

possible  to  serve  the  legal  documents 

necessary  for  these  measures  on  credit 

Institutions. 

6.-  Any  measure  adopted  pursuant  to 

6.  unchanged 

-  12 -

paragraphs  3,  4  and 

5 

involving 

penalties 

or 

restrictions 

on 

the 

provision  of  services  must  be  properly 

Justified  and  communicated 

to  the 

institution 

concerned. 

Every 

such 

measure  shall  be  subject  to  a  right  of 

appeal  to the courts  In the Member  State 

whose authorities adopted  It. 

7.  Before  following  the  procedure  set 

7. unchanged 

out  In  paragraphs  3,  4  and  5,  the 

competent  authorities of  the host  Member 

State, 

may, 

In 

exceptional 

circumstances,  take  measures  necessary 

to protect  the  interests  of  depositors, 

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. 

8.  In  the  event  of  withdrawal  of 

8. unchanged 

authorization the competent  authority of 

the host  Member  State  shall  be  Informed 

and  shall  take  appropriate  measures  to 

prevent  the  institution  concerned  from 

undertaking  further  transactions  In  its 

terrItory. 

- 13 -

9.  Member  States  shall 

inform  the 

9.  unchanged 

Commission  of  the  number  and  type  of 

cases  in  each  Member  State  In  which 

there  has  been  a  refusal  pursuant  to 

Article  17  or  in  which  measures  have 

been  taken  In  accordance  with  the 

provisions  of  paragraph  5  of  this 

Article. Every  two years, the  Commission 

shall  submit  a  report  summarizing  such 

cases  to  the  Advisory  Committee  set  up 

under 

Article 

11 

of 

Directive 

77/780/EEC. 

Remainder  of Articles unchanged 

ANNEX 

Business which  Is integral to banking and shall be Included 
within the scope of mututai recognition 

1. Deposit-taking  and  other  forms  of 

1. Deposit-taking  and  other  forms  of 

borrowing 

2. Lending*1* 

borrowing 

2. Lending*1* 

3. Financial  leasing 

3. Financial  leasing 

4. Money transmission services 

4. Money transmission services 

5. Issuing  and  administering  means  of 
payment  (credit  cards,  travellers 
cheques and bankers drafts) 

5. Issuing  and  administering  means  of 
payment  (credit  cards,  travellers 
cheques and bankers drafts) 

6. Guarantees and commitments 

6. Guarantees and commitments 

7. Trading  for  own  account 
account of the customers in 

or  for 

7. Trading  for  own  account  or  for 
account of  the customers  in foreign 
exchange 

(a) money 

market 
(cheques, bills, CDs, etc.) 

instruments 

(b) foreign exchange 
(c) financial futures and options 
and 
(d) exchange 

intereet 

rate 

instruments 

(e) securities 

8  Participations  in  securities  issues 
and the provision of services related 
to such issues 

(1) including in particular: 

- consumer credit, 
- mortgage lending, 
- factoring and  invoice discounting, 
- trade finance (including forfeiting) 

8. investment 

activities2 
(trading 
for  own  account  or  account  of  the 
customersT 
(a) Brokerage,  i.e.  the  acceptance 
of  investors' orders relating to 
any  or  all  of  the  instruments" 
"referred to in footnote 2 and/or" 
"the execution of such orders on 
"an  exchange  or  market  on  an" 
agency basis against  payment of" 
commission. 

(2) Instruments 
- Transferable securities including units 
in undertakings for collecting invest 
ment  in transferable securities. 
- Money market  instruments (including 
certificates of deposit and Euro-
commercial paper) 

- Financial futures and options. 
- Exchange rate and  Intereet rate 

Instruments. 

(b) Dealing  as  principal.  I.e. the 
purchase and eale of any or all 
of  the  instruments  referred  to 
In  footnote  2  for  own  account 
and  at own  risk with  a view  to 
the  margin 
from 
profiting 
between bid and offer prices. 
(c) Market  making.  I.e. maintenance 
of a market  In any or all of the 
Instruments  referred  to  In 
footnote  2  by  dealing  In  such 
Instruments, 

(d) Portfolio  management.  I.e.  the 
management  against  payment  of 
portfolios  composed  of  any  or 
all of  the  Instruments  referred 
to  In footnote  2 undertaken for 
Investors  otherwise  than  on  a 
collectlve basis. 
offering 
or 
underwriting services  In respect 
of  Issues  of  the  Instruments 
referred  to  In  footnote  2  and 
distribution  of  such  Issues  to 
the pub Ilc. 

(e) Arranging 

(f) Professional  Investment  advIce 
given  to  Investors  on  an 
Individual basis or on the basis 
of  private  subscription  In 
connsctlon  with  any  or  all  of 
the  instruments  referred  to  In 
footnote 2. 

(g) Safekeeping  and  admins Itrat Ion 
of  any  of  the  Instruments 
referred  to  In  footnote  2 
otherwise  than  In  connection 
with  the  management  of  a 
clearing system. 

9. Money broking 

9. Money broking 

10. Portfolio management and advice 

11. Safekeeping of securities 

12. Credit reference services 

10. Credit reference services 

13. Safe custody services 

11. Safe custody services 

Commission of the  European  Communities 

COM(89)  190  final 

Amended proposal for  a 

SECOND COUNCIL  DIRECTIVE 

on  the  coordination  of  laws,  regulations  and  administrative  provisions 
relating to the taking-up and pursuit of the business of credit  institutions 
and amending  Directive  77/780/EEC 

(presented  by  the  Commission  pursuant  to  Article  149(3)  of  the  EEC 
Treaty) 

29.5.1989 

Office for  Official  Publications of the  European  Communities 
L - 2985  Luxembourg 

Series:  DOCUMENTS 

1989 — 20 pp. — Format:  21.0 *  29.7  cm 

EN 

ISSN  0254-1475 

ISBN  92-77-50542-7 

Catalogue  number:  CB-CO-89-213-EN-C 

COM(89)  190  final 

ISSN 0254-1475 

DOCUMENTS 

Amended  proposal for  a 

SECOND  COUNCIL  DIRECTIVE 

on the  coordination  of  laws,  regulations  and 
administrative  provisions  relating to  the  taking-
up  and  pursuit  of  the  business  of  credit 
institutions  and  amending  Directive  77/780/EEC 

(presented  by the  Commission  pursuant  to 
Article  149(3) of  the  EEC Treaty) 

06 

18 

Catalogue  number:  CB-CO-89-213-EN-C 

ISBN  92-77-50542-7 

€ 

COMMISSION OF THE EUROPEAN COMMUNITIES 

29.5.1989