Proposal for a EUROPEAN PARLIAMENT AND COUNCIL 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
Date: 1995-07-17
Institutions: European Commission
Subjects: committee (EU), credit institution, exchange of information, financial solvency, securities

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  17.07.1995 
COM(95) 360  final 

95/0188 (COD) 

Proposal  for a 

EUROPEAN PARLIAMENT  AND COUNCIL 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 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. Purpose of this proposal 

This proposal  for a directive seeks to amend  the Commission  proposal  setting  up a Securities 
Committee as well as  Council  Directive 93/6/EEC of  15 March  1993 on the capital adequacy 
of  investment  firms  and  credit  institutions1  (hereinafter  referred  to as the  "Capital  Adequacy 
Directive")  and  Council  Directive  93/22/EEC  of  10 May  1993 on investment  services  in the 
securities  field2  (hereinafter  referred  to  as  the  "Investment  Services  Directive")  in  order  to 
adapt  their  provisions  so  as to  set  up  a  Securities  Committee,  transfer  to  the  Commission, 
assisted by that Committee, the implementing powers envisaged in Articles  10 and 29 of those 
Directives,  and  amend  the  information  and  notification  arrangements  provided  for  in  the 
Directives. 

2. Background 

The  Commission's  proposals  for  the  Capital  Adequacy3  and  Investment  Services  Directives4 
envisaged  the  creation  of  a  committee  to  assist  the  Commission  in  the  exercise  of  certain 
implementing  powers  under  those  directives,  mainly  with  a view to  keeping  the  texts  up to 
date and adapting them to technical progress. 

Committees with a similar role exist in the banking sector, the Banking Advisory  Committee, 
and in the insurance sector, the Insurance Committee. 

' O J N o L H l,  11.6.1993, p. 1. 

2OJNoL141,11.6.1993,p.27. 

3OJ No C 152, 21.6.1990, p.6 and OJ No C 50, 25.2.1992, p.5. 

4OJ No C 43, 22.2.1989, p.7 and OJ No C42, 22.2.1990, p.7. 

When  the  Council  adopted  common  positions  on  the  Capital  Adequacy  and  Investment 
Services  Directives,  and  subsequently  adopted  the  said  Directives  definitively,  it  decided  to 
split  the  contents  of  the  proposal,  putting  to  one  side  the  provisions  of  the  Commission 
proposals establishing the committee and to retain for itself on a provisional  basis the relevant 
implementing  powers.  This  was  clearly  intended  to  be  a  temporary  arrangement  "pending 
adoption  of  a  further  directive".  In  the  meantime  the  Council  and  the  Commission  were 
agreed that the Commission proposal to set up a Securities  Committee remained  on the table 
(pursuant to the doctrine of "splitting"). 

The  Commission  considers  that  its  initial  proposal  to  set  up  a  committee  to  exercise 
implementing  powers  under  the  Capital  Adequacy  and  Investment  Services  Directives 
formally  remains  on the table  in accordance  with the doctrine of  splitting.  The  Commission 
nevertheless believes that there are a number of factors which now justify  the presentation of a 
proposal  amending,  under  Article  189A, the proposal  on the  establishment  of  the  Securities 
Committee that remains on the table before the Council and the Parliament. 

Firstly,  it  is  necessary  to  adapt  the  information  and  notification  arrangements  on  certain 
technical  matters put  in place by certain  provisions  of the  Capital  Adequacy  and  Investment 
Services Directives. 

Secondly, this dossier was considered  in the past in the context of the cooperation procedure. 
With the entry into force of the codecision procedure the proposal for a directive setting up the 
Securities Committee will have to be adopted jointly by Parliament and the Council. 

The  Capital  Adequacy  and  Investment  Services  Directives  were  adopted  in  1993  and  will 
enter into force on  1  January  1996. In the interests of clear legal drafting  the most appropriate 
approach  is to  formally  amend those  Directives  replacing the articles provisionally  reserving 
implementing  powers to the Council  with new articles establishing  the  Securities  Committee 
and giving the Commission  assisted  by the Committee the responsibility  for  exercising  those 
powers. 

Finally,  a  Modus  Vivendi  was  concluded  in  December  1994  between  the  Parliament,  the 
Council  and  the  Commission  concerning  implementing  measures  under  acts  adopted  in 
accordance  with  the  procedure  laid  down  in  Article  189B  of  the  Treaty.  Following  this 
important  inter-institutional  agreement both the Commission  and the Council  are of the view 
that this is now a favourable moment to seek to make progress on the creation of the Securities 
Committee. 

The  Commission  proposal  is  intended  to  put  an  end  to  the  temporary  arrangements  put  in 
place in the Capital Adequacy and Investment Services Directives. 

The proposal  also  gives the new Committee the role of acting  as a discussion  forum  for  any 
question relating to the securities markets directives. 

3. Comments on individual articles 

Article 1 

Article  1 of the proposal  replaces Article  10 of the Capital Adequacy  Directive by three new 
articles  (10,  10a  and  10b).  The  new  Article  10  lists  exactly  the  same  areas  in  which  the 
Commission  will  exercise  implementing/updating  powers  as  appeared  in  the  former 
Article 10. 

Article  10a,  paragraph  1  creates  the  new  Securities  Committee  to  be  made  up  of 
representatives  of  the  Member  States  and  to  be  chaired  by  the  Commission.  These 
arrangements are identical to those established, for example in the Insurance Committee. 

The comitology  procedure  set out in paragraph  2 is Procedure III, variant  (a) under the  1987 
Comitology  Decision.  This  is the  form  of  regulatory  committee  which  the  Commission  has 
consistently proposed as being the most appropriate in the area of financial services. 

Article  10b is concerned with the Committee's role as a general discussion  forum. 

Article 2 

Article 2 replaces Article 29 of the Investment Services Directive with three new articles. 

These new articles fulfil  exactly the same function  for the Investment Services Directive as the 
new articles incorporated in the Capital Adequacy Directive. 

The  list  of areas  for  the exercise of implementing/updating  powers  is exactly the  same  as in 
the previous Article 29. 

The only  difference  is that in the interests of legislative clarity, the new Article  29a(l)  refers 
back  to  the  fact  that  the  Securities  Committee  was  created  in  Article  10a  of  the  Capital 
Adequacy Directive, that Directive being the earlier text. 

Article 3 

This article amends Article 7(1) of the Investment Services Directive, which is part of Title III 
of that Directive dealing with relations with third countries. 

The  corresponding  provisions  of the  banking  and  insurance  directives  provide  that  Member 
States  shall  inform  the  Commission  of  the  creation  or  the  takeover  of  Community 
undertakings  by  third  country  interests.  The  Commission  in  turn  informs  the  relevant 
Committees. 

The  Investment  Services  Directive  created  a  temporary  Commission/Council  arrangement. 
However, the Securities Committee that has now been established can, as in the other  financial 
services areas, become the channel for keeping the Member States  informed. 

Article 4 

This article  similarly  modifies  the information  notification  arrangements  on certain  technical 
matters put in place by the Capital Adequacy Directive pending the creation of the  Securities 
Committee. 

Directive  .../.../EC of the European  Parliament  and of the  Council 

of 

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 

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  Commission1, 

Acting  in accordance  with the procedure  referred  to  in Article  189b of the  Treaty2 

Whereas  Council  Directive  93/6/EEC  on  the  capital  adequacy  of  investment  firms  and 
credit  institutions3  and  Council  Directive  93/22/EEC  on  investment  services  in  the 
securities  field4  were adopted  on  15 March  1993 and  10 May  1993  respectively, 

Whereas  implementing  measures  are necessary  for  the  application  of  Council  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  and  in  Article  29  of  Directive  93/22/EEC 

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; 

1 OJ No C 152, 21.6.1990, p.6 and OJ No C 50,25.2.1992, p. 5; OJ No C 43,22.2.1989, p.7 and OJ No C 

42,22.2.1990, p.7; and 

2 

3OJNoL141,  11.6.1993,p.l. 

4 OJ No L 141, 11.6.1993, p.27. 

5 

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  directives  on  capital  adequacy 
and  investment  services  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  it is appropriate  that  implementing  measures shall be taken  in accordance  with 
the  procedure  laid  down  in  Article  2,  procedure  III,  variant  (a),  of  Council  Decision 
87/373/EEC  of  13  July  1987  laying  down  the  procedures  for  the  exercise  of 
implementing powers conferred on the Commission5; 

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, 

HAVE ADOPTED THIS DIRECTIVE: 

5OJ No L 197, 18.7.1987, p.33. 

c 

Article 1 

Article  10 of Directive 93/6/EEC 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  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 
opimon 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  Committee's  opinion  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. 

Article 10b 

1. The Committee may, 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. 

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

Article 2 

Article 29 of Directive 93/22/EEC 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). 

C6 

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", 
composed of representatives of the Member States and chaired by a representative of the 
Commission. 

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  Committee's  opinion  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. 

Article 29b 

1. The Committee may, 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. 

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

^ 

Article 3 

Article 7(1) of Directive 93/22/EEC 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 a parent 
undertaking governed by the law of a third country. The Commission shall inform the 
Securities Committee 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 a 
parent undertaking 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." 

Article 4 

1. In Article 2(12), fifth paragraph, Annex 111(9) and Annex VI(9) of Directive 93/6/EEC, 
the words "the Council and" shall be deleted. 

2.  In Article  7(3)  of  Directive  93/6/EEC  the  words  "the  Council  and  the  Commission" 
shall be replaced by "the Securities Committee". 

This Directive is addressed to the Member States. 

Article 5 

Done at Brussels 

For the European Parliament 

The President 

For the Council 

The President 

Vo 

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