Report from the Commission to the Council and the European Parliament - Sixth Progress Report on the Financial Services Action Plan
Date: 2002-06-03
Institutions: European Commission
Subjects: EU policy, financial institution, financial legislation, financial market, financial policy, service

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 3.6.2002
COM(2002) 267 final

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN
PARLIAMENT

Sixth Progress Report on the Financial Services Action Plan

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN
PARLIAMENT

Sixth Progress Report on the Financial Services Action Plan

Financial Services
An improving climate

- but quite some way to go

Sixth Progress Report

2

INTRODUCTION – THE POLITICAL CLIMATE HAS CHANGED

The Financial Services Action Plan (FSAP) is now halfway through its timetable for
implementation. The last progress report1 called for real and tangible progress. This sixth
report, prepared with the Financial Services Policy Group (FSPG) comprising personal
representatives of the EU’s finance ministers, concludes that
there has been a positive
response. The climate in financial services has improved; a number of agreements have been
struck, but significant challenges remain to complete the Plan by 2003/5.

The Belgian and Spanish Presidencies have helped create the necessary political momentum.
Progress is being made in the Council and the Parliament on many proposals. The mid-term
review of progress of 22 February 2002 on the Action Plan2 underlined strongly that financial
integration will bring real benefits for European citizens in terms of economic growth, more
jobs and sustained prosperity.

In March, the Barcelona European Council reaffirmed the objectives of the Action Plan as a
key priority of the Lisbon economic reform agenda, and set clear deadlines for the adoption of
eight specific measures. The informal meeting of ECOFIN ministers in Oviedo on 13 April
2002 gave further impetus to the process and recognised the need to step up its own efforts in
order to complete the Action Plan on time (Box 1).

1

2

Fifth Report : « Europe Must Deliver on Time » November 2001 COM(2001)712 final, available on
http://europa.eu.int/comm/internal_market/en /finances/actionplan/index.htm
Information available on DG Markt’s website:
http://europa.eu.int/comm/internal_market/en/finances/actionplan/02-36.htm

3

BOX 1

THE BARCELONA PRIORITIES (EUROPEAN COUNCIL)
(cid:1)

the FSAP must be implemented by 2005, and by 2003 for the securities and risk capital

markets;
(cid:1)

the Council and the European Parliament should approve in 2002 the Directives on market
insurance intermediaries,
abuse, collateral, distance marketing of
prospectuses, financial conglomerates and pension funds, and the Regulation on International
Accounting Standards.

financial

services,

THE OVIEDO AGREEMENT (INFORMAL ECOFIN)
(cid:1)

On financial integration the Council expressed its wish to step up efforts to complete the
including the adoption in 2002 of 8
Financial Services Action Plan (FSAP) by 2005,
important legal measures as stated in the Conclusions of the Barcelona European Council.
Furthermore, they agreed that individual measures should meet the objectives of integration
and efficiency. The Council invited the Commission to propose arrangements facilitating a
consistent implementation of EU legislation (see also Objective 3 -Prudential Rules and
Supervision- in the section Overall state of play of the Action Plan); called for a strict
application of EU competition rules; insisted on the need for increased endeavours in favour
of consumer confidence and protection.
(cid:1)

On policy issues related to Enron: noted that most of the regulatory issues highlighted by
Enron are already being tackled in the context of the FSAP (International Accounting
Standards, Regulatory Reporting) and welcomed further Commission work on auditor
independence, priority for the EU auditing strategy, financial analysts and credit rating
agencies. Ministers expressed their wish to extend the mandate of the High Level Group of
Company Law Experts to recommend best practices in corporate governance and auditing
practices.

A further significant milestone is the greater awareness and acceptance of the major benefits
that financial
integration can bring. A study commissioned by the European Financial
Services Round Table estimated that integration could add 0,5 – 0,7 per cent annually to EU
GDP3 - equivalent to 43 billion Euro on an annual basis. These potential benefits underline
the urgent need for FSAP to be completed on time and need to be explained more efficiently
to businesses and citizens4. The Commission will report later this year on further micro- and
macroeconomic estimates of economic benefits.

3

4

Report to European Financial Services Round Table : « the Benefits of a Working European Retail
Market for Financial Services, www.zew.de/erfstudyresults/
The Danish Council Presidency intends to discuss the benefits of financial integration on the basis of
studies organised by the Commission. These will be reported to the Council in the next progress report.

4

REAL PROGRESS IS BEING MADE TO MEET EUROPEAN COUNCIL DEADLINES

After nearly a year of negotiation, a compromise on how to implement the recommendations
of the Lamfalussy report on securities regulation has been struck with the Parliament.

Furthermore, and building on the successful work of the Belgian presidency, legislative
agreements in line with the Barcelona conclusions are currently being sought by the Spanish
presidency in respect of the following:

–

–

–

–

final adoption in a single reading of the Regulation on International Accounting
Standards5 from 2005. This would be a major achievement particularly after so short
a period of negotiation;

the Directives on Distance Marketing6, Collateral7 and Insurance Intermediaries8 are
all targeted for adoption by June 2002;

political agreement in the Council has been reached on 7 May 2002 on the proposed
Directives on Market Abuse9 and Financial Conglomerates10, with the aim of
adopting the proposals as early as possible in 2002;

political agreement on the Directives on Supplementary Pension Funds11 and
Prospectuses12 could be achieved in the Spanish presidency with final adoption by
the end of the year for Supplementary Pension Funds and in 2003 for Prospectuses.

The FSPG has contributed significantly towards the progress made since the last progress
report notably by identifying key political obstacles in a number of specific proposals where
deadlines are under threat. But Member States must continue to demonstrate the necessary
political will to compromise during the discussions themselves. The closest possible co-
operation between the EU Institutions is also essential in order to obtain as many single
reading agreements or accelerated second readings as possible.

5

6

7

8

9

10

11

12

COM(2001)80 – 13/02/2001
COM(1999)385 – 23/07/1999
COM(2001)168 – 27/03/2001
COM(2000)511 – 20/09/2000
COM(2001)281 – 30/05/2001
COM(2001)213 – 24/04/2001
COM(2000)507 – 11/10/2000
COM(2001)280 – 30/05/2001

5

SOME CONCERNS REMAIN

Three concerns were identified in the Fifth Progress Report: on the overall pace of delivery;
on the take-over bids proposal and on pension funds.

–

–

–

Concerns about the general pace of the legislative process have eased somewhat.

Taking into account the recommendations of the High Level Group of Company Law
Experts, the proposal on take over bids will address the three principal concerns of
the European Parliament: the issue of the “level playing field”, a definition of an
“equitable price” and the possibility for a majority shareholder to buy out a minority
shareholder (“squeeze-out”). The Commission will bring forward its proposal as
soon as possible following discussion with many interested parties.

Progress on Supplementary Pension Funds remains of concern13. However, the
Spanish presidency is pressing hard to reach an agreement in Council before mid-
2002.

Concerns remain on a number of other proposals. Many important issues need to be resolved
if the Prospectuses Directive is to be adopted without delay, particularly those related to the
specific needs of SMEs. The Distance Marketing of Financial Services Directive has now
reached a critical stage in the Parliament where it is undergoing a second reading. A vote is
due during the May 2002 plenary session which could either pave the way for rapid adoption
of the Directive or lead into a difficult conciliation procedure.

13

It has been identified as of major concern in successive progress reports: Fourth Progress Report:
“Political Challenges” COM (2001)286 final, and Fifth Progress Report: “Europe Must Deliver on
Time” COM(2001) 712 final. Available on:
http://europa.eu.int/comm/internal_market/en/finances/actionplan/index.htm

6

OVERALL STATE OF PLAY OF THE ACTION PLAN

An Annex14 to this report indicates the state of play on individual measures in the Action Plan
that are still being negotiated (those measures that have been agreed no longer appear but are
summarised for the last time at the beginning of the annex).

Objective 1 : A Single EU Wholesale Market.

The Action Plan’s first strategic objective is to establish a common legal framework for
integrated securities and derivatives markets. Financial integrity is a cornerstone of that
objective. The Enron collapse has prompted the Commission to examine to what extent the
Action Plan already deals with the regulatory issues arising from the case and whether new
initiatives are needed. A working document of the services of the Commission15 was tabled at
the informal ECOFIN meeting in Oviedo and was well received by ministers. This paper
outlines a global and coherent strategy to help preventing a similar collapse in the EU. It
focuses on five areas: financial reporting, statutory audit, corporate governance, transparency
in the international financial system, financial analysts and credit rating agencies.

As a result of the International Accounting Standards (IAS) Regulation, listed EU companies
will have to prepare their consolidated financial statements in accordance with IAS by 2005.
The application of high quality accounting standards is thereby ensured. In order to enable
Member States to adapt their accounting legislation so as to make it compatible with IAS, the
Commission will soon come forward with its proposal for a directive to modernise the Fourth
and Seventh Accounting Directives16.

Proper enforcement will be one of the main subjects of the Communication which the
Commission will soon be drawing up on priorities in the field of auditing. This
Communication will address issues such as the application of International Standards on
Auditing, the public oversight of the auditing profession, the role of audit committees and
issued a Recommendation on Auditor
ethics. Moreover, the Commission has recently
Independence17. This Recommendation will particularly aim at avoiding that the statutory
auditor finds himself in a position which could have a negative impact on his objective
assessment of the financial statements. Rather than introducing a list of interdictions, the
Commission has opted for a principles based approach which puts much of the responsibility
in the hands of the profession. Should this approach not work in practice, the Commission
might reassess the situation and come forward with legislative proposals. The Commission
will also continue its discussions with the Committee of European Securities Regulators on
proper supervision of financial statements published by listed companies.

14

15

16

17

As in the past the Annex will be available on the internet and updated regularly Available on :
http://europa.eu.int/comm/internal_market/en/finances/actionplan/index.htm
The paper is available on DG Markt’s website :
http://europa.eu.int/comm/internal_market/en/company/company/news/ecofin_2004_04_enron_en.pdf
Directives 78/660/EEC and 83/349/EEC
http://europa.eu.int/comm/internal_market/fr/company/audit/index.html Commission Recommendation
2001/6942 of 16 May 2002 on Statutory Auditors' Independence in the EU: A Set of Fundamental
Principles (C(2002)1873)

7

The High Level Group of Company Law Experts came forward in January with its first
Report on issues related to take over bids18. The recommendations contained in this Report
should help the Commission in preparing its new proposal for a Directive on Take over bids.
In its second Report, the Group will provide recommendations for modernising the EU’s
company law framework19. At the informal ECOFIN Council in Oviedo, the Group was asked
to include in its review (which already includes corporate governance as a general theme) a
number of corporate governance issues, such as the role of non-executive directors,
management remuneration and the responsibility of management for the preparation of
financial information. Preliminary views on these issues will be presented to ECOFIN in
June. Final conclusions should be available for the ECOFIN Council in September. The
Group will address other company law issues such as the creation and functioning of
companies, shareholders’ rights; corporate restructuring and the possible need for new
corporate legal forms at EU level. The Group will present its final Report on these issues in
September. In conformity with the Action Plan, the Commission will also shortly bring
forward its proposal for a directive on Cross Border Mergers (10th Company Law Directive).

The Commission will also bring forward before the end of 2002, proposals for an update of
the Investment Services Directive20 and a proposal on Regular Reporting21. Responses to the
Commission on a revision to the Investment Services Directive consultations underlined the
need for further work on clearing and settlement. A Communication on Clearing and
Settlement will be issued shortly.

18

19

20

21

Available on DG Markt’s website:
http://europa.eu.int/comm/internal_market/en/company/company/news/02-24.htm
Consultation paper available on DG Markt’s website :
http://europa.eu.int/comm/internal_market/en/company/company/modern/index.htm
More information available on DG Markt’s website:
http://europa.eu.int/comm/internal_market/en/finances/mobil/isd/index.htm
More information available on DG Markt’s website:
http://europa.eu.int/comm/internal_market/en/finances/mobil/transparency/index.htm

8

Objective 2 : Open and Secure Retail Markets

The mid-term review demonstrated the need to make further efforts towards a truly integrated
retail financial market for all, based on the Action Plan’s original policy initiatives. Building
Consumer confidence is key to progress in this field. The involvement of consumer
representatives in the financial integration process is essential to create that confidence and
awareness. The Retail Financial Services Road Map22 sets out key actions on which progress
has to be made:

–

–

–

–

–

–

22

23

24

25

26

the Communication on a single market for payments23 will be followed up in 2003
by a proposal for a legislative framework for payments as the cornerstone of a single
payments area;

the Action Plan to combat fraud and counterfeiting in non-cash payments24 is being
implemented with the national authorities;

the Commission has adopted a Recommendation25 inviting all lenders to comply by
30 September 2002 with the provisions of the European Voluntary Agreement on
pre-contractual information to be given to consumers by lenders offering home loans.
The implementation of the code is being closely monitored by the Commission.

the Communication on E-Commerce and Financial Services is being followed-up
with the Member States to ensure a clear and coherent implementation throughout
the EU;

the existence of insurance guarantee schemes for policyholders in the case of a
winding-up of an insurance undertaking are being examined in order to determine
whether an EU-wide response is required (legislative or otherwise);

the success of the FIN-NET consumer out-of-court redress initiative26 will be
followed up in order to ensure increased awareness and efficiency. Generally, there
is a need for more structured and effective European consumer investor input into
Community decision making.

Communication from the Commission to the Council and the EP « E-Commerce and Financial
Services » COM(2001)66 final – 07/02/2001
COM(2000)36 – 31/01/2000
COM(2001)11 – 09/02/2001
COM(2001)477 – 01/03/2001
Information available on DG Markt’s website:
http://europa.eu.int/comm/internal_market/en/finances/consumer/adr.htm

9

Objective 3 : Prudential Rules and Supervision

The Action Plan’s third strategic objective, state-of-the-art prudential rules and supervision,
will contribute to the stability of Europe’s financial sector. It includes the following:

–

–

–

the initial review of insurance solvency rules27 has demonstrated the need for a more
fundamental overhaul of the present approach (‘solvency II’) and a framework for
reinsurance supervision;

an important step to reinforce the EU’s anti-money laundering policy was taken by
to the Money Laundering Directive28.
the rapid adoption of the amendment
Following the events of September 11, the legal framework to combat money
laundering may need further strengthening by a third Money Laundering Directive in
2003;

the revised capital
an ambitious timetable underpins the implementation of
framework for banks and investment firms by 2006, following discussions in the
G10-Basle Committee.

The Action Plan sets as its goal to “enable the EU to assume a key role in setting high global
standards for regulation and supervision”, and to “contribute to the developing of EU
supervisory structures which can sustain stability and confidence in an era of changing market
structures and globalisation”. The rapid implementation of legislation and its adaptation to
market developments together with a much-needed convergence of supervisory practices are
the key objectives. Concrete steps have already been taken, in particular in the securities
markets sector where the implementation of the recommendations of the Lamfalussy
Committee is already taking place29. The first requests for technical advice on implementing
measures (in the prospectus and market abuse areas) have recently been sent to the Committee
of European Securities Regulators (CESR). New processes to ensure a full consultation of the
market and consumers are also underway at both CESR and the Commission itself (e.g. 2nd
Investment Services Directive (ISD) consultations/hearings).

In its Report to the ECOFIN Council on Financial Integration, the Economic and Financial
Committee concluded that the 4-level regulatory approach for securities markets, proposed by
the Lamfalussy Report and endorsed by the Council, has an important role to play in the field
of supervisory convergence. The ECOFIN meeting on 7 May 2002 invited the Commission
“having involved relevant supervisory authorities and Ministries of Finance and taking
account of the views of the industry and consumers, to bring forward as soon as possible its
report on the appropriate arrangements that are needed to facilitate the consistent
implementation and enforcement of regulation including supervisory practices, in line with
the recommendations of the Economic and Financial Committee’s report on financial
integration, to allow its use by the EFC” as a basis for EFC’s own report.

27

28

29

Directives 2002/12/EC and 2002/13/EC
Directive 2001/97/EC
Commission Decisions of 6 June 2001 establishing:
2001(1493) final, and the Committee of European Securities Regulators COM 2001(1501) final.

the European Securities Committee COM

10

EXTERNAL DIMENSION/ GLOBALISATION/ENLARGEMENT

An integrated well-functioning home market will also improve EU financial service
providers’ global competitiveness and attract more foreign investors. A more efficient and
larger scale EU financial sector will strengthen the international role of the euro. A common
external dimension issue is the EU enlargement process. Negotiations with the first countries
are expected to be finalised in 2002. The Commission will invite representatives of Finance
Ministers in the candidate countries to a special meeting of the FSPG before the end of 2002
to discuss developments in the financial sector and the process of European financial
integration.

Multilateral GATS (General Agreement on Trade in Services) negotiations embedded in the
broader Doha Development Agenda are expected to accelerate. Further steps in the integration
and liberalisation of the EU market should be matched by adequate market opening
commitments by all third-countries. Technical discussions between the Commission and the
US authorities are underway, including exchanges of view with the Securities and Exchange
Commission (SEC) on trading screens and accounting standards. The Commission and
Member States authorities have also discussed with the SEC and the Federal Reserve Board
supervisory practices for financial conglomerates.

CONCLUSIONS

The Barcelona European Council, the informal ECOFIN meeting in Oviedo and the mid term
review have all stressed the vital importance and benefits of integrated capital markets in
achieving economic growth and job creation, for financial stability and to enable consumers
and businesses alike to reap the full benefits of the euro. Recent progress in the Council and
the European Parliament on a number of proposals demonstrate that the political commitment
to implement the FSAP on time is beginning to be translated into firm political agreements.
The agreement on the Lamfalussy process was a key development in this process.

But the rhythm of recent successes needs to be continued if the 2005 deadlines are to be met.
All measures must be agreed by mid-2004 at
to allow adequate time for
implementation by Member States. The next Progress report will be sent to the ECOFIN
the end of this year. The 8 Barcelona-listed agreements should have been
Council at
successfully concluded by then. If so, the FSAP will be well on the way to completion. Even
if not all barriers have been removed, significant and irreversible progress towards a strong
integrated European financial sector by 2005 is achievable – it is a prize that is now within
our grasp.

the latest

11

ANNEX

PROGRESS ON THE FINANCIAL SERVICES ACTION PLAN

This table provides an overview of progress on the individual actions in the Financial Services Action Plan
(COM(1999) 232). It shows the present state of play and provides the Commission’s assessment of the degree to
which Community institutions and Member States are achieving the objectives set out in the Action Plan. Of the
42 original measures 26 have now been completed: they are listed at the beginning of this Annex.

A further five measures have also been prepared in response to wider market developments over the past three
years. These measures, which are not included in the original Action Plan, are mentioned separately in the
Annex under each of its four strategic objectives. They are included to provide a complete overview of the
Union’s present workload.

The progress reports remain available on the following web-page :

http://europa.eu.int/comm/internal_market/en/finances/actionplan/index.htm

:

–

Plus sign: progress has been achieved in meeting the targets set in the Action Plan

Minus sign: indicates no progress

12

COMPLETED FSAP MEASURES
(Legislative proposals in bold)

Issued on 13 June 2000,

Commission Communication on the Application of Conduct of Business Rules Under Article 11 of the
Investment Services Directive (ISD) (distinction between professional and retail investors). Issued on
14 November 2000, COM(2000)722
Commission Communication on upgrading the ISD. Issued on 15 November 2000, COM(2000)729
Amendments to the 4th and 7th Company Law Directives to allow fair value accounting:
Directive 2001/65/EC adopted on 31 May 2001
Commission Communication updating the EU accounting strategy.
COM(2000) 359
Recommendation on quality assurance. Issued on 21 November 2000, C(2000) 3304
Political agreement on the European Company Statute. Directive 2001/86/EC and Regulation
(EC)2157/2001 adopted on 8 October 2001
Review of EU corporate governance practices The final report of the Comparative Study was published
on 27 March 2002 (available on DG Markt’s website :
http://europa.eu.int/comm/internal_market/en/company/company/news/index.htm)
Commission Communication on Funded pension Schemes. Issued on 11 May 1999 Com (1999)134
Adoption of the two Directives on UCITS. Directives 2001/107/EC and 2001/108/EC adopted on
21 January 2002.
Commission Communication on clear and comprehensible information for purchasers. The work on the
communication has been integrated in the context of the Commission Communication on an e-
commerce policy for financial services (COM(2001)66 – 07/02/2001).
Recommendation to support best practice in respect of information provision (mortgage credit). Issued
on 1 March 2001, COM(2001)477
Commission report on substantive differences between national arrangements relating to consumer-
business transactions. Discussions with industry (‘Forum Group’) and consumers are concluded.
Information gathered is used for further Commission initiatives in the field of retail financial services.
Interpretative Communication on the freedom to provide services and the general good in insurance.
Issued on 2 February 2000, C (1999)5046
Commission Communication on a single market
COM(2000)36 final
Commission Action Plan to prevent fraud and counterfeiting in payment systems. Issued on 9 February
2001, COM(2001)11
Commission Communication on an e-commerce policy for financial services. Issued on 7 February
2001, COM(2001) 66
Adoption of the proposed Directive on the Reorganisation and Winding-up of Insurance
undertakings. Directive 2001/17/EC adopted on 19 March 2001
Adoption of the proposed Directive on the Winding-up and Liquidation of Banks. Directive
2001/24/EC adopted on 4 April 2001
Adoption of the proposal for an Electronic Money directive. Directive 2000/46/EC adopted on 18
September 2000
Amendment to the Money Laundering Directive. Directive 2001/97/EC adopted on 4 December
2001
Commission Recommendation on disclosure of financial instruments. Issued on 23 June 2000, C(2000)
1372
Amendments to the solvency margin requirements in the Insurance Directives. Directives
2002/12/EC and 2002/13/EC adopted on 5 March 2002
Amendment of the Insurance Directives and the Investment Services Directive to permit
information exchange with third countries. Directive 2000/64/EC adopted 7 November 2000
Creation of two Securities Committees. Decision of 6 June 2001 setting up the European
Securities Committee - ESC (C(2001)1493) and Decision of 6 June 2001 setting up the Committee
of European Securities Regulators - CESR (C(2001)1501)
Commission Recommendation 2001/6942 of 16 May 2002 on Statutory auditors’ independence in
the EU: A set of fundamental principles (C(2002)1873)
Review of taxation of financial service products. This action has been taken care of in the context of the
initiative on taxation on supplementary pension funds as set out below

Issued on 31 January 2000,

for payments.

(1)

(2)
(3)

(4)

(5)
(6)

(7)

(8)
(9)

(10)

(11)

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(19)

(20)

(21)

(22)

(23)

(24)

(25)

(26)

13

STRATEGIC OBJECTIVE 1: A SINGLE EU WHOLESALE MARKET

Raising capital on an EU-wide basis

Action

Directive on
Prospectuses

Initial FSAP
optimal
Timeframe

Adoption

2002

Adoption

2003

Present Timeframe

State of Play/Follow-up

Proposal for a directive on prospectuses
adopted by the Commission.
COM(2001)280, 30/05/2001. The Barcelona
European Council (March 2002) has asked
the Council and the European Parliament to
adopt the Directive as early as possible in
2002.

Work continuing in the Commission in
close co-operation with parties concerned.
First consultation summer 2001. Second
consultation April 2002

Updating the
Regular Reporting
Requirements

Proposal
2001

Proposal
December 2002

Adoption
2002

Adoption
December 2003

Establishing a common legal framework for integrated securities and derivatives markets

Directive on Market
Abuse

Adoption 2003

Adoption in 2002

Proposal for a directive on insider dealing
and market manipulation (market abuse)
adopted by the Commission
COM(2001)281, 30/05/2001. Opinion of
European Parliament adopted on 14 March
2001. Political agreement reached in Ecofin
on 7 May 2002. The Barcelona European
Council (March 2002) has asked the Council
and the European Parliament to adopt the
Directive as early as possible in 2002.

Directive to upgrade
the Investment
Services Directive

Proposal
December 2002

Adoption
June 2003

Follow-up to: Communication on upgrading
ISD issued: COM(2000)729 final
(15/11/2000). First consultation process
concluded in first quarter 2001. Second
consultation in April 2002.

14

::::

–

::::

::::

Towards a single set of financial statements for listed companies

Action

Regulation on
International
Accounting
Standards

Initial FSAP
optimal
Timeframe

Present Timeframe

State of Play/Follow-up

Adoption June 2002 Follow-up to the Communication on

::::

International Accounting Standards issued
by the Commission on 13 June 2000
(COM(2000) 359 final). Proposal for
Regulation on IAS (COM(2001)80)
adopted by the Commission on 13
February 2001. Opinion of the European
Parliament on 12 March 2002 opens up
for adoption in a single reading. The
Barcelona European Council (March
2002) has asked the Council and the
European Parliament to adopt the
Directive as early as possible in 2002.
Adoption foreseen at ECOFIN Council of
4 June 2002.

Modernisation of
the accounting
provisions of the 4th
and 7th Company
Law Directives

Proposal end
2000

Adoption 2002

Proposal May 2002

Adoption early
2003

Communication on accounting strategy
(see above) adopts this action as part of its
implementation program. Possible general
orientation as early as October 2002.

::::

Containing systemic risk in securities settlement:

Implementation
Settlement Finality
Directive

Commission
report to
Council
end 2002

Commission report
to Council Dec-
2002

Implementation date 11 December 1999.
All Member States have implemented the
necessary measures. Commission report to
Council end 2002.

Directive on
financial collateral
arrangements

Adoption 2003 Adoption June 2002 Adopted by the Commission on 27 March

2001 - COM(2001)168 FINAL. The
Council reached a Common Position on 5
March 2002. Second reading ongoing in
European Parliament. The Barcelona
European Council (March 2002) has asked
the Council and the European Parliament
to adopt the Directive as early as possible
in 2002.

:

:

15

Towards a secure and transparent environment for cross-border restructuring:

State of Play/Follow-up

The European Parliament and the Council
reached an agreement on a compromise
text of the Directive on 6 June 2001. The
EP rejected the compromise text on 4 July
2001. New proposal will consider the
recommendations of the High Level Group
of Company Law Experts.

Follow-up to: the Recommendations of the
High Level Group of Company Law
Experts on takeover bids. The second
report of the Group will address such
issues as cross-border voting (including
use of new technologies), capital
maintenance, the functioning of companies
and groups of companies. The Group will
also examine the conclusions of the review
of EU corporate governance practices and
come forward with recommendations in
this respect, in particular in the light of
discussion in the informal ECOFIN in
Oviedo on 12-13 April 2002. Presentation
of the second report in September 2002.

A first proposal was tabled in 1985 but
remained blocked on the issue of workers’
participation. The new proposal will take
account of the solutions adopted within the
framework of the European Company
Statute.

Reassessment is expected on the basis of
the report of the new Group of High Level
Company Law Experts and the awaited
decisions of the European Court of Justice.

–

::::

::::

–

Proposal adopted on 11 October 2000
(COM (2000)507 provisional). Opinion of
European Parliament adopted on 4 July
2001.The Barcelona European Council
(March 2002) has asked the Council and
the European Parliament to adopt the
Directive as early as possible in 2002.

–

Action

Initial FSAP
optimal
Timeframe

Present
Timeframe

Directive on Take
Over Bids

Adoption 2000

New Proposal June
2002

Adoption April
2003

2002/2003

Follow-up: Report
of the High Level
Group of Company
Law Experts

Proposal for a 10th
Company Law
Directive

Proposal
Atumn1999

New Proposal Sep
2002

Adoption 2002

Adoption 2003

Proposal for a 14th
Company Law
Directive

Proposal
Autumn1999

No proposal before
2003

Adoption 2002

A Single Market which works for investors:

Directive on the
Prudential
Supervision of
Supplementary
Pension Funds

Adoption
Jan/2002

Adoption
December 2002

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(MEASURES IN RESPONSE TO WIDER MARKET DEVELOPMENTS SINCE THE ADOPTION OF THE
ACTION PLAN, BUT NOT INCLUDED IN THE ORIGINAL PLAN)

Communication on
Clearing and
Settlement

Issue in May 2002

Efficient cross-border clearing and settlement in
Europe is essential to realise the full benefit of an
integrated financial sector. The Commission will
launch a consultation which will run until the end of
August 2002 with the aim of identifying what action
is needed in this area and what the priorities are.

::::

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STRATEGIC OBJECTIVE 2: OPEN AND SECURE RETAIL MARKETS

Action

Initial FSAP optimal
Timeframe

Present Timeframe

State of Play/Follow-up

Directive on the
Distance Marketing
of Financial Services

Adoption end 2000

Adoption
June 2002

Directive on
Insurance
Intermediaries

Adoption 2002

Adoption 2002

Amended proposal was adopted by the
Commission on 23 July 1999
(COM(1999)385). Political agreement
was reached at the Internal Market
Council on 27 September 2001. Second
reading in the European Parliament
ongoing (vote on 14th May 2002). The
Barcelona European Council (March
2002) has asked the Council and the
European Parliament to adopt the
Directive as early as possible in 2002.

Proposal for a Directive was adopted 20
September 2000 (COM(2000)511 final).
Common Position in Council 19 March
2002. Second reading commenced in
European Parliament 8 April 2002. The
Barcelona European Council (March 2002)
has asked the Council and the European
Parliament to adopt the Directive as early
as possible in 2002.

EU legal framework
for payments in the
Internal Market

Follow-up to FIN-
NET

Follow up to
Commission’s
Action Plan to
prevent fraud and
counterfeiting in
payment systems

Proposal 2003 Wide consultations of all interested parties

has started. Evaluation of deficiencies in
present legal acts is ongoing

Follow-up to: the Commission
Communication on an E-commerce policy
for financial services COM(2001) 66 final.
FIN-NET was established in 2001 as an
EU network of out-of-court redress bodies
in the Member States for financial
services. The present follow-up includes :
- publication and dissemination of a
brochure (1,5 million copies) in order to
inform better the wider public
- further widening of the geographical and
sectoral coverage
- further improvement of information and
co-operation between schemes

Follow-up to: the Communication
"Preventing fraud and counterfeiting of
non-cash means of payment" adopted by
the Commission on 9 Febraury 2001
(COM(2001)11). The Action Plan was
attached to the Communication and will
run from 2001 to 2003. At the end of 2003
the Commission will prepare a report on
its implementation and propose further
measures, if needed.

Ongoing

Permanent

Ongoing until
2003

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::::

::::

::::

::::

::::

(MEASURES IN RESPONSE TO WIDER MARKET DEVELOPMENTS SINCE THE ADOPTION OF THE
ACTION PLAN, BUT NOT INCLUDED IN THE ORIGINAL PLAN)

Work on Insurance
Guarantee Schemes

Ongoing until 2003

Technical level work started in February 2002 to
study the necessity for insurance guarantee schemes
similar to those existing for banks and securities.

::::

STRATEGIC OBJECTIVE 3 : STATE-OF-THE-ART PRUDENTIAL RULES AND SUPERVISION

Action

Initial FSAP
optimal Timeframe

Present Timeframe

State of Play/Follow-up

Amend the Directives
Governing the
Capital Framework
for Banks and
Investment Firms

Proposal spring
2000

Proposal 2004

Adoption 2002

Adoption 2005

Directive on
Prudential Rules for
Financial
Conglomerates

Adoption 2002

Adoption
December 2002

The Basel Committee has extended the
timetable for development and
implementation of the new international
Accord. There will be a further impact
study carried out before the publication of
the final consultative document on the
proposed new framework. The
Commission will publish a third
consultative document in early Summer
2003. Work on draft legislative proposals
in progress. Proposal for directive will be
adopted by the Commission early in 2004.
Implementation date for new framework:
31 December 2006. The Commission will
report to the Council on the consequences
of the accord in late autumn 2003.

The Commission adopted on 24 April
2001 a proposal for a directive on the
supervision of financial conglomerates,
COM(2001)213 final. Opinion of the
European Parliament delivered on 14
March 2002. Political Agreement ECOFIN
Council reached on 7 May 2002. Second
reading in European Parliament foreseen
in second half of 2002. The Barcelona
European Council (March 2002) has asked
the Council and the European Parliament
to adopt the Directive as early as possible
in 2002.

::::

::::

19

(MEASURES IN RESPONSE TO WIDER MARKET DEVELOPMENTS SINCE THE ADOPTION OF THE
ACTION PLAN, BUT NOT INCLUDED IN THE ORIGINAL PLAN)

Reinsurance
supervision

Ongoing until 2003

Fundamental review of
the solvency system in
insurance (Insurance
Solvency II)

Ongoing until 2005

Third Money
Laundering Directive

Proposal End 2003

Investigation of the possibilities to create a
harmonised supervision framework for reinsurance.
It has not yet been decided whether to choose a
“fast-track” solution or to adopt a more
comprehensive approach aligning this work to that
of the Solvency II project.

Long-term project to define a new solvency
framework for EU insurance companies. Work at
two stages:

1. in the first phase focus on the general layout of
the solvency system; an orientation debate with the
Member States to place in Insurance Committee in
November 2002 to decide on the general form of
the system,

2. in the second phase elaboration of the technical
solutions to be included in the future system.

Depending on progress, Commission will prepare a
report on the implementation of the 2nd Directive
and on the issues to be addressed in a third
Directive.

::::

::::

::::

20

OBJECTIVE: WIDER CONDITIONS FOR AN OPTIMAL SINGLE FINANCIAL MARKET

Action

Initial FSAP
optimal Timeframe

Present
Timeframe

State of Play/Follow-up

Following agreements at the European
Council in Feira in June 2000 and at the
Ecofin Council in November 2000, the
Commission on 18 July 2001 presented a
new proposal for a Directive, replacing the
1998 proposal. In December 2001, the
Ecofin Council approved the draft Directive
for the purpose of negotiations with third
countries. Following the adoption of a
negotiating mandate by the Ecofin Council
on 16 October 2001, the Commission
entered into negotiations with the US and
five key third countries to promote the
introduction of equivalent measures in order
to pave the way for adoption of the Directive
before the end of 2002.

A Commission Communication on "The
elimination of tax obstacles to the cross-
border provision of occupational pensions"
was presented on 19 April 2001
(COM(2001)214). The Communication sets
out how the fundamental freedoms of the EC
Treaty apply in the area of cross-border
pension provision and calls upon Member
States to eliminate discrimination against
occupational schemes established in other
Member States. Two cases are already
pending in the Court of Justice (Danner, case
C-136/00 and Skandia/Ramstedt, case C-
422/01). The Commission will start
infringement procedures where necessary.
At the ECOFIN Council of October 2001
Council and Commission have undertaken to
further develop the Commission's proposals
on the exchange of information and the
elimination of double taxation and double
non-taxation, with a deadline of end 2002.

A report identifiying the harmful tax
measures was submitted to the ECOFIN
Council in November 1999 and a detailed
timetable for dismantling those measures
was agreed on one year later. The Code of
Conduct Group is continuing its work by
e.g. monitoring the roll-back and the
standstill processes with a view to the final
agreement on the tax package.

::::

::::

::::

Adopt a Directive on
taxation of savings
income in the form of
interest payments

Political Agreement
by Nov/1999

New Proposal
Jul-01

Adoption 2000

Adoption
Dec-02

Commission initiative
on taxation of cross-
border occupational
pensions

Proposal end 1999

Adoption 2002

Issued
Apr-01

Implementation of the
December 1997 Code
of Conduct on
business taxation

Ongoing
examination in the
Code of Conduct
group

Ongoing
examination in
the Code of
Conduct group

21