Directive 2006/31/EC of the European Parliament and of the Council of  5 April 2006  amending directive 2004/39/EC on markets in financial instruments, as regards certain deadlines   (Text with EEA relevance)
Date: 2006-04-05
Institutions: Council of the European Union, European Parliament
Subjects: energy distribution, energy industry, energy saving, public sector

L 114/60

EN

Official Journal of the European Union

27.4.2006

DIRECTIVE 2006/31/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 5 April 2006

amending directive 2004/39/EC on markets in financial instruments, as regards certain deadlines

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

(3)

Having regard to the Treaty establishing the European
Community, and in particular Article 47(2) thereof,

Having regard to the proposal from the Commission,

After consulting the European Economic and Social Commit-
tee,

Having regard to the opinion of European Central Bank (1),

Acting in accordance with the procedure laid down in
Article 251 of the Treaty (2),

Whereas:

(1) Directive 2004/39/EC of the European Parliament and of
the Council of 21 April 2004 on markets in financial
instruments (3)
introduces a comprehensive regulatory
regime to ensure a high quality of execution of investor
transactions.

In order to comply with the requirements of Direc-
tive 2004/39/EC and national implementing legislation,
investment firms and other regulated entities may have
to introduce new information technology systems, new
organisational structures, and reporting and record-
keeping procedures, or to make significant modifications
to existing systems and practices. This can only be done
once the contents of the implementing measures to be
adopted by the Commission and of
the national
legislation transposing the Directive are settled.

(4)

(5)

It is also necessary that Directive 2004/39/EC and its
implementing measures be transposed into national law
or apply directly in Member States simultaneously for the
Directive to produce its full effect.

It is therefore appropriate to extend the deadline for
Member States to transpose Directive 2004/39/EC into
national law. Similarly, the deadline for investment firms
to comply with the new
and credit
requirements should be postponed for a period after
the transposition into national law has been completed
by the Member States.

institutions

(6) Given the interaction between the different provisions of
Directive 2004/39/EC, it is appropriate that any exten-
sion of those deadlines apply to all the provisions of that
the transposition and
Directive. Any extension of
application deadlines should be proportionate to, and
not exceed, the needs of the Member States and regulated
In order to avoid fragmentation that could
entities.
hamper
in
the functioning of
securities, Member States should apply the provisions
of Directive 2004/39/EC at the same time.

the internal market

(7)

(2) Directive 2004/39/EC provides that Member States are to
adopt the laws, regulations and administrative provisions
necessary to comply with it by 30 April 2006. In order
to ensure uniform application in the Member States, a
significant number of complex provisions of
that
Directive need to be supplemented by implementing
measures, to be adopted by the Commission during the
period for transposition by Member States. Because
Member States cannot fully prepare and finalise their
national
laws until the content of the implementing
measures is clear, they may have difficulty in meeting the
current transposition deadline.

In its Resolution of 5 February 2002 on the implemen-
tation of financial services legislation (4), the European
Parliament requested that it and the Council should have
an equal role in supervising the way in which the
Commission exercises its executive role in order to
reflect the legislative powers of the European Parliament
In the solemn
under Article 251 of
declaration made before the European Parliament the
same day by its President, the Commission supported
that request. On 11 December 2002, the Commission
proposed amendments to Council Decision 1999/468/
EC of 28 June 1999 laying down the procedures for the
implementing powers conferred on the
exercise of
Commission (5),
and then submitted an amended
proposal on 22 April 2004. The European Parliament
its
does not consider

this proposal preserves

the Treaty.

that

(1) OJ C 323, 20.12.2005, p. 31.
(2) Opinion of the European Parliament of 13 December 2005
(not yet published in the Official Journal) and Council Decision
of 10 March 2006.
(3) OJ L 145, 30.4.2004, p. 1.

(4) OJ C 284 E, 21.11.2002, p. 115.
(5) OJ L 184, 17.7.1999, p. 23.

27.4.2006

EN

Official Journal of the European Union

L 114/61

it

In the view of

and the Council

the European
legislative prerogatives.
Parliament,
the
opportunity of evaluating the conferral of implementing
powers on the Commission within a determined period.
It is therefore appropriate to limit the period during
implementing
which the Commission may adopt
measures.

should have

from the first

(8) The European Parliament should be given a period of
transmission of draft
three months
amendments and implementing measures to allow it to
examine them and to give its opinion. However,
in
urgent and duly justified cases, it should be possible to
shorten that period. If, within that period, a resolution is
adopted by the European Parliament, the Commission
should re-examine the draft amendments or measures.

(9)

Further consequential amendments are necessary to
postpone the dates for the repeal of Council Directive
93/22/EEC of 10 May 1993 on investment services in the
securities field (1) and for the transitional provisions laid
down in Directive 2004/39/EC, and to extend the
timetable for the Commission's reporting obligations.

(10) Given the postponed deadline between the obligation for
Member States to transpose Directive 2004/39/EC into
national law and the deadline for investment firms and
credit institutions to comply with the new requirements,
the provisions of Directive 2004/39/EC will remain
ineffective until 1 November 2007;
therefore
appropriate to repeal Directive 93/22/EEC with effect
from 1 November 2007.

is

it

(11) Directive 2004/39/EC should therefore be amended

accordingly,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 2004/39/EC is hereby amended as follows:

(1) Recital 69 shall be replaced by the following:

‘(69) The European Parliament should be given a period
of three months from the first transmission of draft
amendments and implementing measures to allow
to examine them and to give its opinion.
it
it
However,
should be possible to shorten that period. If, within
that period, a resolution is adopted by the European
Parliament, the Commission should re-examine the
draft amendments or measures.’;

in urgent and duly justified cases,

(1) OJ L 141, 11.6.1993, p. 27. Directive as last amended by
Directive 2002/87/EC of the European Parliament and of the
Council (OJ L 35, 11.2.2003, p. 1).

(2) Article 64 shall be amended as follows:

(a)

the following paragraph shall be inserted:

‘2a. None of the implementing measures enacted
may change
this
Directive.’;

essential provisions of

the

(b) paragraph 3 shall be replaced by the following:

‘3. Without prejudice to the implementing mea-
sures already adopted, on 1 April 2008 at the latest,
the application of this Directive's provisions requir-
ing the adoption of technical rules, amendments
and decisions in accordance with paragraph 2 shall
from the
be suspended. Acting on a proposal
Commission,
the European Parliament and the
Council may renew the provisions concerned in
accordance with the procedure laid down in
Article 251 of the Treaty and, to that end, they
shall review them prior to the date referred to
above.’;

(3) Article 65 shall be replaced by the following:

‘Article 65

Reports and review

1. By 31 October 2007, the Commission shall, on the
basis of public consultation and in the light of
discussions with competent authorities, report to the
European Parliament and to the Council on the possible
extension of the scope of the provisions of this Directive
concerning pre and post-trade transparency obligations
to transactions in classes of financial instruments other
than shares.

2. By 31 October 2008, the Commission shall present
the European Parliament and the Council with a report
on the application of Article 27.

3. By 30 April 2008, the Commission shall, on the
basis of public consultations and in the light of
discussions with competent authorities, report to the
European Parliament and to the Council on:

(a)

(b)

the continued appropriateness of the exemption
provided for in Article 2(1)(k)
for undertakings
whose main business is dealing on own account in
commodity derivatives;

the content and form of proportionate require-
ments for the authorisation and supervision of such
undertakings as investment firms within the mean-
ing of this Directive;

L 114/62

EN

Official Journal of the European Union

27.4.2006

(c)

appropriateness of

the
the
appointment of tied agents in performing invest-
ment services and/or activities,
in particular with
respect to the supervision of them;

concerning

rules

(d)

the continued appropriateness of the exemption
provided for in Article 2(1)(i).

4. By 30 April 2008, the Commission shall present the
European Parliament and the Council with a report on
the state of the removal of the obstacles which may
the
prevent
information that trading venues are required to publish.

the consolidation at European level of

5. On the basis of
paragraphs 1 to 4,
proposals for related amendments to this Directive.

referred to in
the Commission may submit

reports

the

(6)

In Article 71, paragraphs 1 to 5 shall be replaced by the
following:

‘1.
Investment firms already authorised in their home
Member State to provide investment services before
1 November 2007 shall be deemed to be so authorised
for the purposes of this Directive if the laws of that
Member State provide that to take up such activities they
must comply with conditions comparable to those
provided for in Articles 9 to 14.

2. A regulated market or a market operator already
authorised in its home Member State before 1 November
2007 shall be deemed to be so authorised for the
purposes of this Directive if the laws of that Member
State provide that
the regulated market or market
operator, as
the case may be, must comply with
conditions comparable to those provided for in Title III.

6. By 31 October 2006, the Commission shall, in the
light of discussions with competent authorities, report to
the European Parliament and to the Council on the
for
continued appropriateness of
professional indemnity insurance imposed on interme-
diaries under Community law.’;

the requirements

3.
Tied agents already entered in a public register
before 1 November 2007 shall be deemed to be so
registered for the purposes of this Directive if the laws of
Member States concerned provide that tied agents must
comply with conditions comparable to those provided
for in Article 23.

(4) Article 69 shall be replaced by the following:

‘Article 69

Repeal of Directive 93/22/EEC

Directive 93/22/EEC shall be repealed with effect from
1 November 2007. References to Directive 93/22/EEC
to this Directive.
shall be construed as
References to terms defined in, or Articles of, Direc-
tive 93/22/EEC shall be construed as references to the
equivalent term defined in, or Article of, this Directive.’;

references

4.
Information communicated before 1 November
2007 for the purposes of Articles 17, 18 or 30 of
Directive 93/22/EEC shall be deemed to have been
communicated for the purposes of Articles 31 and 32 of
this Directive.

5. Any existing system falling under the definition of
an MTF operated by a market operator of a regulated
market shall, at the request of the market operator of the
regulated market, be authorised as an MTF, provided that
it complies with rules equivalent to those required by this
Directive for the authorisation and operation of MTFs
and that the request concerned is made within eighteen
months following 1 November 2007.’.

(5)

in Article 70, the first subparagraph shall be replaced by
the following:

Article 2

‘Member States shall adopt the laws, regulations and
administrative provisions necessary to comply with this
forthwith
Directive by 31 January 2007. They shall
inform the Commission thereof.

1. Member States shall adopt
the laws, regulations and
administrative provisions necessary to comply with this
Directive by 31 January 2007. They shall forthwith inform
the Commission thereof.

They shall apply these measures from 1 November
2007.’;

They shall apply these measures from 1 November 2007.

27.4.2006

EN

Official Journal of the European Union

L 114/63

2. When Member States adopt these measures, they shall
contain a reference to this Directive or shall be accompanied
by such reference on the occasion of their official publication.
The methods of making such reference shall be laid down by
Member States.

Article 4

This Directive is addressed to the Member States.

Article 3

This Directive shall enter into force on the day following that
of its publication in the Official Journal of the European Union.

Done at Strasbourg, 5 April 2006.

For the European Parliament

For the Council

The President

The President

J. BORRELL FONTELLES

H. WINKLER