Financial Services Action Plan
Report on the Functioning of EU Product and Capital Markets

Financial Services Action Plan

On December 2 2002 the European Commission published its latest progress report on the Financial Services Action Plan.

It highlights a number of recent steps towards the completion of the plan, including:

  • issue of a proposal for an upgrade of the Investment Services Directive;

  • opening of a dialogue with industry on a revised capital framework for banks and investment firms, with a new EU framework expected to come into effect at the same time as the new Basel Capital Accord (end of 2006);

  • launch of consultations on clearing and settlement;

  • presentation of a revised proposal for a directive on takeover bids;

  • political agreement of the EU Council on the proposal for a directive on prospectuses;

  • definitive adoption of the financial conglomerates proposal; and

  • definitive adoption of the market abuse proposal.

The report concludes that attention should increasingly focus on the correct and timely implementation of the measures adopted to date.

The next report on the functioning of the plan is expected in six months.

Report on the Functioning of EU Product and Capital Markets

On December 23 2002 the European Commission adopted its latest report on the functioning of the European Union's product and capital markets. The report provides additional evidence that the internal market has delivered significant benefits for Europeans, not least lower prices for many consumer products. However, there is still much untapped potential for gains in several areas of the economy, especially financial services.

In relation to the financial services sector, the report concludes that there are many remaining barriers which prevent the proper functioning of the internal market. The Financial Services Action Plan has addressed some of the obstacles to integration and further measures are in the pipeline.

The report is the fifth in a series of annual progress reports prepared at the request of the Cardiff European Council in 1998. It will be followed by a commission analysis of overall progress. That analysis will include a new economic impact assessment. The report will then be submitted to the Spring 2003 European Council.

For further information on this topic please contact Philip Woolfson at Oppenheimer Wolff & Donnelly by telephone (+32 2 626 0500) or by fax (+32 2 626 0510) or by email ([email protected]).