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Speaking at a dinner this week hosted by the Financial Times, EU Internal Market Commissioner, Charlie McCreevy warned member states that they are likely to face legal action if they are not ready to to introduce the markets in financial instruments directive (MiFID) on time.
The directive needs to be implemented by the end of January 2007, and will come into force in November of that year.
MiFID aims to create a single market for financial products and providers and allow greater competition between different institutions with regard to the provision of certain investment products.
Mr McCreevy told those attending the awards dinner that:
"MiFID will transform the landscape for the trading of securities, and I am confident that it will introduce much-needed competition and efficiency throughout Europe’s financial markets. This is good news in that it will both increase investor protection widen choice, and enhance Europe's competitiveness."
"The spotlight is now on the Member States who must transpose MiFID – and its implementing measures – into their national law. I am very concerned that some Member States have stated publicly that they will not be able to transpose MiFID on time. This is very disappointing – particularly since we have repeatedly advised them to begin the transposition process early."
"Let me be perfectly clear about this. The Commission will launch immediate infringement procedures against any Member State which fails to transpose on time. There will be no exceptions."
"It is worth adding that Member States who fail to transpose on time could face legal action by market participants in their own national courts. By not transposing on time, Member States are also harming the competitiveness of their own firms who will not have the passport and so will be deprived of those all-important first mover advantages. Equally, it is wholly unacceptable that Member States should refuse to accept incoming firms from Member States that are fast out of the blocks. So late transposition is a high risk strategy."
"That is why we are urgently working with Member States – in a pragmatic way – to find practical solutions to ensure that the EU passport system functions smoothly right from the word go. We will be working intensively with Member States in the coming months to make sure that MiFID is correctly transposed.".
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