EC Unveils Plans For New Financial And Company Laws

by Ulrika Lomas, for LawAndTax-News.com, Brussels

09 June 2004

In a statement released last week, the European Commission revealed that good progress has been made with regard to its Financial Services Action Plan (FSAP), with around 93% of the legislative measures contained in the plan completed on schedule.

Speaking last Tuesday, Internal Market Commissioner, Frits Bolkestein observed that:

"This report brings good news. The progress already made on the FSAP is a substantial achievement by all the European Institutions and by national regulators and supervisors, based on high quality input from market participants and experts."

"But we must keep the champagne on ice for now. The time for celebration will be once all the FSAP measures are working smoothly on the ground and when Europe's economy is reaping the full benefits. I am sure that time will come, but we have a long way to go yet."

The Commission’s legislative work programme for 2004 affords high priority to the adoption of three proposals by the new European Parliament and Council this year. These are:

• Modernisation of the 8th Company Law Directive on Statutory Audit, which aims to reinforce audit quality and to restore trust in the audit function. The Commission submitted its proposal in March 2004 (see IP/04/340 and MEMO/04/60);
• Introduction of the Third Money Laundering Directive (to be proposed by the Commission shortly), which aims to reinforce measures on preventing the use of the financial system for money laundering and terrorist finance;
• Creation of a Directive on Capital Adequacy setting out revised capital requirements for banks and investment firms (CAD III), to be implemented by 2006-2007. This effort is taking place in parallel with the work of the G-10 Basel Committee to develop a new international framework and the Commission will present its legislative proposal soon after agreement in Basel.

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