Bid to open on-line finance services market

Date: 01/02/01

By Peter Chapman

Financial services chief Frits Bolkestein is pushing for measures to keep member states from imposing a myriad of national rules and regulations on banks, insurance companies and investment houses selling their products across borders over the Internet.

In a paper to be unveiled next week, Bolkestein calls for a review of barriers to financial services that are currently exempt from the EU's directive on e-commerce, which allows firms to operate legally across all member states provided they follow the rules and regulations in their 'country of origin'.

Sources say Bolkestein is most concerned about special exemptions allowing member states to impose domestic consumer and investor protection rules on firms. He highlights the need for swift adoption of measures to harmonise or 'converge' financial services laws in a bid to reduce opportunities for governments to apply different regulations.

The hit list of pending action includes rules on distance selling of financial services, mortgage and consumer credit, investment services and insurance. Bolkestein also will announce a review of consumer contracts in a bid to highlight potential barriers caused by divergent national rules governing everything from the terms of a bank loan to interest-bearing current accounts.

This could lead to proposals calling on member states to 'mutually recognise' the rules of other countries - allowing companies to sell their products abroad without having to meet foreign laws.

In an interim step, Bolkestein promises guidance to member states this year on which types of rules should be exempt from the e-commerce directive. This could prevent member states from imposing measures designed to ward off foreign competition.

Banking industry insiders this week gave a cautious welcome to the proposal.

Financial services chief Frits Bolkestein is pushing for measures to keep Member States from imposing a myriad of national rules and regulations on banks, insurance companies and investment houses selling their products across borders over the Internet.