Barriers to business finance in spotlight

By Peter Chapman

Date: 04/11/04

EUROPEAN securities exchanges and the regulators governing them have stepped up efforts to get rid of the barriers holding back the EU's fledgling single market for financial services.

The two groups have launched separate efforts to cut down costly differences between jurisdictions.

Paul Arlman, secretary-general of the Federation of European Securities Exchanges, said that his organization was touting an informal 'ombudsman' to help to thrash out practical problems faced by market practitioners attempting to exercise rights supposedly enshrined in EU law.

The Committee of European Securities Regulators (CESR), which helps to flesh out securities market legislation and acts to ensure the smooth day-to-day running of legislation, wants to set up a mediation system to help sort out differences in opinion on how EU-based legislation should be applied.

Officials said that the mediators would likely be drawn from the ranks of fellow regulators. But CESR said that it would consult the EU institutions and industry on the next steps.

Arlman said the ombudsman scheme would sort out many of the problems between market operators and regulators in a fraction of the time it would take to fight court battles nationally or in European courts - a process usually handled by the Commission after lengthy deliberations.

For example, he said, registered brokers from other member states had faced delays trying to gain access to Spanish and Italian markets, even though the EU's investment services directive states that they should automatically be able to obtain a 'passport' for operating in another member state.

"One has spent a fortune translating stuff into the local language, the other one is still working on it - that is not an efficient passport," said Arlman.

He claimed the plan would "sink" if the EU institutions and regulators opposed it.

Arlman said that Frits Bolkestein, the outgoing commissioner for the internal market, had expressed initial interest in the ombudsman plan.

Passports are a crucial part of other rules in the financial services market, such as the law governing the sale of unit-linked investments known as UCITS.

Article reports that European securities exchanges and the regulators governing them launched initiatives to get rid of the barriers to the EU's single market for financial services. While operators introduced an informal ombudsman scheme, regulators planned to set up a mediation system.