Lamy aide calls for end to US ‘protectionist barricade’

Date: 06/12/01

THE US should lift its 'protectionist barricade' against European securities markets and investment funds, an aide to Trade Commissioner Pascal Lamy has warned.

Joao Aguiar Machado, head of the barriers to trade unit, said that the events of 11 September made the ability to absorb shocks "more essential than ever".

But while the EU "had been prepared to open up our markets to third countries" he said the US had so far refused to reciprocate in key areas - making it almost impossible for EU markets to get direct access to US investors and for EU investment funds to market their products.

"The issue of trading screens remains a particular concern to us. The Securities and Exchange Commission (SEC) has been extremely reluctant to allow EU exchanges to install trading screens in the US," said Machado.

Although there had been progress in the derivatives market, where bans on membership of the European Eurex, MATIF and LIFFE markets had been lifted, "even for these exchanges, the costs remain prohibitive".

Machado, who was speaking at a Brussels conference of finance specialists, said investment funds trying to make a public offer to American investors had to seek authorisation from the SEC, which compares the level of investor protection in the home country - where the investment fund is based - with standards in the US. "If by chance this first test is passed, the SEC requests the fulfilment of a long list of burdensome criteria. As a result, no European fund has ever been registered," he said.

Machado argued that the US barriers could no longer be justified in terms of quality and level of services, adding that the restrictions were harming US investors and issuers who were denied access to EU markets and funds.

At the same time the barriers slowed development of "truly global financial markets" and focused the attention of EU operators in trying to solve those hurdles, instead of finding ways of pushing ahead with the consolidation of a truly global financial market.

"In other words, it is a case of cutting your nose off to spite your face," he added.

An aide to European Commissioner for Trade, Pascal Lamy, has called for the US to lift its barriers to European securities markets and investment funds.