EUROPE – The European parliament has adopted two resolutions calling for a revision of the 1993 Investment Services Directive with the new legislation relating to cross-border investments to be based on home country supervision.

The resolution, put forward by Finnish conservative member of European parliament (MEP) Piia-Noora Kauppi was approved by 406 to 62 votes, with 35 abstentions.

MEPs agreed that a light regulatory regime should apply to professional investors.
In the resolutions, the parliament also calls on the European Commission to look at the possibility of extending the system to third countries where reciprocity could be available.
With the recent report on securities services by Alexandre Lamfalussy in mind, the parliament also states that the commission’s legislative proposal should have an indication on information to be provided to investors.

European internal market Commissioner, Fritz Bolkestein, agreed with the parliament’s resolutions, and said that the aims of the single market in investment services had not been achieved by the current legislation, but produced legal uncertainty.
Bureaucracy has not been reduced either, he added, agreeing on a move towards home country supervision, with new approaches to promote transparency, integrity and protection for investors.

On the parliament’s concerns over the definition of ‘professional’ investors, Bolkestein recognised that the proposed definition would exclude numerous groups, although he said this was based on the consensus views of national regulators.
He also agreed that the Lamfalussy report’s procedures could be applied to the new legislation.