EUROPE – The European directive on pension funds has now officially come into force after being published in the EU’s Official Journal.

Directive 2003/41/EC “on the activities and supervision of institutions for occupational retirement provision” was published in the Journal on September 23. The publication means that the directive is now EU law.

“The clock is ticking,” said Mark Sullivan, European partner at Mercer, adding that countries now have two years to implement the directive.

“This directive lays down rules for the taking up and pursuit of activities carried out by institutions for occupational retirement provision,” says the 12-page directive.

Sullivan said that so much has already been said about the directive that the actual publication was largely a formality. The directive had been expected for a while, and he said he’d heard there had been problems with translating the document.

Sullivan said a number of national regulators such as the UK, Ireland and Belgium were already starting to work together on common issues arising from the directive.

Meanwhile, the European Parliament has approved the Investment Services Directive. The directive aims to modernise current ISD legislation which established a "single passport" for investment firms operating in Europe.

The directive was adopted on first reading by 296 votes for with 74 against and 96 abstentions. The council of ministers will now have to come forward with its common position before a second reading in Parliament takes place. The directive will now go to EU finance ministers on October 6 for approval.

"This is a reasonable compromise,” said Christa Randzio-Plath, chair of the European Parliament's Economic and Monetary Affairs Committee.

The directive’s rapporteur to the Parliament, MEP Theresa Villiers, said: "This victory was vital in the fight to safeguard execution-only and 'direct offer' business from suitability or fact-find tests.”

The Commission’s internal market commissioner Frits Bolkestein said: "Today's vote is a real boost for our prospects of getting the Financial Services Action Plan completed by the 2005 deadline.

“I think the suggestions that we now have on our table are a very good basis for working out an acceptable compromise. I now urge the Council to move quickly to adopt its Common Position.”