The European Commission is aiming for an integrated European market
in on-line financial services by 2005. It has set out a strategy
for a regulatory and supervisory environment which it says will
encourage the development of e-commerce in financial services and
build consumer confidence.
The approach outlined in a Commission Communication is based on
the principle that the trading rules applied to the cross-border
sale and purchase of financial services should be those of the
Member State where the service provider is established (i.e. the
country of origin).
The Commission says this should ensure a level playing field
between on-line and more traditional modes of distance trade. The
strategy is supported by a series of measures designed to enhance
consumer confidence and protection, including further harmonisation
of national consumer and investor protection rules, the
establishment of out-of-court redress, measures to build trust in
internet payments and enhanced co-operation between public
authorities responsible for the supervision of cross-border trade
in financial services.
The Communication also provides clarification of the impact on
financial services of the E-commerce Directive which has to be
implemented by Member States by 17th January 2002, in addition to
its interaction with other financial services legislation.
Obstacles to both cross-border supply and demand mean that
currently there is no significant cross-border trade in retail
financial services. The development of e-commerce, together with
the introduction of the euro, transforms the business environment
and brings an integrated European market in retail financial
services within the Union's grasp. The objective of the
Commission's Communication is to establish a policy framework that
enables consumers and retail investors to access financial services
available from throughout the European Union while being fully
protected.
