xv-follow-up1987-11-11-xv-73-87-redacted
Dieses Dokument ist Teil der Anfrage „Ergebnisse von Konsultationen“
Ref. Ares(2023)3725176 - 30/05/2023
Brussels, 11.11 .87
COMMISSION
OF THE EUROPEAN CC/zp
COMMUNITIES
Directorate-General
Financial Institutions
and Company law
XV/A/3
NOTE TO
Re: Investment Services
Following our last meeting I have prepared a new version of working document
n° 4 which· I attach hereto. I would welcome your comments and those of the
other persons mentioned below.,
I am now working on’the "discussion document" which .will accompany this text.
Provisional address Rue de la Loi 200 · 0-1049 Brussels - Belgium - Telephone direct line 23 telephone exchange 235 11 11 · 236 11 11
Telex COMEU B 21877 - Telegraphic address COMEUR Brussels
11 November 1987
ļ
Uorking document n° 4 ■
— "
PROPOSAL FOR A DIRECTIVE ON
THE PROVISION OF ļcertainļ INVESTMENT SERVICES
TO THE PUBLIC
TITLE I
Scope and definitions
Article 1
This Directive shall apply to persons providing one or
more of the fotlowihg. investment·, services .to | publici
investors within the Community :
(a) brokerage i.e. the acceptance of investors’ orders
relating to transferable securities and/or the
execution of such orders on the exchange or market
on an agency basis against payment of commission;
(b) dealing as principal i.e. the execution of
investors' orders relating to transactions in
transferable securities by the person himself for
his own account and at his own risk with a view to
profiting from the margin between bid and offer
prices ;
2
(c) majset making i.e. the maintenance of a market in
certain transferable securities by the person
himself buying and selling such securities on his
own account and at his own risk at a price fixed by
him in the light of the state of the market;
(d) portfolio management i.e. the management of
portfolios of transferable securities undertaken
separately for individual investors against payment
of a management fee.
Article 2
For the purposes of this Directive :
(a) "person" shall mean legal or natural person;
•(b) "home Member .-State" 'shall mean : · '
-where the person.providing the investment service
is a company, the Member State in which its
registered office is situated ;
- where the person providing the investment service
is a firm, the Member State in which its policy
is effectively determined ;
- where the person providing the investment service
is an indi vidual, the Member State of his
resi dene e.
(c) "host Member State" shall mean a Member State where
the person authorized in the home Member State has
a branch and/or into which he provides investment
services on a cross-frontier basis;
3
(d) "transíerab le securities'^ shall mean shares in
companies and marketable securities equivalent to
shares in companies, debt securities having a
maturity of at Least one year and other marketable
securities equivalent to such debt securities, and
any other marketable security giving the right to
acquire any such marketable securities by
subscription or exchange.
TITLE II
Aut hori zat ion
Artide 3
1. Ä . person' wishing to provide one ór more of the
• investment · .servi ceš referred to in Article 1 within
the Community . shall first· be· authorized to that
• effect by the competent authorities of the home
Member State whether or not the service in question
ís to be provided there. Such authorization shall be
valid for all Member Stateś.
2. The competent authorities to which an application
for authorization is made may only grant such
aut hor i zat ion if.:
a) a document describing, the relevant investment
service is submitted to them; and
b) they consider the applicant to be a fit and
proper person to provide the type of investment
service in question.
4
3- Member States shall ensure that conditions are drawn
up and published for determining whether persons are
fit and proper having regard to the type of
investment service in question. Such conditions
shall be of general application.
4- Such conditions shall include requirements that the
applicant:
- has sufficient financial resources having regard j
to the nature and extent of the risk to which he
will be exposed in providing the investment
service in question;
is a person of integrity; 7 _
—— -------------------- r'^
- has appropriate training and experience-
In the case' of an applicant which is a |company|
[legal personi the conditions mentioned in the
second and third hyphens above shall apply to its
directors and managers.
5. Authorization may be suspended or revoked if any of
the conditions upon which it was granted are no
longer fulfilled or if the conduct of business rules
referred to in Article 4 are not respected.
6. Any refusal, suspension or revocation of an
authorization shall be accompanied by the reasons
therefor, and Member States shall provide for the
right to apply to the courts in respect thereof.
7. For the purposes of this Directive the competent
authorities may be professional associations
provided that they are authorized by national law to
grant authorization as required by this Directive.
TITLE III
Conduct of business fules
Art i cle 4
1. Each Member State shall ensure that conduct of
business rules are drawn up and published which are
appropriate to protect investors having regard to
e . the nature of the investment service provided in its
territory. ■ '
2. The competent authorities of the .Member State of
authorization, shall be responsible for ensuring
compliance with such conduct of business rules
wherever the relevant investment service is provided
in the Community to the exclusion of the competent
authorities of any of the other Member States.
3. Such conduct of business rules shall include at
least the following requirements :
a) in respect of brokerage:
(i) the authorized person must act solely in
the interest of the investor;
(ii) prior to executing the transaction he must
inform the investor of the capacity in
which he is acting, the number and type of
transferable securities proposed to be
purchased or sold, the basis on which
commission is to be paid, the market on
which the transaction is to be executed and
the basis on which the purchase or sale
price will be sought (e.g. opening price,
closing price or best available market
pri ce);
(iii) following the transaction he must inform
the investor of all relevant details
concerning the transaction including the
name and amount of transferable securities
purchased or sold,· the price, the
settlement date and commission payable: ä
(iv) he must make arrangements for money and
securities belonging to investors to be
kept in safe keeping separately from his
own money and securities;
I(y) where individuals deal with investors on
behalf of the authorized person they must
inform the investor of the name of the
company or firm they represent;!
(vi) he must either be a member of a general
compensation scheme designed to protect
investors in case of default or make
individual arrangements which provide
investors with equivalent protection.
b) in respect of dealing as principal:
(i) prior to executing the transaction the
authorized person must inform the investor
of the capacity in which he is acting, the i
__------------------------------------------------------------ / Q
number and type of transferable securities \ z
proposed to be purchased or sold, the basis
on which commission is to be paid, the
purchase or sale price, land whether the
person is long or short of the investments
proposed I ;
(ii) following the transaction he must inform
the investor of all relevant details
concerning the transaction including the
name and amount of transferable securities
•purchased or sold, the price,' the
settlement date and commission payable;
(iii) he· must make" arrangements for ' money and
securities belonging to investors to be
kept in safe keeping separately from his
own money and securities;
(iv) he must either be a member of a general
compensation scheme designed to protect
investors in case of default or make
individual arrangements which provide
investors with equivalent protection.
c) in respect of market making:
(i) the authorized person must stand ready
during normal business hours to quote
prices in reasonable size for the purchase
- 8 -
and sale of the transferable securities in
respect of which ~he has agreed to make a
market;
(ii) if the authorized person wishes to cease
making a market in some or all of such
securities he shall be free to do so but he
may not recommence market making in the
securities in question until a period of
three months has elapsed.
d) in respect of portfolio management:
(i) the authorized person must act solely in
the interest of the investor;
- ------- ■------ :------ —
(ii) prior to entering into an initial contact
with the investor he· shall inform the
ƒ latter of the .basis on which the management
• fee is to b.e_M±Guiated;
_—— ·
(iii) he shall provide periodic statements to
investors concerning the state of their
portfolios, and giving all relevant details
of transactions carried out during the
period in que st ion;
(iv) he must make arrangements for money and
securities belonging to investors to be
kept in safekeeping separately from his own
money and securities.
- 9 -
(v) he must either be a member of a general
compensation scheme designed to protect
investors in case of default or make
individual arrangements which provide
investors with equivalent protection.
4. The conduct of business rules shall also respect the
fol lowing criteria:
a) they shall be of general application;
b) they shall ensure that the conditions upon which
the initial authorization was granted continue
to be respected;
c) they shall not include any provision the ėffect
of which is to'make it a practical necessity for
the person providing the relevant investment
.service to.become established in. a’host Member
State; - . · ' . ·
d) they shall permit the advertisement of the
relevant financial service in accordance with
provisions governing advertising in the host
Member State.
