Renowned for their short and punchy titles, on Tuesday the Financial Services Department of the Internal Market Directorate of the European Commission released a proposal for a directive called: the Directive of the European Parliament and of the Council amending Council Directive 92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of shareholdings in the financial sector.
Right.
What does it do then?
The proposal aims to considerably improve the legal certainty, clarity and transparency of the supervisor approval process with regard to acquisitions and increase of shareholdings in the banking, insurance and securities sectors.
Lord Woolfe eat your heart out. Whilst ploughing through this tome, it becomes clear that although the proposed directive does not contribute much to Eurojargon it does cause a vicious wound on the international plain language campaign.
Drilling down, the proposal closes the list of criteria on which an acquiring company should be assessed by a Member State authority. These criteria include the reputation of the proposed acquirer, the financial soundness of the proposed acquirer, the reputation and experience of any person that may be in charge of the resulting institution or firm, compliance with relevant EU Directives, and the risk of money laundering and financing terrorism (can't keep away that paranoid old chestnut).
The Directive reduces the assessment period from three months to 30 days and allows the supervisory authority to 'stop the clock' only once, under certain conditions. Corporate Blawg UK contends that this may lead to administrative difficulties, errors, oversights and altogether frantic inefficiency, but the Commission's risk assessment says it will not.
The Markets in Financial Instruments Directive (slightly more succinct) requires parrallel provisions for investment firms and regulated markets (Articles 10 and 38). In view of this, and further consolidation of stock markets, the Commission has promised to urgently consider whether these procedures and markets should apply to regulated markets too. They intend to facilitate the smooth functioning in the Internal Market by preventing protectionist policies in Member States. This sounds fine in principle, but how the Commission will go about it is more the worry. When investigating whether to apply these procedures to capital markets the Commission has stated that it will take into account the special nature of the business conducted on these markets, as well as the views of stakeholders and regulators, so send in your petitions now!
Hurry.
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