European Internal Market Commissioner Frits Bolkestein warmly welcomed the European Parliament's backing on March 30 for the proposed update to the European Union's 1993 Investment Services Directive, and urged the Council to move quickly to adopt the new rules.

He sees the new rules as "bad news for financial wide boys - and good news for ethical operators, for the markets as a whole and for Europe's economy."

Certainly the compromise text agreed between the Parliament, the Council and the European Commission prior to the vote has helped salvage another element of the EU's Financial Services Action Plan in advance of the 2005 completion deadline. And EU finance ministers are already scheduled to review the proposal at their informal EcoFin encounter on April 2/3 in Kildare.

Once in force, it will provide investment firms with an effective "single passport" so they can operate throughout the EU on the basis of an authorisation in their home Member State. At the same time, the Parliament has also given its backing to another element in the Action Plan - the so-called Transparency Directive, which should upgrade the information available to investors across the EU.

The Commission claims that this type of financial integration could boost EU growth by 1% over a decade, and push up employment by 0.5%. Last week's EU Summit also concluded that "an effective single market for financial services...

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