FINANCIAL SERVICES: COMMISSION UNVEILS STRATEGY TO PROMOTE E-COMMERCE.

The approach outlined in the Commission Communication dated 9 February 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). This should ensure a level playing field between on-line and more traditional modes of distance trade. Underpinning the strategy is 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 offers clarification of the impact on financial services of the e-commerce legal framework Directive 2001/31/EC (adopted on 8 June 2000 and due to come into force on 17 January 2002) and its interaction with other financial services legislation and contains steps to ensure that its implementation in the financial services area takes full account of the need to protect consumers and retail investors operating on-line within the European Union.The Commission points out that obstacles to both cross-border supply and demand mean that currently there is no significant cross-border trade in retail financial services. In order to end the current fragmentation in retail financial markets, the Commission envisages a three-strand approach:- 1. A programme of convergence covering contractual and non-contractual rules In the non-contractual sphere, harmonisation of key marketing rules in the proposed Distance Marketing Directive and approximation of the conduct of business rules protecting investors are of paramount importance. Additional measures are required at the sectoral level focusing on the provision of high quality and comparable information to consumers. The Commission believes this convergence of rules should pave...