FINANCIAL SERVICES: FINANCE COUNCIL UPDATES INVESTMENT FUND DIRECTIVE, WELCOMES SECURITIES GROUP.

UCITS Directive updated.EU Finance Ministers agreed that the two modifications to the Directive should ideally be adopted simultaneously, although the changes to the Collective Investment in Transferable Securities (UCITS) Directive will actually be carried out in two stages. The first proposal focuses essentially on the "product" (the investment fund) which would extend the range of financial assets in which collective investment undertakings benefiting from the single licence may invest. The Finance Council agreed to adopt the changes by October this year. The second proposal focuses on the financial intermediary which may manage UCITS (the management company) which proposes co-ordinated rules on market access and will be adopted by March 2001 - which, in turn, will trigger a review of the first one. This co-ordination, Ministers agreed, would allow a "European passport" regime equivalent to that already enjoyed by all other financial operators. It also overcomes the existing segmentation between individual and collective portfolio management. EU Single Market Commissioner Frits Bolkestein stressed that there can be no de-coupling of the two proposed amendments since both are vital if the goals of removing barriers to cross-border trading of unit trusts, greater market integration and strengthened consumer protection are to be met. Mr Bolkestein threw his weight behind a swift adoption of the proposed amendments, particularly since they form part of the Financial Services Action Plan for which Member States agreed on a 2005 implementation deadline at last March's Lisbon European Council.Securities 'Magnificent Seven'?Little is known of the specific role of the newly-formed Committee of Wise Men, which will monitor the progress of the European Commission's own scrutiny of Europe's stock markets - in the absence of any effective, central authority. But on the eve of two of Europe's bourse tie-ups (London/Frankfurt and Paris/Amsterdam/Brussels) and with the news on 18 July that the NASDAQ could even join London and Frankfurt in a three-way merger, some observers have said the Paris-based body might opposes the Commission's own progress in the area of reform. The Finance Ministers, however, endorsed the idea which came from the French Presidency itself, at least as a body that would monitor the progress of the European Commission's Financial Services Action Plan.The experts' group is due to focus on how the EU legislative framework is being...