Summary: When the Investment Services Directive was negotiated in 1993, the European Commission was instructed to report on the Directive's subsequent application across certain specific questions, and to propose amendments, if necessary, within five years. It has now completed a survey of the Directive's operation, and the Commission services responsible are recommending that no change is needed. The Commission as a whole will take a formal decision shortly.

The Investment Services Directive (93/22/EEC), which came into force in January 1996 (although practically all countries were given at least one derogation), was designed to harmonise Member States' rules on financial services companies so they would be free to trade in any EU country. It gives a whole range of investment service companies (order collectors, brokers, dealers, portfolio managers and issue underwriters) access to a "single passport" that will allow them to ply their trade in any Member State under the principle of "home country control" (although host countries are able to apply certain conduct rules, providing these are not "excessive"). One of its practical consequences has been to permit exchanges to provide electronic screens for traders in other Member States. Natural persons: The Commission is required to report on whether difficulties have arisen in the provisions that allow natural persons to be included in the definition of "investment firm". In fact, the possibility of authorising persons other than legal persons has not been raised in most Member States, and many have simply excluded the possibility. Germany and the Netherlands allow it, Luxembourg allows it for commission...

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