You are hereEC proposal to increase consumer protection in financial services
EC proposal to increase consumer protection in financial services
In the context of the ongoing discussions on improving financial regulation, the European Commission has proposed modifications to existing legislation with the primary aim of increasing consumer protection and confidence. This would ultimately contribute to enhancing stability in financial markets and preventing possible future crises as well. The legislative proposal addresses deposit guarantee and investor compensation schemes. Furthermore, the Commission adopted a White Paper on Insurance Guarantee Schemes.
On deposit guarantees, the Commission recommends to recast the 1994 Directive, including improvements on faster payouts within seven days – also across borders – and less red tape. Further, the establishment of savers’ deposit protection of up to € 100 000 in case of bank failure should be fully assured by the end of 2010. Other improvements could start being applied by 2012 or 2013.
The proposal on investor compensation amends the 1997 Directive. It suggests an increase of the level of compensation in case an investment firm is not able to return assets to an investor from currently € 20 000 to € 50 000 per investor. The text also recommends faster payment within nine months and the better provision of information for investors. Those propositions could enter into force by the end of 2012.
As a third step, the Commission adopted a White Paper on insurance guarantees, which are not subject to an EU directive yet. It proposes to offer protection to policy holders in case insurers cannot meet their contract commitment because of business closure. At the moment, 12 Member States have national insurance guarantee schemes in place, but they vary in scope and coverage. The Commission launched a public consultation on the White Paper on Insurance Guarantee Schemes that is open until the 30.11.2010.
For more information, please visit the following websites:
- Investor Compensation Scheme Directive
- Consultation on the White Paper on Insurance Guarantee Schemes
