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Financial Services Law

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Abstract

The chapter focuses on recent developments in the legislation and case-law in the field of financial services law. Section 2 provides an overview of selected acts of EEA financial services legislation and recent reform proposals thereto. Section 3 analyses three landmark decisions of the EFTA Court that addressed the legal consequences of the world financial crises. The last section then investigates the practice of ESA in the financial services sector.

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Notes

  1. 1.

    Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).

  2. 2.

    See Recitals of the UCITS I Directive. The regulatory harmonisation of non-UCITS was eventually effected by Directive 2011/61/EU on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (‘AIFMD’) which is however not yet incorporated into the EEA.

  3. 3.

    See Article 46 of the UCITS I Directive.

  4. 4.

    See Article 19 et seq. of the UCITS I Directive.

  5. 5.

    See Article 24 of the UCITS I Directive.

  6. 6.

    Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with regard to investments of UCITS.

  7. 7.

    See Recital 2 of the Product Directive.

  8. 8.

    Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses.

  9. 9.

    See Recital 9 of the Management Company Directive.

  10. 10.

    See Recital 6 of the Management Company Directive.

  11. 11.

    See Recital 15 of the Management Company Directive.

  12. 12.

    COM(2005) 314 final.

  13. 13.

    See Recitals 1 and 2 of the UCITS IV Directive.

  14. 14.

    See JCD Decision No 120/2010 of 10 November 2010 amending Annex IX (Financial services) to the EEA Agreement, p. 1.

  15. 15.

    See Article 50(1) of the UCITS IV Directive.

  16. 16.

    See Article 1 of the UCITS IV Directive.

  17. 17.

    See Article 2(1)(b) of the UCITS IV Directive.

  18. 18.

    See Articles 22(1) and 32(1) of the UCITS IV Directive.

  19. 19.

    See Articles 24 and 34 of the UCITS IV Directive.

  20. 20.

    See Articles 22(2) and 32(2) of the UCITS IV Directive.

  21. 21.

    See Article 5 of the UCITS IV Directive.

  22. 22.

    See Article 91 et seq. of the UCITS IV Directive.

  23. 23.

    See Articles 6 and 7 of the UCITS IV Directive.

  24. 24.

    See Article 16 et seq. of the UCITS IV Directive.

  25. 25.

    See Article 16(1) in connection with Article 91 et seq. of the UCITS IV Directive.

  26. 26.

    See Article 68 et seq. of the UCITS IV Directive.

  27. 27.

    See Article 78 et seq. of the UCITS IV Directive.

  28. 28.

    See Article 37 et seq. and Article 58 et seq. of the UCITS IV Directive.

  29. 29.

    See Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions (COM(2012)350 final), p. 2.

  30. 30.

    See Recital 1 of the proposed UCITS V Directive.

  31. 31.

    See Recital 7 of the proposed UCITS V Directive.

  32. 32.

    See Recital 2 of the proposed UCITS V Directive.

  33. 33.

    See Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions (COM(2012)350 final), p. 9.

  34. 34.

    See Consultation Document of the European Commission of 26 July 2012 on Undertakings for Collective Investments in Transferable Securities (UCITS) (Product Rules, Liquidity Management, Depositary, Money Market Funds, Long-term Investments), p. 3.

  35. 35.

    See Recital 1 of MiFID.

  36. 36.

    See Recital 2 of MiFID.

  37. 37.

    See Articles 1 and 4 of MiFID.

  38. 38.

    See Article 5(1) of MiFID.

  39. 39.

    See Article 6(1) of MiFID.

  40. 40.

    See Article 7(3) of MiFID.

  41. 41.

    See Article 32 of MiFID.

  42. 42.

    See Article 31 of MiFID.

  43. 43.

    See Article 6(3) of MiFID.

  44. 44.

    See Articles 11, 12 and 13 of MiFID.

  45. 45.

    See Article 16 et seq. MiFID.

  46. 46.

    See Article 19(1) and (4) MiFID.

  47. 47.

    See Article 21(1) and (2) of MiFID.

  48. 48.

    Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions.

  49. 49.

    See Article 1(2) of MiFID.

  50. 50.

    See Articles 1(1), 4 and 36 et seq. of MiFID.

  51. 51.

    See Press release of the European Commission of 8 December 2010 (IP/10/1677).

  52. 52.

    COM(2011) 656 final.

  53. 53.

    COM(2011) 652 final.

  54. 54.

    See COM(2011) 656 final, p. 6 et seq.

  55. 55.

    Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering.

  56. 56.

    Directive 2001/97/EC of the European Parliament and of the Council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering.

  57. 57.

    See Proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering, including terrorist financing (COM(2004) 448 final), p. 2.

  58. 58.

    See Article 2 of the Third Anti-Money Laundering Directive.

  59. 59.

    See Articles 7 and 8 of the Third Anti-Money Laundering Directive.

  60. 60.

    See Article 11 et seq. of the Third Anti-Money Laundering Directive.

  61. 61.

    See Article 14 et seq. of the Third Anti-Money Laundering Directive.

  62. 62.

    See Article 20 et seq. of the Third Anti-Money Laundering Directive.

  63. 63.

    See Articles 21 and 22 of the Third Anti-Money Laundering Directive.

  64. 64.

    See Article 28(1) of the Third Anti-Money Laundering Directive.

  65. 65.

    See Article 30 et seq. of the Third Anti-Money Laundering Directive.

  66. 66.

    COM(2013) 45 final.

  67. 67.

    See Press release of the European Commission of 5 February 2013 (IP/13/87).

  68. 68.

    See COM(2013) 45 final, p. 9 et seq.

  69. 69.

    See Recital 9 to and Article 3(4)(f) of the proposed Forth Anti-Money Laundering Directive (2013/0025 (COD)).

  70. 70.

    See Sect. 3.2 in this chapter.

  71. 71.

    See http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Annexes%20to%20the%20Agreement/annex9.pdf.

  72. 72.

    Case E-16/11 ESA v. Iceland (‘Icesave’) [2013] EFTA Ct. Rep. 4.

  73. 73.

    Case E-18/11 Irish Bank Resolution Corporation Ltd v. Kaupthing Bank hf. [2012] EFTA Ct. Rep. 592.

  74. 74.

    Case E-11/12 Beatrix Koch, Dipl. Kfm. Lothar Hummel and Stefan Müller v. Swiss Life (Liechtenstein) AG [2013]EFTA Ct. Rep. 272.

  75. 75.

    Case E-16/11 Icesave, cited above.

  76. 76.

    For a detailed account of the events leading up to the crisis, see Viterbo (2011), pp. 215–218.

  77. 77.

    European Parliament and Council Directive 94/19/EC of 30 May 1994 on deposit-guarantee schemes [1994] OJ L135/5. With regard to the historical background of this Directive, see Cariboni et al. (2008), pp. 84–85.

  78. 78.

    Following two referenda rejecting the trilateral agreement struck between Iceland, the Netherlands and the United Kingdom. The proposed agreement has since been criticised for breaching EU/EEA law, see the detailed analysis provided by Orebech (2010), pp. 127–152.

  79. 79.

    See Méndez-Pinedo (2013), p. 104, emphasising that a different method of compensating non-domestic depositors had been chosen due to the systemic nature of the crisis.

  80. 80.

    See also Ayadi and Lastra (2010), pp. 215–217; Cariboni et al. (2008), pp. 87–89.

  81. 81.

    See also Méndez-Pinedo (2013), pp. 105–106.

  82. 82.

    See Gunnarsson (2011), pp. 28–31, reasoning that the wording of the 24th recital and the Directive in general supports the view that State liability is not intended in such cases. See also Orebech (2010), pp. 141–145, making additional reference to competition.

  83. 83.

    For more details, see Viterbo (2011), pp. 219–220.

  84. 84.

    See also Méndez-Pinedo (2013), pp. 106–109, emphasising arguments in favour of the judgment reached by the EFTA Court.

  85. 85.

    See both Orebech (2010), pp. 130–131; and Méndez-Pinedo (2013), pp. 109–110, highlighting that depositors (domestic and non-domestic, residents and non-residents in Iceland) were not in comparable situations from the outset.

  86. 86.

    See Gunnarsson (2011), p. 32, pointing out that all of the depositors had in fact been treated equally as they all received priority claims.

  87. 87.

    It should be noted that there has been discussion about introducing an EU/EEA-wide deposit guarantee scheme, see for example Smits (2014), pp. 149–150; and Ayadi and Lastra (2010), pp. 219–220. While no such proposal has yet been submitted by the Commission, action has been taken in regard to deposit guarantee schemes, see European Parliament and Council Directive 2014/49/EU of 16 April 2014 on deposit guarantee schemes (recast) [2014] OJ L173/149.

  88. 88.

    With regard to the possible means of funding, see Cariboni et al. (2008), pp. 92–95.

    See also Ayadi and Lastra (2010), p. 217.

  89. 89.

    Case E-18/11 Irish Bank Resolution Corporation Ltd v. Kaupthing Bank hf, cited above.

  90. 90.

    European Parliament and Council Directive 2001/24/EC of 4 April 2001 on the reorganisation and winding up of credit institutions [2001] OJ L125/15.

  91. 91.

    Consolidated Version of the Treaty on European Union [2012] OJ C326/47.

  92. 92.

    The Surveillance and Court Agreement (consolidated), Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice [1994] OJ L344/3, as amended.

  93. 93.

    See also Baudenbacher (2013), p. 195.

  94. 94.

    Case E-18/11 Irish Bank Resolution Corporation Ltd v. Kaupthing Bank hf, cited above.

  95. 95.

    See also Baudenbacher (2013), p. 195, with further references.

  96. 96.

    Case E-11/12 Beatrix Koch, Dipl. Kfm. Lothar Hummel and Stefan Müller v. Swiss Life (Liechtenstein) AG, cited above.

  97. 97.

    Council Directive 90/619/EEC of 8 November 1990 on the coordination of laws, regulations and administrative provisions relating to direct life assurance, laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC [1990] OJ L330/50 and Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance Directive) [1992] OJ L360/1; later replaced by European Parliament and Council Directive 2002/83/EC of 5 November 2002 concerning life assurance [2002] OJ L345/1.

  98. 98.

    Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) [1985] OJ L375/3.

  99. 99.

    See http://www.eftasurv.int/about-the-authority/the-authority-at-a-glance-/.

  100. 100.

    See Annual Report 2011 of the EFTA Surveillance Authority, p. 10 (available at www.eftasurv.int).

  101. 101.

    See http://www.eftasurv.int/internal-market-affairs/the-internal-market/.

  102. 102.

    See Annual Report 2011 of the EFTA Surveillance Authority, p. 10, and Annual Report 2004 of the EFTA Surveillance Authority, p. 19 (available at www.eftasurv.int).

  103. 103.

    See Annual Report 1998 of the EFTA Surveillance Authority, p. 46 (available at www.eftasurv.int).

  104. 104.

    See Annual Report 1999 of the EFTA Surveillance Authority, p. 48 (available at www.eftasurv.int).

  105. 105.

    See Annual Report 1999 of the EFTA Surveillance Authority, p. 50 (available at www.eftasurv.int).

  106. 106.

    See Annual Report 2001 of the EFTA Surveillance Authority, p. 46 (available at www.eftasurv.int).

  107. 107.

    See Annual Report 1999 of the EFTA Surveillance Authority, p. 48 (available at www.eftasurv.int).

  108. 108.

    See Annual Report 2000 of the EFTA Surveillance Authority, p. 37 (available at www.eftasurv.int).

  109. 109.

    See Annual Report 2001 of the EFTA Surveillance Authority, p. 44 (available at www.eftasurv.int).

  110. 110.

    See Annual Report 1998 of the EFTA Surveillance Authority, p. 46 (available at www.eftasurv.int).

  111. 111.

    See Annual Report 1999 of the EFTA Surveillance Authority, p. 48 (available at www.eftasurv.int).

  112. 112.

    See Annual Report 1999 of the EFTA Surveillance Authority, p. 50 (available at www.eftasurv.int).

  113. 113.

    See Annual Report 2002 of the EFTA Surveillance Authority, p. 43 (available at www.eftasurv.int).

  114. 114.

    COM(1999) 232.

  115. 115.

    See Annual Report 2006 of the EFTA Surveillance Authority, p. 23 (available at www.eftasurv.int).

  116. 116.

    See Annual Report 2007 of the EFTA Surveillance Authority, p. 27 (available at www.eftasurv.int). Please note that the FSAP review project is still on-going and that a substantial part of the ESA’s resources has continued to be devoted to this project up to date.

  117. 117.

    See Annual Report 2008 of the EFTA Surveillance Authority, p. 15 (available at www.eftasurv.int).

  118. 118.

    See Annual Report 2009 of the EFTA Surveillance Authority, p. 16 (available at www.eftasurv.int).

  119. 119.

    See Annual Report 2010 of the EFTA Surveillance Authority, p. 17 et seq. (available at www.eftasurv.int).

  120. 120.

    See Annual Report 2011 of the EFTA Surveillance Authority, p. 12 et seq. (available at www.eftasurv.int).

  121. 121.

    See Case E-16/11 Icesave, cited above.

  122. 122.

    See Press release of the EFTA Surveillance Authority of 28 January 2013 (PR(13)04).

  123. 123.

    See Annual Report 2010 of the EFTA Surveillance Authority, p. 50 (available at www.eftasurv.int).

  124. 124.

    Case E-11/13 ESA v. Iceland [2013] EFTA Ct. Rep. 848., Case E-12/13 ESA v. Iceland [2014] EFTA Ct. Rep. 58., Case E-13/13 ESA v. Norway [2013] EFTA Ct. Rep. 914 and Case E-17/13 ESA v. Iceland [2013] EFTA Ct. Rep. 954.

  125. 125.

    See Annual Report 2013 of the EFTA Surveillance Authority, p. 52 (available at www.eftasurv.int).

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  1. University of Liechtenstein, Vaduz, Liechtenstein

    Francesco A. Schurr

  2. Gasser Partner, Vaduz, Liechtenstein

    Johannes Gasser

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  1. EFTA Court, Luxembourg, Luxembourg

    Carl Baudenbacher

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Schurr, F.A., Gasser, J. (2016). Financial Services Law. In: Baudenbacher, C. (eds) The Handbook of EEA Law. Springer, Cham. https://doi.org/10.1007/978-3-319-24343-6_30

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