Proposed EC Directive on the distance selling of financial services
| Date | 01 January 2001 |
| Pages | 56-66 |
| Published date | 01 January 2001 |
| DOI | https://doi.org/10.1108/eb025062 |
| Author | Alan Davis |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 9 Number 1
Proposed EC Directive on the distance
selling of financial services
Alan Davis
Received (in revised form): 15th November, 2000
Denton Wilde Sapte, One Fleet Place, London EC4M 7WS; tel: 020 7246 7000; fax: 020 7246 7777;
e-mail:apd@dentonwildesapte.com
Alan Davis is a senior solicitor with the EC
& Competition Group of City law firm,
Denton Wilde Sapte, in London. He was
previously based in Brussels for six years
where he spent more than a year with the
European Commission and the remainder
of the time in private practice advising
multinational companies on EC law and
competition law. He has specialist experi-
ence of the banking and financial services,
aviation and manufacturing sectors. In
addition to advising on EC and UK compe-
tition law (including merger control, joint
ventures, and anti-competitive agreements
and practices and abuse of market power)
he regularly advises clients on a variety of
EC law and regulations including banking
law, consumer law, e-commerce issues,
legal aspects of the European single
cur-
rency, the free movement of goods and
technical harmonisation. While he was
with the European Commission, he was
involved in the drafting of the original
directive on distance selling.
ABSTRACT
The European Commission has published a
revised
proposal for a European Parliament and
Council directive to harmonise member states'
rules on consumer protection in relation to the
distance marketing of financial services. Finan-
cial services had been specifically excluded from
the scope of the Distance Selling Directive
which came
into
force in the UK on 31st Octo-
ber, 2000. Included in the proposal is the right
of
a
consumer to receive a comprehensive set of
information about the financial services supplier
and the contract before the contract has been
concluded, and the right to withdraw from the
contract without penalty during a period of 14
days after entering into the contract. Questions
have arisen as to whether the proposal is an
example of wholly unnecessary intervention at
European level and whether it is introducing
unnecessary red tape for the financial services
industry. One of the most important problems
with the proposal relates, however, to
a
funda-
mental disagreement between member states as
to whether the directive should be a maximum
harmonisation measure or simply minimum har-
monisation. With the
current protracted
state of
negotiations, it remains unclear as to whether
this proposal will ever achieve political agree-
ment.
INTRODUCTION
Banks and financial services providers are
now at the forefront of those seeking to
exploit the potential of the Internet and
generate new revenue streams. The Inter-
net is well suited to selling financial ser-
vices.
Internet share dealing and on-line
banking is booming and other financial ser-
vices are increasingly attracted to the on-
line environment.
The Internet assists information flow —
it has led to customers becoming more
well-informed about products and services
Journal of Financial Regulation
and Compliance, Vol. 9, No. 1,
2001,
pp. 56-66
© Henry Stewart Publications,
1353-1983
Page 56
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