A new report from the European Commission says that a huge gap remains between the goal of creating ...
A new report from the European Commission says that a huge gap remains between the goal of creating a single market and the reality most consumers still experience when buying services, including financial services.
The report, titled The State of the Internal Market for Services, says that 70% of the EU's economy is made up of services, but that internal market barriers hit services harder than goods and take place at every stage of the business process.
"For example, requirements relating to authorisation or professional qualifications, restrictions on the use of a certain legal form for the service provider or on the partnerships between different professions," all contribute to these barriers the EC says.
Other problems identified include "numbers of authorisations required", "length and complexity of procedures" and "discretionary powers of local authorities".
IFAs will recognise many of these difficulties even when just talking about the UK market.
Things could get more ugly before they improve, however, as the FSA indicated yesterday that it was reviewing listing rules for companies listed on the London Stock Exchange partly in order to head off EU reform proposals.
That means a clash between the local regulator and the EC over the speed of reforming the internal market looks increasingly inevitable.
The Commission stresses that its review of service levels across the EU does not mean it wants to reduce consumer protection in order to speed integration on - a view that sits will with the FSA's commitments to consumer rights.
But the EC warns that domestic regulatory regimes must be reformed quickly in order to avoid total gridlock when further members join the union.
"Problems will multiply with enlargement," it says.
The Commission says it intends to put forward a "framework for actions" by next year, which will involve calling for submissions from interested parties, in effect a call for lobbying by different groups to affect the drafting of the new laws that will ultimately go to a vote before the EU parliament.
IFAs will also be particularly affected by the report's note that the Commission wants to get rid of monopolies including "a monopoly on the distribution of certain products, which would affect distribution services in particular or activities reserved exclusively for certain operators."
The report identifies those "products" and "activities" are relating particularly to alcohol, tobacco, gambling and distribution of pharmaceutical products, but the language mirrors that used by the Office of Fair Trading in the UK when it kicked off the depolarisation process.
The Commission identifies pensions as another area where current regulations are causing concern, noting that "diversities between pension schemes and obstacles to the transfer of supplementary pensions" could be restricting cross-border mobility and workers rights, preventing pensions providers operating in different member states from "centralising their pension management systems".
Insurance is also under the microscope because of differences in contract law between member states, as the Commission says current rules "make it impossible to use standard contracts throughout the internal market."
Overall, the Commission says it surveyed more than 6,000 companies in order to come to its conclusion that the internal market is still being encumbered by outdated business rules and practices, which it intends to get rid of.
200,000 LISAs opened so far
From June 2019
11 years since launch of three Chartered titles
Hired 200 extra operational staff
Slow progress in improving diversity