ISD Review

Published in: 

In November 2000, the European Commission announced its intention to undertake a review of the Investment Services Directive (ISD). The review is the latest example in a long series of attempts by the EU to forge its segmented national securities markets into a unified market. Since the 1960s, the EU had launched various initiatives aimed at creating a common regulatory regime for investment services. Not until the end of the 1980s, however, as part of the Single Market Programme, did these efforts achieve any result: the 1993 ISD.

All debates on the shape of an EU regulatory regime have been characterised by profound divergences of views on how to handle competition in the securities trading field. In the 1960s, this took the form of debating the pros and cons of concentration rules, i.e. requiring all trade orders to be routed to a stock exchange. This debate and the ensuing division between member states were repeated in the discussions leading up to the 1993 Directive. Following a decade of profound market change, the debate during the current review has focused on transparency requirements. By linking fragmented markets together, these offer the prospect of reconciling the benefits of competition with the benefits of informative central prices. The debates on their content and allocation mirror those of earlier decades, however, with some member states stressing the value of competition, and hence hesitating to extend a comprehensive regime to all market participants, and other members emphasising the importance of market integrity and investor protection, and accordingly promoting wide-ranging transparency rules.   


  • Mattias Levin, Research Fellow, CEPS  

Task Force Meetings

  • 1st meeting: 2 Oct 2002
  • 2nd meeting: 9 Dec 2002
  • 3rd meeting: 31 Mar 2003  

Final Report of the Task Force: 'Competition, Fragmentation and Transparency: Providing the Regulatory Framework for Fair, Efficient and Dynamic European Securities Markets