The Investment Services Directive ‐ Routemap or obstacle course?

The EU’s Financial Services Action Plan (FSAP) which seeks to harmonise financial services across Europe has the potential to bring great benefits to the investment community ‐ particularly the UK which already has a wealth of expertise. But in order for it to succeed the rule makers need to recognise some basic principles ‐ principally that they should focus on what is necessary to achieve their goal, rather than what is merely desirable. This paper outlines these principles of successful regulation and looks specifically at some of the problems in the most controversial of the current proposals ‐ the Investment Services Directive (ISD).