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Information disclosure requirements are a relatively common feature of consumer protection regimes generally. In the case of retail investment products such requirements have been in place since the late 1980s. Now the European Distance Marketing of Financial Services Directive will impose a similar disclosure regime wherever a contract is concluded at a distance. But, despite the popularity of disclosure regimes with policy makers, the available evidence suggests that such regimes may not be particularly effective. The purpose of this paper is to discuss first, the extent to which disclosure regimes are underpinned by a solid understanding of consumer decision‐making behaviour, and secondly, the implications the development of the internet as a delivery channel for retail investment products might have for their effectiveness. The paper concludes that, despite the indeterminacy of consumer decision‐making research such that it fails to provide a ready model on which to (re)design disclosure regimes, the development of the internet as a delivery channel both compounds the challenges for the regulator in devising an effective disclosure regime, but also provides the regulator with an opportunity to explore the potential to deliver interactive capabilities which would enhance the potential to better influence consumer decision making. As such, the paper should be of interest to regulators, the industry (which has expressed doubts about the cost‐effectiveness of such regimes) as well as academics interested in regulatory policy.

To describe the 5th May 2006 ECOFIN conclusions on supervisory convergence and explain why they represent a new departure for European financial services work.

The article outlines the 6th 2006 ECOFIN conclusions relating to supervisory convergence. It then reviews EU developments relating to supervisory convergence from the 2001 Lamfalussy Process onwards as context for the conclusions. Finally, in the light of the review and the description of the conclusions it draws some conclusions about the likely implications for further developments in the EU in relation to EU supervisory convergence.

The principal findings are that supervisory convergence is likely to increase due to enhanced political backing with member state finance ministries and regulators taking a leading role.

As this is the first paper on the ECOFIN conclusions there is considerable scope for ongoing research to establish the extent to which the predictions in the paper prove to be justified by future developments.

The ECOFIN conclusions represent a departure from EU financial services work focused on a legislative programme, the Financial Services Action Plan, to a programme focusing on improving cross‐border relationships between supervisors. This has important implications for the key European actors and gives a strong role to national finance ministries and supervisors. The practical implications will be enhanced cooperation between national supervisors on a cross‐border basis. The paper argues for strong financial services industry involvement in this.

The value of the paper is twofold – Its primary value is as the first academic analysis of the ECOFIN conclusions and as a predictor of their likely influence on EU institutional balance in the financial services area. Secondly it is a useful review of the main developments with regard to EU supervisory convergence over the five years 2001‐2006 – something which, to be the best of my knowledge, has not previously been carried out in the academic literature.

Under the Financial Services and Markets Act 2000, the Financial Services Authority (FSA) is the single regulator of firms in the UK financial services industry. The Act grants extensive powers to the FSA such that it can impose by rules and regulations additional corporate governance requirements on firms in the financial services industry. The legislative and regulatory requirements also extend to individuals under the FSA approved persons' regime. The purpose of the paper is to examine this individualization of corporate governance.

The paper first explores the rise to significance of internal control and risk management in corporate governance and regulation, and links this to Beck's risk society and individualization theses. The extent of the individualization of corporate governance by the approved persons' regime is explored by examining three sources of evidence: the FSA's documents setting out the approved persons' regime; the initial perceptions about the implementation of the approved persons' regime from interviews with high‐level individuals in the financial services industry; and the outcomes of illustrative FSA enforcement actions against individuals.

The findings are that the FSA has developed a comprehensive and formidable apparatus for the individualization of corporate governance in the UK's financial services industry. It is argued that a discourse based on the interpretive evaluations of internal control and risk management may be replacing a discourse based on the quantitative techniques of management accounting, which may be characterised as the demise of the “calculating self” and the rise of the “auditable self”.

The FSA's approved persons' regime could be developed as a model for other areas of the private and public sectors, where for regulatory purposes it may be desirable to identify approved or official roles.

The ability of regulators to “make” corporate governance by rules and regulations is relatively unexplored. Also, the focus of corporate governance is on firms rather than individuals. The paper considers the extension of corporate governance from the firm to the individual that may be achieved by regulation.

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. Financial services had been specifically excluded from the scope of the Distance Selling Directive which came into force in the UK on 31st October, 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 fundamental disagreement between member states as to whether the directive should be a maximum harmonisation measure or simply minimum harmonisation. With the current protracted state of negotiations, it remains unclear as to whether this proposal will ever achieve political agreement.

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).

The revision of the Investment Services Directive is one of the most significant proposals under the Financial Services Action Plan. Although not likely to be implemented until the end of 2006, it is hoped that many of the consequent changes to legislation and the FSA Rules will be in place before then, and it is, therefore, crucial to keep track of its progress through the Lamfalussy legislative process. This paper discusses the shape of the Commission’s final proposals, which were published in November, 2002, and how they will change the existing investment services regime in the UK.

To explain current guidelines for outsourcing as provided by the Joint Forum, the EU Markets in Financial Instruments Directive (MiFID), and the UK Financial Services Authority.

After discussing the international regulatory focus, describes FSA policy on outsourcing in detail, including senior management responsibility for management of risk and the need for internal and external due diligence. Provides guidance concerning supplier contracts, relationship management and monitoring, contingency planning, and exit planning.

The FSA's guidance on outsourcing highlights the need for senior management of the customer firm to take full responsibility for the increased risks that outsourcing can generate as part of their inherent accountability for efficient systems and controls.

A guide for ensuring that a firm's outsourcing arrangements are in compliance with FSA and MiFID guidelines.

This chapter aims the research whether the application of European Directive, Markets in Financial Instruments Directive (MiFID), had any significant effects on the European Capital Markets and the progress of the European Integration. This new regulation specifies the tasks and responsibilities of the supervisory authorities of the Member State of origin and the host Member State, in order to enhance the certainty of effectiveness of cross-border transactions supervision and to reduce the risk of imposing unnecessary legal reforms from the host Member State on investment firms which perform cross-border transactions. It has been concluded, among others, that the aligning of the national regulatory approaches to a common European regulatory system is quite necessary. It is finally concluded that MiFID will contribute to reduce problems at country level as the previous experience of the Investment Services Directive, where the European investments and economies of Member States were based mainly on the level of ‘country’ and not of the ‘sector’. An effective capital entrepreneurship market is a strategically important element in the development of new and innovative businesses, encouraging entrepreneurship, increasing the productivity and maintaining high economic growth rates in Europe. Currently, European venture capital market is much less effective than that of the US market, for example. Therefore, in this area, should be specified the priorities that will lead to new initiatives.

This article seeks to examine the strategic options open to transition economies in Central and Eastern Europe in the face of intense competition in two highly sensitive economic sectors within the EU.

This exploratory paper makes use of cross‐country case analysis.

The investigation demonstrated that protective mechanisms are used in veiled fashion to some degree even amongst the more economically advanced members of the EU and not just the transition economies as commonly perceived. It further argues that whilst a free and open EU will contribute to the quicker full realisation of its common market aspirations, transition economies are currently not adequately prepared for its required economic adjustments. Transition economies may need to respond in measured phases, taking into account its economic and political limitations. Otherwise, it might not be able to withstand the full onslaught of globalisation.

This research challenges the one size fits all notion of zealous free marketers and offers a middle ground strategic option for transition economies in the EU for further evaluation by policy makers and academics alike.

This research uses two highly economic sectors in the EU to argue for a more middle ground strategic economic strategy for transition economies in Central and Eastern Europe. This contrasts with the more global agenda of liberal economics.

Financial services in Europe have undergone dramatic changes in recent years. Much of this is due to developments in information and communication technologies, the arrival of European Monetary Union and the ageing population. These will continue to be important drivers of change as the industry continues to evolve. The future may see the emergence of a few major global players though national sensitivities and preferences may limit mergers. “Surprise‐free”, alternative and wild card scenarios are outlined and a range of issues which appear important for policy makers to consider is raised.