Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-01-15-Speech-4-032"
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".
Madam President, with regard to these two subjects, I will speak first on the Kauppi Report and then on the Purvis Report.
In the cases of both hedge funds and derivatives, Mr Purvis' final report is helpful guidance for the European Commission. The Commission committed itself in Oviedo in April 2002 to examine specifically the issues of derivatives and hedge funds after the Enron scandal. This commitment will be respected and Mr Purvis' report will be taken duly into account.
The European Commission will also have to take into consideration the conclusions to be drawn by the professional experts groups that we set up in late October 2003 to consider post-FSAP priorities – priorities after completion of the Financial Services Action Plan. Those experts groups may raise these two issues, among others, upon the first report scheduled for April 2004.
It is too early for the European Commission to take a final position on possible further legislative action regarding either hedge funds or derivatives.
We shall have to analyse whether the Parmalat affair resonates on these two subjects and we shall have to be attentive to the on-going debates in the United States on registration of hedge funds to ensure that there are no distortions to competition.
On the Kauppi Report on mutual assistance, the Commission made this proposal in response to the report of the Council's Ad Hoc Group on Tax Fraud. The group had indicated that the base directive, which dates from 1977, was in need of modernisation in view of the increased tendency for businesses to be organised in several Member States and for individuals to exercise their Treaty rights of free movement. Nevertheless, any tax liabilities that arise as a consequence of those rights should be capable of enforcement by the tax authorities of the Member States concerned. Practices of tax evasion and tax avoidance across frontiers violate the principle of fair taxation, are likely to result in distortions in capital movements, adversely affect conditions of competition and affect the proper functioning of the internal market.
This proposal adds to the existing tools available to tax administrations. It accelerates the procedures involved in obtaining information from other states' tax administrations. It makes it possible to carry out simultaneous tax checks in a number of countries where a multinational business operates, and it allows decisions and instruments to be notified outside the country where the tax is owed, so that enforcement proceedings may be pursued. As a measure designed to combat tax fraud and tax avoidance, I am certain that Parliament will want to support it.
Those are my initial comments on the Kauppi Report. With regard to the Purvis Report, I should like to say the following.
The Commission welcomes the decision of the European Parliament to draw up a report on the future of hedge funds and derivatives. I should like to congratulate the rapporteur on his initiative, which is very timely. These subjects, as we all know, are extremely important.
Let me first address the issue of hedge funds. As mentioned in Mr Purvis' report, various hedge fund products are already accessible to retail investors, either directly through stock exchange listings or indirectly through structured notes. Several Member States have already introduced a regulatory regime for hedge funds to encourage such undertakings to set themselves up under their jurisdiction. However, as Mr Purvis correctly mentions in his report, there is currently no European regulatory regime that is tailored to the particularities of hedge funds.
There are at least two key questions: first, how to attract on-shore investments that are mostly off-shore nowadays. Parmalat
has shown the importance of that. Secondly, what level of protection do investors need for this specific type of financial product? On this basis, it would seem appropriate to discuss the potential benefits of an EU-wide regulatory regime for hedge funds.
As regards the second issue, derivatives, I agree that this is another crucial issue for at least three reasons.
First, this category of financial instruments is developing at an increasing rate with endless imagination in the form of new products. Secondly, most of them are traded on over-the-counter markets which, by their very nature, are less-well monitored than regulated markets by regulators and supervisors. Thirdly, the risks attached to such instruments are potentially large because of their leverage effects. However, in contrast to hedge funds, which are not covered by European legislation at the moment, derivatives are already dealt with in a number of texts in different contexts such as, for example, accounting, ICITS, market abuse, investment services or banking legislation. It would seem neither necessary nor desirable to build a specific piece of legislation for derivatives as it is a horizontal issue. The best way would be to consider updating the current different pieces of European legislation on a case-by-case basis. However, full tax consistency must be assured."@en1
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