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Banking guidelines to highlight impact of EU ecommerce laws
City watchdog and government get together to raise awareness of cross-border online trading issues

By Andy McCue

Published: Wednesday 06 August 2003

Creating a legal framework that will boost cross-border European ecommerce is a key part of banking and government guidelines issued this week aimed at creating a single EU financial services market by 2005.

The Financial Services Action Plan was formulated by the European Commission in 1999 and consists of a set of measures intended to fill gaps and remove remaining barriers to an integration of EU financial markets.

The new guidelines have been issued by City watchdog the Financial Services Authority, the Bank of England and the Treasury and are intended for financial institutions, companies and consumer groups in the UK that are not yet sufficiently familiar with the FSAP's potential impact.

While progress has been made in wholesale financial services, the guidelines highlight that many barriers still remain for the integration of retail services and particularly ecommerce.

One of the key objectives in addressing this is tackling the legal uncertainty surrounding the status and rights of those participating in cross-border ecommerce transactions within the EU and the document highlights the importance of the Ecommerce Directive, which was implemented in the UK last year.

It states that an open and secure retail market there is the need "to create the legal conditions for electronic commerce on a pan-European scale".

The DTI implemented the Ecommerce Regulations based on the directive last summer and they are designed to clarify what information e-tailers and other online businesses must supply to customers, including liability issues.

John Healey, Economic Secretary to the Treasury, said in a statement: "We have prepared this guide so that all those involved are aware of the impact of new measures and the competitive opportunities of further EU financial integration."

Separately a survey of almost 100 CIOs in UK financial services organisations found they are failing to address regulatory requirements.

While compliance came out as the issue most likely to pose a serious challenge to banking industry IT strategies over the next two years, only 2.5 per cent of key financial services IT projects during 2003 relate to regulatory compliance.

Caroline Birrell, managing editor of MIS UK Editorial & Research Projects which carried out the research, said in a statement: "Worryingly, though, the majority of respondents are not dealing with the problem now, and many do not even have clear risk-management plans in place for the future. With the deadline for Basel II compliance less than three years away, financial services CIOs can ill-afford to put their heads in the sand."