Brussels, 20/09/2002 (Agence Europe) - The Council has adopted by written procedure its common positions on "conglomerates" on the basis of a political agreement concluded last May (see EUROPE 8 May). The Council accepted the majority of amendments adopted by the Parliament during the first reading and the EP is not expected to modify the text substantially during its second reading in November.
The new directive will reinforce cautious monitoring of conglomerates active in several financial sectors, such as banking and insurance. It ahs set out the rules and solvability thresholds for conglomerates by banning the double use of one's own funds to cover the risks involved in different entities of the same conglomerate. In a common agreement, the Council and the EP fixed the threshold at 40% of financial activity after which the group is considered as a financial conglomerate. They also set up a device for the authorities to co-ordinate and inspect, which should avoid any overlapping of competencies. At the request of the EP, a "sunset clause" foresees the revision of the provisions after four years, which will allow for the adoption of technical rules resulting from the directive in accordance with the "Lamfalussy procedure".