Negotiations in Chapter 9 – Financial Services were officially opened on at the sixth Intergovernmental Conference on Accession of Montenegro to the European Union, held in Luxembourg on 22 June 2015.
Financial services are of great importance for the proper functioning of the European Union’s internal market as one of the cornerstones of European integration. This chapter refers to the compliance of regulations in the area of financial services – banking, insurance and reinsurance, pension funds and capital markets, as well as the financial market infrastructure with the EU acquis, as well as its effective implementation and enforcement by the competent supervisory institutions.
Great incentive for the prosperity of our country lies in the possibility of direct participation in the preparation of the regulations governing the EU’s single financial market, as well as their full implementation through active participation in the functioning of the European institutional mechanism for the preservation of financial stability after the accession of the Montenegrin supervisory institution. Membership in the Union will have a positive impact on increasing competition in the market, which will lead to a more diversified and innovative offer of products and services, and thus more favorable effects for all participants.
BANKING, INSURANCE, INVESTMENT FUNDS IN THE EU
This negotiating chapter includes regulations in the fields of banking, insurance, infrastructure, financial markets, securities markets and investment services. The legal framework covered by this chapter includes the rules for issuance of operating, operating and supervising operations of financial institutions and regulated markets. Financial institutions covered by the acquis may operate throughout the European Union in accordance with the principle of a “single European passport”, enabling a financial institution to operate in any Member State of the Union without seeking a special permit from the host country, and with the principle of “home country control” “(The principle of control by the state in which the financial institution has its seat, which is achieved through the establishment of branches in other countries or the provision of cross-border financial services). In order to protect the rights of investors, at the EU level, it is determined that the investor must be provided with clear and comprehensive information needed to make an investment decision.
BANKING
For the area of banks and financial conglomerates in the EU acquis, the requirements for issuance of work, operating and prudential control of credit institutions’ operations, as well as requirements relating to the calculation of capital adequacy, are applied to credit institutions and investment firms. The legal framework in this sector prescribes the rules relating to the additional supervision of financial conglomerates. The legal framework sets out the rules relating to annual and consolidated reports of banks and other financial institutions. This also aligns certain provisions concerning the reorganization and liquidation of credit institutions with branches in several Member States. Special attention of the regulator is focused on the introduction of a unique deposit insurance scheme with mandatory participation of all banks in the system in its functioning.
INSURANCE AND PENSION FUNDS
In the area of insurance and pension funds, the rules governing the issuance of operating, operating and supervision of life and non-life insurance companies and the reorganization and liquidation of insurance companies with branches in several Member States are envisaged. There are special regulations in the non-life insurance sector for co-insurance, travel insurance, loan insurance and legal expenses insurance. The acquis establishes the rules for additional supervision of the group of insurers, and includes the regulatory framework for reinsurance in the EU in order to eliminate obstacles to the performance of reinsurance activities, such as the obligation for reinsurance companies to provide assets in stock. The rules for annual and consolidated reports of insurance companies are prescribed.
INFRASTRUCTURE OF FINANCIAL MARKETS
The rules in this section aim to reduce and harmonize formal requirements and procedures for the establishment and implementation of collateral throughout the EU, as well as reducing the systemic risk associated with insolvency of participants in payment systems and in securities settlement systems.
SECURITIES MARKET AND INVESTMENT SERVICES
The regulatory framework of the capital market includes rules relating to investment services and the securities market, the establishment, operation and supervision of operations of investment funds and regulated markets, compensation scheme for investors, publication of prospectuses, prohibition of market abuse, etc. The prospectus rules aim to strengthen the protection of investors regardless of where they are issued to the EU, as they must provide clear and complete information needed to make investment decisions.
FINANCIAL SERVICES
Objective of European policy in the field of financial services is to ensure a high level of stability, security and efficiency of the financial system. EU membership will have a positive effect on financial market participants as well as for citizens, entrepreneurs, investors or users of financial services. Innovation and supply of new types of services, as well as increased competition, will benefit entrepreneurs and citizens, especially when it comes to offering banks, but also offering products and services of non-banking financial institutions. In this regard, special attention is paid to ensuring the protection of users of services and their information on services provided by financial institutions, starting from the conclusion of a loan agreement, insurance or investment in capital markets. A greater degree of protection for financial services users is provided by a unique guaranteed deposit scheme, which strengthens public confidence in the banking system and promotes the stability of the financial system as a whole. Providing a better organized pension system by introducing a pension scheme under the auspices of the employer, it will provide an opportunity for employees to have additional benefits in terms of pension incomes.