Principles of European Law on Financial Service Contracts?

Abstract

Financial services have become increasingly important in the EU. Such services are essential not only for the everyday life of EU citizens, but also for the EU economy at large. This fact explains the large number of EC specific regulatory measures taken in the area of financial services which directly or indirectly affect financial service contracts. In 2003, however, the Commission initiated an action of a more general character which may have important implications for the regulation of financial services in the EU: the drafting of a so-called 'Common Frame of Reference' (CFR). An academic draft CFR (DCFR) has recently been published. It includes inter alia a slightly modified version of the Principles of European Law on Service Contracts (PEL SC). The PEL SC contain general provisions applicable to all types of services and specific rules for six categories of services. Financial services, however, are explicitly excluded from the scope of application of the PEL SC. This contribution explores whether and to what extent a module on Principles of European Law on Financial Service Contracts (PEL FSC) can be embedded in the PEL SC and hence in the DCFR. The authors conclude that such a module would fit in the current system. In their view, the inclusion of the PEL FSC in the DCFR would make an important contribution to the creation of a coherent structure of rules on service contracts in general, and financial-service contracts in particular. The authors wish to thank Martine Boonk and Martin Siller for translating the abstract into French and German.

Keywords: service contracts, financial services, PELSC, CFR, MiFID