Implementing the E-Commerce Directive in Financial Services

The Directive should have been implemented into UK law before 17th January 2002 but it is now expected in Summer 2002. The Directive, and the draft Regulations released on Thursday by the DTI, set out various new rules for doing business on-line. Among these are requirements for information to be given on a web site, information that a consumer must have about the steps to take to conclude a contract on-line, information to provide in on-line advertising, limits on the potential liability of ISPs for unlawful material which they carry unwittingly, and the national law that will apply to on-line services.

The Treasury’s consultation document proposes draft rules that will amend the Financial Services and Markets Act (FSMA) of 2000 and certain laws passed under that Act. It is the second consultation conducted by the Treasury on the subject of the E-commerce Directive.

The Treasury has proposed three Statutory Instruments. Among these is one with the less-than-catchy title of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (Electronic Commerce Directive) Order 2002. This Order would exclude most information society services from the scope of regulations made previously under the FSMA, although the exclusion does not extend to insurance.

This Order should not be confused with the proposed Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (Electronic Commerce Directive) Order 2002. This Order will amend exemptions to existing financial promotion restrictions to make them consistent and compliant with the E-commerce Directive.

Finally, the proposed Electronic Commerce (Financial Services and Markets) Regulations 2002 will modify certain powers of the Financial Services Authority to give effect to the E-commerce Directive.

Comments on the proposals can be made to the Treasury before 2nd May 2002 at: [email protected]