Financial services


The objective of the rules in the EEA Agreement on financial services is to develop a single European financial market in which service providers can freely offer their services in the different countries within the EEA.

Financial markets are crucial to the functioning of modern economies. The more integrated they are, the more efficient the allocation of capital and long-term economic performance will be.

Completing the single market in financial services is a crucial part of the EEA's objective of achieving more and better jobs in a more dynamic, innovative and attractive Europe.

The financial services sector covers three major areas in respect of which similar policies apply:

  • Insurance
  • Banking
  • Stock exchanges and securities

Other areas covered include the distance marketing of consumer financial services and the supplementary supervision of financial conglomerates through the Financial Conglomerate Directive.


Rules in the insurance sector can be divided into five categories:

  • non-life insurance
  • life assurance
  • motor insurance
  • supervision and accounts
  • other

Measures relating to non-life insurance and life assurance seek to abolish restrictions on the freedom of establishment and freedom to provide insurance services in the EEA by harmonising the rules in place in EEA States. For example, they harmonise the technical instruments for prudential supervision so that insurance companies can be granted a single licence that is valid throughout the EEA.

Measures relating to motor insurance cover civil liability in respect of use of motor vehicles, with the aim of harmonising national legislation in order to ensure adequate and timely compensation for victims of traffic accidents.

As regards supervision and accounts, the Insurance Groups Directive provides for additional supervision of insurance undertakings belonging to insurance groups; other rules deal with accounting practices and reporting.

Other acts in the field of insurance include the Insurance Mediation Directive and the Directive on reorganisation and winding-up of insurance undertakings.


Rules in the banking sector can be divided into four categories:

  • co-ordination of legislation on establishment and freedom to provide services
  • deposit-guarantee schemes
  • accounting
  • anti-money laundering

Credit institutions are regulated by the Capital Requirements Directive, which introduces rules to abolish restrictions on freedom of establishment and freedom to provide services by credit institutions in the EEA. The Directive harmonises technical instruments for prudential supervision so that credit institutions can be granted a single licence valid throughout the EEA. Credit institutions are supervised by the authorities in their home EEA State. The Directive also contains rules on the capital requirements of credit institutions.

Other relevant coordinating measures in the EEA include the Directive on reorganisation and winding-up of credit institutions, the E-money Directive and the Payment Services Directive.

As regards deposit-guarantee schemes, the rules in force provide protection for deposits up to a minimum sum of EUR 20,000.

Several measures have been adopted in relation to the accounting rules and obligations of banks and other financial institutions in the EEA.

Rules on anti-money laundering introduce measures designed to prevent the use of the financial system for the purpose of money laundering and the financing of terrorists.

Stock exchanges and securities

The EEA rules relating to stock exchanges and securities aim at developing a single securities market for new issues and securities trading in the EEA.

The Markets in Financial Instruments Directive (or “MiFID”) establishes a harmonized framework of rules concerning the setting-up, authorisation and operation of securities exchanges and investment firms. The two main objectives of the MiFID are:

  • to protect investors and safeguard market integrity, and
  • to promote fair, transparent, efficient and integrated financial markets.

The Prospectuses Directive establishes requirements for the issuing of securities.

The Admission and Listing Directive lays down minimum requirements for the information that must be disclosed to the public when securities are listed on a securities exchange. It also seeks to facilitate cross-border listing of securities.

The Transparency Directive also concerns the need to provide investors with correct and relevant information on securities and their issuers. It requires that any changes to information originally provided at listing be disclosed to the public, and original information documents be periodically updated and made available to investors.

The Market Abuse Directive aims to ensure that investors operate on a level playing field when investing in securities. The Directive covers insider trading and market manipulation.

The Investor Compensation Schemes Directive is aimed at providing minimum guarantees throughout the EEA for the protection of investors in cases where investment firms fail to comply with their obligations.

The Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) facilitates the marketing of units of investment funds across the EEA and co-ordinates the applicable conditions.

The Alternative Investment Fund Managers Directive (AIFMD) establishes a legal framework for the authorisation, supervision and oversight of managers of a range of alternative investment funds (AIFM), including hedge funds and private equity.

Decision-making powers in the financial services area

 In the area of financial services, the EFTA Surveillance Authority has been allocated with certain decision-making powers towards national supervisory authorities and market operators (including credit institutions, insurance companies and investment firms) established in the EEA-EFTA States. The powers to adopt binding decisions correspond to powers with the European Supervisory Authorities, EBA,  EIOPA and ESMA in the EU. Following the financial crisis of 2008, the European Supervisory Authorities were created in the areas of banking, insurance and securities markets to ensure consistent coordination and supervision of the financial sector.

ESA's decision-making powers include the possibility to issue binding decisions to national authorities and market operators if the national authorities do not apply EEA law correctly, or in case of conflict between national supervisory authorities that has not been solved through voluntary mediation.

ESA is also the designated supervisory authority for credit rating agencies established in an EEA-EFTA States. Credit rating agencies need to be registered with ESA. The Authority will adopt binding decisions towards credit rating agencies established in the EEA-EFTA States, including the decisions related to registration, calculation and collection of fees and decisions to order investigations and on-site inspections as well as decisions to impose sanctions in case of non-compliance with applicable EEA law. For further information about the conditions the credit rating agency needs to fulfil, please refer to the ESMA webpage on credit ratingagencies.

To ensure integration of the European Supervisory Authorities' expertise in the process, any binding decision by ESA addressed to one or more individual EEA EFTA competent authorities or market operators will be adopted on the basis of drafts prepared by the relevant European Supervisory Authority, either on the initiative of ESA or on the initiative of the relevant European Supervisory Authority. In relation to supervision of credit rating agencies, ESMA will maintain the day-to-day contact with the registered company.

The European Supervisory Authorities are competent to perform actions of a non-binding nature (such as guidelines and recommendations) also vis-à-vis competent authorities and market operators in the EEA EFTA States. 

Relevant links:

Other EEA Institutions

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