A central aim restated in each Directive is to reduce the barriers to freedom of establishment of businesses in the European Union through a process of harmonising the basic laws.
[5] This has been argued to risk a "race to the bottom" in standards, although the Court of Justice soon affirmed in Inspire Art that companies must still comply with proportionate requirements that are in the "public interest".
[7] This has become increasingly important as most company shares are held by institutional investors (primarily asset managers or banks, depending on the member state) who are holding "other people's money".
Unlike Switzerland after a 2013 people's initiative, or the U.S. Dodd-Frank Act 2010 in relation to brokers,[8] the EU has not yet prevented intermediaries casting votes without express instructions of beneficiaries.
[12] Additional rules on remuneration practices, separating depositary bodies in firms from management and investment companies, and more penalties for violations were inserted in 2014.
It requires similar authorisation procedures to have a "passport" to sell in any EU country, and transparency of financial contracts through duties to disclose material information about products being sold, including disclosure of potential conflicts of interest with clients.
[18] The regulation determines the jurisdiction and applicable law based on the debtor's center of main interests (COMI) and ensures automatic recognition of insolvency proceedings across member states.
It promotes cooperation among administrators, courts, and creditors from different jurisdictions to streamline processes and protect the interests of all parties involved.