1) Data Protection

Impact: This new Directive means that firms need permission from a data subject to process personal data. Little or no change is expected to domestic UK private sector systems (already subject to Data Protection Legislation} but the Directive also governs the transfer of data to non EU countries without equivalent legislation ( e.g. USA).

Status: UK legislation imminent for implement in October 1998. The EURIM Data Protection WP will seek clarity and practicality regarding the contractual conditions acceptable for systems where data may be processed in "third " countries [e.g. FM operations and others with transatlantic processing centres, Internet based systems, Far Eastern data entry operations etc.].

2) Financial Services Regulation

Impact: The Bank of England's regulatory arm, the SFA, IMRO, PIA, and other UK financial regulatory organisations are being merged into the new Financial Services Authority. Proposed legislation will give the new FSA "the full range of powers and discipline, established in statute, which are currently available to the SROs under contract law." Any change in regulatory reporting requirements (e.g., resulting from harmonisation across different businesses) could have a significant impact on Financial Services systems.

Status: Banking supervision already transferred from the Bank of England to SIB. A new Financial Services Act to be published in draft form in Spring 1998, to be brought before Parliament by November 1998 and passed into law in 1999.

3) Second Capital Adequacy Directive (CAD II)

Impact: This Directive will amend EU capital adequacy rules, with potentially significant implications for risk management systems and models. The principal thrust of the Directive is to allow value-at-risk models.

Status: Concern over a possible adverse impact on commodities firms has led to blockage of the proposal by the UK while a compromise is sought.

4) Derivatives Report and Commission rules on disclosure and accounting

Impact: DG XV is examining ways to regulate the accounting of derivatives by amending the Bank Accounts Directive. This could have implications for accounting, settlement, and reporting systems.

Status: A Draft Recommendation is circulating, but the proposal appears stalled.

5) Tax: Accounting Rules Harmonisation

Impact: The Commission has proposed drawing up a single set of accounting rules as a first step towards setting international standards with the US.

Status: This proposal appears to be on a slow track. No reported developments.

6) Pensions Review

Impact: The planned overhaul of UK pension arrangements will probably require changes to public and private sector pension and payroll systems as well as to the systems of Insurance Companies and others providing pension schemes.

Status: Review announced by HMG but details and timescale not committed.

7) National Health Service Administration and Accounting

Impact: Proposed changes to organisation of NHS could require changes to Health Service Systems [Hospitals, Trusts, GPs etc.] .

Status: "Ten Year Strategy" announced but details and timescale not committed.

8) Electronic Commerce/New Means of Payment

Impact: National governments, including the US, UK, and Germany, have prepared legislation on digital signatures and on those providing authenticity or certification functions [trusted third parties]. The EU wishes to harmonise the European approaches to this issue, and may also address electronic payment, encryption and other aspects of electronic commerce. There are also proposals to address the taxation issues raised by the growth of cross-border electronic commerce.

Status: The Commission was due to bring forward further proposals by the end 1997. Moves to create international standards by various bodies such as the OECD. Concern that some EU Member States may promulgate regulations before EU standards are agreed. Emerging international de facto standards may change the picture.

1) Custody Issues

Impact: Proposal to regulate custodians may require retitling of accounts and registration of staff with effects on Financial and Legal systems.

Status: The Global Custody Industry Forum making representations. Implementation by UK self regulatory organisations believed imminent.

2) Electricity Pricing

Impact: Past regulatory decisions mandate changes to electricity pricing structures in Spring 1998.

Status: Believed permission given for timescales to slip on most systems not already capable of handling the required changes.

3) Railway PricingImpact: Past regulatory decisions mandate improvements to railway through-ticketing

arrangements.

Status: Not known.

4) Procurement Directives

Impact: These mandate the use of traditional open tender routines for procurement by the public sector and regulated utilities over a fairly small amount. It is said to be unlikely that those covered by the routines who do not already have permissable "framework" or other service contracts in place can contract new EMU or Y2K tasks in under about 18 months [i.e. to late for tasks which must be completed and tested by the end of 1999] without breach of the rules.

Status: No plans currently known to provide guidance to resolve the current confusion over framework contracts and/or enable fast track procurement routines to address Y2K/EMU systems needs.

5) Pricing Display Directive

Impact: Requires multiple price displays at point of sale

Status: Understood that a Working Party in DG2 is looking at the consequences of implementation during the EMU parallel running period.