Following the discussion on the level of convergence of prudential regulatory standards, this chapter turns on the legal convergence of non-prudential national laws and regulations relating to electronic banking activities. The discussion begins with laws of general application to online financial services such as the E-Commerce and Distance Marketing Directives and subsequently turns to rules governing specific types of electronic banking activities such as rules relating to consumer credit, electronic funds transfers and online securities activities.

E-commerce and distance marketing of financial services

The provision of banking and financial services via the Internet is subject to national laws implementing the E-Commerce and Distance Marketing Directives. By establishing consumer protection requirements and facilitating the formation of financial contracts electronically, the two Directives are the basic components of the institutional framework for online financial services in the single European market.

The E-Commerce Directive

The aim of the Directive is to approximate the laws of the Member States to the extent necessary for ensuring the free movement of ‘information society services’ in the European internal market. It applies only to ‘information society services’ which are defined as any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing and storage of data, and at the individual request of a recipient of service. It suffices to note here that the Directive applies to a wide range of services provided via the Internet, including services which are not remunerated by those who receive them, such as the availability of online information, commercial communications, access to and retrieval of data.