Rules forcing investors to buy and sell shares through stock exchanges only would be scrapped across the European Union under a proposal to shake up the EU's financial markets, the Financial Timesreported today.
The European Commission hopes to let investors trade shares directly with other shareholders and banks, bypassing national stock exchanges, the London-based business daily said.
Opponents of the proposals warned they could lead to a fragmentation of the market and make it difficult for investors to find the best price for their shares.
"It's the end of the market as we know it," Mr Patrick Starkman of the European Savings Banks Group, which represents 1,200 banks, told the paper.
"Stock exchanges will no longer be the only place where you buy or sell securities. Investors will find it difficult to have a reference price."
According to the Financial Times, an advance draft of the new rules says many of the national regulations currently hampering cross-border trading are to be ended.
The paper said the document was to be officially unveiled by the European Commission in November, and quoted it as saying: "National options ... are fundamentally at odds with the objective of a single financial market."
The commission's proposals have to be approved by EU governments and the European Parliament, and could be implemented as early as 2004. The new rules would regulate investment banks and stock exchanges with a lighter touch, letting them operate across the EU once they have been approved by their national authority.