Regulation as a barrier to electronic commerce in Europe: the case of the European fund management industry

This paper presents results of exploratory research into the question of whether the distribution of investment funds via the Internet in Europe is being deterred by regulatory barriers. The paper examines the theoretical underpinnings behind financial services regulation and then asks if current regulation in place within the European Union and its Member States is consistent with this theory or indeed if regulation is acting as a barrier. Using both primary data and secondary sources, this exploratory study argues that European fund management firms face different regulatory obstacles, often the result of protectionism and the inconsistent application of financial regulations, in different EU countries. As a result, they are unable to reap the benefits that electronic commerce should bring in an industry that appears highly suited for it.