The insurance industry has given a cautious welcome to a new European directive designed to free-up share trading.

The Markets in Financial Services Directive (MiFID) aims to create a single market that would allow private and institutional investors to buy shares in foreign companies without going through the local stock exchange.

The directive is intended to streamline the process and make the buying and selling of shares across the EU easier.

The insurance industry, which is a massive institutional investor, has given the new measure a cautious welcome.

"We are supportive of MiFID's key objectives and the creation of a single European market for investment and trading of securities," said Peter Montagnon, head of investments at the Association of British Insurers (ABI).

"It is imperative that the implementation is proportionate and does not end up being too expensive.

"We have sought proportional implementation in those areas where we would like to see the level playing field preserved between insurance and other savings products and between investment managers and investment banks," he added.

The directive will not apply directly to insurance products but it will cover packaged product including life policies.

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