The Prospectuses Directive, one of the crucial directives that needs to be passed in order for the E...
The Prospectuses Directive, one of the crucial directives that needs to be passed in order for the EU to meet a 2003 deadline for harmonising rules on financial services has run into trouble after a raft of amendments were proposed by European Parliamentarians.
This has forced the European Commission to take back the draft document and put it forward for review by members of the EU Parliament's Economic and Monetary Affairs Committee.
The directive has already caused concern among smaller UK firms worried about listing costs, and now the Association of Private Client Investment Managers and Stockbrokers has expressed concern with the fundamental direction in which the directive is heading.
For example, the new amendments talk about rules being different depending on the value of shares in companies, but APCIMS head of information Brian Mairs says that this is in conflict with the idea of harmonising rules governing listings irrespective of the size of a company or the value of its shares .
Another issue is the overlap between the Prospectuses Directive and the Investment Services Directive.
Because the latter will be more important for financial services providers and will to a large extent determine the scope for applying the rules of the former, it makes no sense to put in place rules on prospectuses first, Mairs says.
"We can't have a prospectuses directive contradicting the ISD," he says.
Then there is the issue of whether companies should be forced to list on an exchange in the same territory in which they are registered.
APCIMS believes that this issue needs to be resolved because promoting market harmonisation will not be complete unless companies can choose to register their business in one country and list their shares in another territory without hindrance or penalty.
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Short-term noise or something sinister?