European Union rules on stock and bond offerings across the 27-nation bloc have helped to create a single securities market but amendments would cut costs further for users, the EU’s executive body said on Friday.
“The prospectus regime appears to have made it easier to offer securities and admit them to trading either in one country or in several countries at the same time,” the European Commission said in a statement. The cost of compliance fell once users became familiar with the new rules but the Commission said it wanted to simplify the law to cut expenses further.
The 2003 prospectus directive oversees the often copious information that must be given to a range of investors when a new share or bond offering is made so they are not misled. EU Internal Market Commissioner Charlie McCreevy is seeking views on the following changes he wants to make:
-- No prospectus is needed for professional investors such as mutual funds, and McCreevy wants to extend the scope of professional investors to include investors who take part in private placements;
-- To extend the list of exemptions from issuing a prospectus to include share schemes for EU employees of companies listed on non-EU exchanges or non-listed companies;
-- To scrap a requirement that issuers provide a document each year with all the information published in the 12 months preceding the prospectus. This is seen as duplicating a similar requirement under separate EU transparency rules;
-- When new information is released after a prospectus is published, investors across the EU would have at least two days to withdraw any offer they have made;
-- Review how summaries of prospectuses are compiled;
-- The €2.5 million ($3.4 million) threshold that triggers the need for a company to issue a prospectus should be raised or the amount of information a small company has to publish should be cut;
-- Where the state is a guarantor of the issuance of debt, a company that wants to make a cross-border offering should not have to make available additional details about the state’s finances;
-- A rights issue could be exempted from the need to publish a prospectus as long as a document was available with details and reasons for the offer. (Reuters)