Bolkestein rejects German prospectus bid

Date: 06/06/02

FINANCIAL services chief Frits Bolkestein has dismissed what he calls a 'late-in-the-day' German proposal to set up an EU agency to vet prospectuses for pan-European stock and bond sales.

German finance chief Hans Eichel tabled the agency plan in a bid to break the deadlock on controversial European Commission measures to make it easier for companies to raise capital across the Union, with the publication of a universally approved prospectus.

Under the proposed law, the country in which a company is based would be responsible for vetting prospectuses, which would then be valid across the Union. But there have been clashes over how high to raise the regulatory bar and the number of languages into which the prospectuses should be translated.

Eichel wrote to ministers, the Commission and MEPs saying there was 'little alternative to the establishment of a central agency' to ensure there are 'fully harmonised rules that are applied in a fully consistent manner from the start'.

He said member states should also have the right for a full translation of prospectuses aimed at retail investors. But Bolkestein, whose department wrote the draft law, said the plan tabled at this week's meeting of EU finance ministers 'comes a bit late in the day'.

Speaking to MEPs in the assembly's economic and monetary committee, he warned: 'It is only those who have no ideas that never change them - but you want to be careful with agencies.'

Bolkestein said the Commission would table a new version of the directive during the Danish EU presidency, which begins next month. He said it would respond to calls for flexibility on a costly requirement for all firms known as 'shelf registration', in which updated prospectuses must be provided to regulators every year.

Financial services Commissioner Frits Bolkestein has dismissed a German proposal to set up an EU agency to vet prospectuses for pan-European stock and bond sales.