Frits set to listen, claim markets

Date: 27/09/01

By Peter Chapman

Financial services chief Frits Bolkestein has hinted to European stock markets that the European Commission may have blundered with recent proposals on prospectuses - and has asked the industry to table changes it wants made to the plan.

The claim by executives from the London Stock Exchange (LSE) follows weeks of acrimony between Brussels and the markets over the draft rules designed to set common standards for the publication of sales prospectuses for stocks and bonds.

Markets said the original 'one-size-fits-all' proposals would have hurt small companies listing on special exchanges such as London's Alternative Investments Market (AIM) and France's Nouveau Marché. Critics also said the directive would place extra burdens on bond issues and the trade in American-listed firms in the EU.

But Tim Ward, head of issuer services at the LSE, said the Commission's willingness to face the flak was signalled in a meeting with Bolkestein's officials on the fringes of last week's hearings on separate proposals governing investment services.

"A number of organisations, including ourselves, held separate meetings with Commission officials to discuss the PD [prospectuses directive] in more detail," he said. "We have been asked by the Commission to submit proposed amendments to the directive and have already submitted a response to [the UK] HM Treasury."

He said the LSE would consult members of the Federation of European Securities Exchanges when drafting its submission to the Commission this week.

"We wish to be constructive and submit amendments that satisfy all European exchanges, while ensuring that our interests and the interests of our customers are protected," he added.

Bolkestein's spokesman, Jonathan Todd, denied the Commission was set to completely revise its proposal. But he said the door was always open to amendments. "We are continuing our contacts with a very wide range of interests on this proposal and are open to constructive contributions from interested parties," he said.

Under EU rules, the Commission cannot simply re-submit a proposal if it believes it has made a mistake. But experts say there are ways it can ensure its revised views are taken into account. This can be by liasing with key MEPs and government officials ahead of votes in the European Parliament and Council of Ministers.

Once it is adopted, the directive can also be fine-tuned by two new committees of national market experts and regulators, set up as part of Baron Lamfalussy's report on new securities market legislation.

Financial services chief Frits Bolkestein has hinted to European stock markets that the European Commission may have blundered with recent proposals on prospectuses - and has asked the industry to table changes it wants made to the plan.