-The invited experts from the financial services industry gave a broad welcome to the Commission's revised proposal for the Prospectuses Directive. But it became clear at the hearing that there are still a number of outstanding issues to be resolved, in particular relating to the cost of complying with the new regulatory regime, exemptions for SMEs, freedom to choose the country of regulation and updating of information on provisions.
On the question of costs, one expert Clifford Dammers from the International Primary Market Association put this as up to three times the existing provisions and as much as ten times if the new rules relating to international accounting standards were taken into consideration. This could deter third country investors from coming to Europe, he argued. MEPs from the committee, however, sought clarification for a breakdown of these costs.
On the question of the country of regulation, where the Commission is proposing that new issues should be regulated by the authority of the home country, whereas Parliament would prefer to allow issuers freedom of choice, several experts such as Erwan Barre and Natalia Butrageno shared Parliament's view, accepting that there was a case for regulating equity issues by the home country.
There was a general feeling from the experts that increased investor protection could not necessarily be guaranteed by the extensive provision of more detailed information as could be seen in the situation facing Italian investors with losses on Argentinean bonds. As Mr Dammers put it, the question now facing Parliament was to strike a balance between any extra costs involved and investor protection.
As to the country of regulation, Mr Dammers' view was that progress with regard to freedom of choice was being held up by national regulators in Council. In the interest of an efficient integrated market 'the Commission and Parliament should not allow this to happen', he said.
Position papers of experts
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