-According to the rapporteur Christopher Huhne one recurring criticism of the proposal is that it is has been drawn up primarily with equities in mind, and does not sufficiently take account of the specificities of bonds, in particular Eurobonds, mortgage bonds (or Pfandbriefe) and Medium Term Notes. The proposal also excluded government debt securities from the need to make disclosures, which seems oddly out of line with the EU member states’ commitments to transparency. Moreover, it fails to recognise that the Euromarkets are becoming a significant source of capital for third country governments, which may be even less inclined to put the interests of European investors ahead of their own taxpayers.
While the aim of having one regulatory authority to vet prospectuses is in principle a good one, the definition of the home member state authority leaves something to be desired. It would be better for EU issuers to be able to choose, as is the case today, to have their prospectus vetted by the authorities of the country where they are making the public offer or are admitted to trading, rather than where they have their registered office.
Another concern is the definition of a 'qualified investor' proposed by the Commission. In particular, large corporations are excluded from this definition, as are hedge funds and national central banks. A common approach to the definition of a qualified or professional investor, which also arises in other key EU legislation, notably the Investment Services Directive (ISD) should be taken. A related issue is the exemption from prospectus requirements for qualified investors. The potential impact of the prospectus proposal on second tier markets, such as AIM and the Neuer Markt must also be considered and the major innovations of the proposal, a mandatory annual 'shelf registration' system, is also a cause for concern.
expected deadline of amendments: 30 January
expected vote in Committee: 26 February
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