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26 February 2002

EP Committee adopted Prospectus Directive (1st reading)




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EMAC adopted the report on Prospectuses which was subject to a number of amendments and is supposed to enter into a second reading according to the rapporteur Chris Huhne. Investor protection is improved by the introduction of internationally accepted disclosure standards as laid down by IOSCO.

The Committee introduced an amendment to allow exemptions for small businesses companies with a market capitalisation of less than euro 350 million and wishing to raise funds only on the domestic market in the home state. This would make it possible for the UK to keep its simplified prospectus scheme for the AIM.

EMAC also decided to make the 'shelf registration' and updating information as proposed by the Commission optional rather than obligatory and allow the issuer the choice of competent regulatory authority, where appropriate. This is pf particular relevance to debt and equity securities where London and Luxembourg are specialized in.

Other amendments seek to introduce an element of flexibility on the language question to take account of market practice, extend the scope of the definition of a 'qualified investor' and bring debt securities within the scope of the directive. The committee also wants to exclude Eurobonds traded between professional investors from the directive.

Further amendments seek to bring the legislation in line with the Lamfalussy procedure approved by Parliament in Strasbourg earlier this month.

See full report.

© European Parliament


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