The European Parliament voted in second reading on the Council Common Position on Prospectuses, together with 21 compromise amendments which were also welcomed by Commissioner Bolkestein. The legislation forms a key aspect of the Financial Services Action Plan designed to bring about an integrated market in financial services by 2005 and is based on the concept of a single passport.
The main amendment concerns freedom of choice of regulator for the issuers of bonds worth more than 1,000 euro or a similar amount in dollars.
A further amendment takes up the question of the delegation of supervisory powers over the market, a question of particular importance for the smaller Member States. This provides for the Commission to review existing national arrangements after 5 years and only if the arrangements are not cleared by the Commission, will this arrangement have to come to an end after 8 years.
Further improvements in investor protection can be seen in amendments which strengthen legal obligations relating to the summary in translation, safeguards against providing misleading information and allows national regulators to introduce higher standards.
The other amendments relate to the technical operations of the market, different financial products and timetables with regard to compliance.
Rapporteur Chris Huhne welcomed the agreement emphasising that it will now allow any bond or share issuer to go to investors throughout the EU member states after getting the approval of just one regulator.
Calling the agreement on Prospectuses a good deal for companies and markets, the chair of EMAC Committee, Mrs. Randzio-Plath, called on the Council to go ahead and confirm its support for the amendments adopted by the European Parliament, as the Commission has already done, so that the text can be finally adopted before the summer break.
Recommendation second reading
Press release EMAC Committee
Press release Huhne of 26 June
Commission press release
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