01 December 2004

FEE: Investors Need Clarity to Benefit from Pan-European Prospectuses

The FEE issued a discussion paper on the “Auditors’ Involvement with the New EU Prospectus Directive” providing national auditing standard setters with a framework within which standards might be developed in order to address the new requirements on auditors from the EU Prospectuses Directive. However, the desire to create an effective ‘single passport’ for issuers may not be fully realised, if the lack of clarity regarding the auditor’s report remains.

FEE warned that liability concerns may increase the cost of prospectuses. Protection of investors against misleading information is currently governed by national law differing among the member states.

FEE’s position is that the liability regime should not prevent issuers, auditors and others involved from supplying meaningful information to investors. Each of these parties should be appropriately responsible for the proper fulfilment of their respective roles but to no greater extent than is reasonable.

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