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CESR’s use of the FAQ and Answers format became ineffective at addressing divergences, FESE states in its comment to the Commission. In some cases the FAQ simply disclosed the different approaches taken by jurisdictions without concluding with a common approach, FESE says and calls CESR to eliminate all instances of supervisory divergences that undermine the use of the passport and the ability of issuers to raise capital efficiently across the EU.
Also, FESE notes that compliance costs have not declined, essentially because of the continuing high costs of liability and litigation.
Any simplification on the definition of qualified investors should take into account the purpose for which the classification is to be used and whether the investors’ interests will be well protected, FESE underlines. “We are not entirely convinced that the definition of a qualified investor for the purpose of the PD can be based on the same parameters as the definition of a professional investor under MiFID”, FESE states. “It is unclear as to how the proposed amendment will truly reduce the costs/complications of the current definition of a qualified investor, now may be the right time to explore whether the definition could be harmonised and the national discretions eliminated”.
FESE finally also notes that further thought needs to be given to whether the alignment of PD and MiFID should include professional investors as opposed to eligible counterparties only.
The full response is attached below.