EcoSoC Opinion on Prospectuses

17 January 2002

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The Economic and Social Committee claims that the Commission failed to consult market practitioners fully prior to adopting the proposed Directive. In a number of places the Directive does not demonstrate adequate acknowledgement of existing satisfactory legal and market practices. Moreover, it differs in material ways from the FESCO paper on disclosure on which practitioners were consulted. The Committee also stresses the need for the reference to information about employees in Annex I of the Directive to include information about employee consultation procedures.

The aims of the Directive are not always consistent with the detailed text of the Draft Directive. The paragraphs subsequent to this discuss the following important topics:

prospectus requirements appropriate for institutional and private placements and for retail investors;

the right of the issuer to choose where to make issues, (the 'Home State' principle);

the implications for international debt markets in the EU, with particular effects on the Eurobond and multi-issuer Medium Term Note (MTN) markets;

annual updating of documentation for companies also if they make no further new issues;

the relationships between the proposed Directive and existing Directives;

the effects on foreign issuers and on competition between regulated markets;

other topics including the power of competent authorities to impose their requirements extra-territorially, jurisdictional responsibilities concerning advertising, and the relationship with the E-Commerce Directive.

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