ICMA response on CESR call on the Supervisory Functioning of Prospectus

29 January 2007

ICMA responded to the CESR`s Call for Evidence on the Supervisory Functioning of the Prospectus Directive and Regulation. ICMA states that only limited benefits have so far been brought about by the Prospectus Directive and Regulation. A true single EEA primary securities market has not materialised. Also, there are considerable differences in the way the Prospectus Directive and Regulation have been implemented and interpreted across the EEA and some of these differences inhibit the development of a true single market for securities.

The passporting mechanism has contributed considerably towards creating a single market for securities but a number of direct and indirect obstacles to its efficient functioning erected or retained by some Member States prevent it from providing its full benefits. Cross-border public offers and admissions to trading still involve unnecessary additional risks and costs compared to domestic ones.

The range of investment opportunities available to a pan-EEA investor has not changed substantially. Regulatory obstacles and legal risks have prevented the full opening of the international debt securities market to retail investors. The level of disclosure and protection has also not changed substantially.

The Q&As published by CESR have the potential to be a very useful tool but the procedure for their adoption could be improved in several important respects.

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