The creation of a
true Single Passport for Issuers would be an important instrument
for the integration of European capital markets. The current
EU prospectus regime does not achieve this. The goal of the
Commission's proposal for a new directive on European Prospectuses
is to create such a single passport, enabling prospectuses to
be approved by only one member state authority and then accepted
throughout the EU for public offer and/or admission to trading
on regulated markets. This aim is generally supported, but industry
and others have expressed serious concerns about the approach
adopted in the proposal. Concerns include: the requirement that
issuers from EU Member States must have their prospectuses scrutinised
and approved by the competent authority of their country of
registration, thus denying issuers the choice of where to have
this service provided; the implication that issuers whose securities
are only to be offered abroad may still be required to submit
a prospectus in their national language; the proposal to concentrate
the responsibility for prospectus approval in one central administrative
authority per Member State; and the scope left to national authorities
to impose additional requirements. Other concerns raised relate
to: a 'one-size-fits-all' approach for all types of securities,
offers, and issuers; and the exemption from the rules of securities
issued by a Member State or one of its regional or local authorities.
Many of these and other points are being raised in the European
Parliament, and the Commission has accepted that some changes
to the proposal are appropriate. Industry is hoping that Parliament
will play an important role in ensuring that this time there
is success in establishing a European passport, without in the
process damaging European markets.
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Capital Raising in Europe
The creation of a true Single
Passport for Issuers would be an important instrument for the integration
of European capital markets. Public offers of securities, in particular
to retail investors, remain purely national due to costs and delays
of accommodating national practices and restrictions into one single
offering document, even after two European Directives. This obviously
limits the ability of European investors to diversify their portfolio
investment, and of issuers to expand their shareholder base and
their debt financing activities in a cost-efficient and timely way.
