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Verbatim report of proceedings
Monday, 30 June 2003 - Strasbourg OJ edition

9. Securities prospectuses
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  President. The next item is the recommendation for second reading (A5-0218/2003) by the Committee on Economic and Monetary Affairs, on the Council common position with a view to adopting a European Parliament and Council directive on the prospectus to be published when securities are offered to the public or admitted to trading (5390/4/2003 – C5-0143/2003 – 2001/0117(COD)) (Rapporteur: Christopher Huhne).

 
  
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  Huhne (ELDR), rapporteur. – Mr President, this is not quite as dry or as difficult as the title makes it sound.

I wish to begin by thanking my colleagues on the Committee on Economic and Monetary Affairs for their hard work on the amendments on the prospectus directive. I also wish to thank the Commission for the important facilitating role it has played in reaching what I hope will be an agreed set of amendments when they are voted on Wednesday, and to thank the Greek Presidency – and before that the Danish Presidency – for the preparation of this particular dossier. I hope we will have an overwhelming vote in favour of the compromise amendments, with the agreement of the Council, and that we will therefore have a prospectus directive later in July when the Ecofin Council meets again.

This is a key part of the Financial Services Action Plan and of creating a single market in financial services. Instead of having to use 15 separate prospectuses to reach retail investors in the existing European Union, in future an issuer of bonds or shares will only need one. That will give a passport not just to 15 Member States but to 25 and a market of more than 400 million people. The single European market in new issues of shares and bonds is set to become a reality. This will lead to more competition and, therefore, greater choice for investors, cheaper capital for businesses, and more funding opportunities for many businesses that might be denied finance if they were limited to their national market.

Moreover, this key advantage – a single passport – has been achieved without some of the less felicitous baggage that was originally contained in a somewhat rushed proposal from the Commission and that would have added to the regulatory burdens, particularly on smaller listed companies. This deal ensures that there is no mandatory shelf registration and that there is no mandatory annual updating, unless the issuer intends to continue issuing shares or bonds. This is a significant achievement for this Parliament in influencing the final shape of this legislation.

Crucially this agreement also confirms the freedom that issuers of bonds have to go to different EU regulators for the approval of their prospectus, so long as the minimum denomination is EUR 1000 or more or, importantly, a nearly equivalent amount in other currencies, so that USD 1000 can also be a minimum amount.

The euro markets raised USD 1.6 trillion equivalent of finance for business last year and 60% of that finance was in non-euro currencies such as the dollar and the yen. Europe is the proud home of the international capital market and this deal now gives that international market a way of bringing its benefits across to domestic investors too.

The Council and the Commission have accepted the vast majority of the amendments passed by Parliament at its first reading in March 2002: on the choice of EU regulator for bonds, on a light touch for small and medium-sized businesses, on tailoring requirements to different issues, on lightening the burden on issues. Thanks to Parliament's insistence we have also reached compromise on the ability of national authorities to delegate approval of prospectuses to stock exchanges and others such as the nominated advisors in the aim market. There will be a review after five years and the Commission may reconsider the commitment to phasing out delegation after eight years. The political declaration from the Commission is important and it shows an open-mindedness faced with the evidence, which we would obviously expect.

We have also made clear that both national authorities and stock exchanges may continue to insist on higher standards of disclosure and corporate governance as a requirement of listing, if they so wish. This should put some fears to rest.

As regards the last-minute changes that were agreed only last week by the Council, we have also clarified that existing medium-term note programmes, a very important type of financing structure in the euro markets, can continue unchanged. Indeed they will now be extended beyond the four Member States which currently recognise them and will also benefit from the passport. This is a real breakthrough for the single market and this House can be proud of its influence in ensuring that the directive is an effective means of extending competition, choice and efficiency.

 
  
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  Bolkestein, Commission. Mr President, I wish to begin by saying that this directive is fundamental for the functioning of primary markets in Europe and for our aim to build an integrated capital market by 2005. For the Commission, the prospectus proposal has two aims: to facilitate fund-raising for European issuers and to ensure adequate levels of investor protection.

During the past two years this text has evolved significantly. There have been some important changes but the text maintains the necessary balance between facilitating for issuers and investor protection.

The Commission amended its proposal to take account of Parliament's position. After first reading, 50 out of 62 amendments were taken on board by the Commission in its amended proposal. The Council's common position is broadly in line with this amended proposal.

Today I should like to congratulate Parliament on its spirit of collaboration and its willingness to achieve convergence. We welcome the new amendments tabled by the rapporteur, together with the following Members of Parliament: Mrs Kauppi, Mr Ettl, Mr Goebbels and Mr Blokland. I am very optimistic that they will be accepted also by the Council.

I much appreciate Parliament's constructive spirit and I should like in particular to pay tribute to the rapporteur, Mr Huhne, for all his work to get approval for this compromise proposal. In particular I should like to thank him for his report and for the 21 new amendments he has tabled. We can accept them in their entirety, as we consider that they improve the text of the common position and contribute towards achieving the goals set by the proposal. In this context, we reject the first 47 amendments tabled, since those which could be accepted – even partially or in spirit – by the Commission are now covered by the 21 new amendments.

Regarding more particularly Amendment Nos 50 and 67, related to delegation of tasks from a competent authority to an exchange, I confirm that the Commission in the review to be conducted in accordance with Article 21 will also examine the conditions relating to the sunset period in the same article.

The Commission cannot accept Amendment Nos 69 to 71 since they provide for preferential treatment with respect to banks, and this is against the philosophy of the directive. Such treatment would create discrimination towards other institutions and distort competition. That is something the Commission objects to.

Finally, I should like to thank the Greek presidency for its most valuable efforts to reach agreement on this matter now. It is an important and highly significant achievement. We must now use our remaining energy reserves to resolve the investment services, transparency and, of course, take-overs directives by the April 2004 deadline.

 
  
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  Karas (PPE-DE).(DE) Mr President, Commissioner, Mr Huhne, ladies and gentlemen, I would like to start by giving Mrs Kauppi’s apologies. She regrets that her flight cannot get her here yet, and so she has asked me to stand in for her.

We know that this directive is an important part of the financial services action plan. What are this action plan’s strategic objectives for the financial internal market? The first is that a single wholesale market for financial services should be guaranteed; the second is the creation of open and safe retail markets, and the third is the modernisation of the rules of compliance and of the way in which they are monitored.

What is today’s debate about? Today we are debating the prospectus to be published when securities are offered to the public or admitted to trading. What do we mean by a prospectus? By that we mean a document published when shares or bonds are issued, containing those items of information considered necessary to investors. What does the directive aim at? It aims to introduce a single passport for prospectuses, approved by the authorities in the country of origin and subsequently recognised throughout the EU for the purposes of the public offering of securities and/or their admission to trading on regulated markets. In place of the fifteen separate authorisations still required despite two directives on the subject, only one authorisation will be required under the new directive for what will be the twenty-five Member States of the European Union.

I would like to extend very warm thanks to the rapporteur, to the shadow rapporteurs of all the groups, and also to the chairman of the committee, for the great deal of time and effort that they have devoted to this. Last Thursday, when we were in a conference call, we were in fact even more divided, but it was possible, on the Friday, for us to make a conciliation committee unnecessary; I think this right and proper, as we have no idea whether the conciliation committee would have enabled us to make any progress or might indeed have jeopardised this important directive.

The six major successes achieved by Parliament mean that we can say yes to the compromise. As early as first reading stage, we managed to add the sunset clause to the Lamfalussy procedure, to produce a better definition of professional investors and to take greater account of small and medium-sized firms. At second reading stage, and in recent days, we succeeded in getting a free choice of supervisory authority for non-dividend-bearing securities with a denomination per unit of at least EUR 1 000, which amounts, de facto, to a free choice of supervisory authority. We managed to get the deadlines for authorisation reduced; it is still possible for supervisory authorities to delegate; and the position will be reviewed after five years. If, though, the Commission’s report after these five years is an unfavourable one – which I do not expect it will be – the option of delegation will have to lapse after eight years, so that, here too, we have improved the Common Position along the lines desired by Parliament.

This does not mean that everything has been sorted out. It is a cause of anguish to me that there are two things that have not been achieved. One is a rule on basic prospectuses for all banks issuing shares, for which I campaigned. Here – as is, indeed, stated in the recitals – it was not possible to do justice to the aim of this directive, that being to speed the process up. The directive has rather missed the mark here. The second thing that did not get through – although this was adopted with the support of all groups in this House – was the increase in maximum value for each issuer from EUR 50 to EUR 100, in respect of which exceptions are possible. That would have been a help especially for states such as Austria and Germany, where no prospectus is at present required below this threshold. Although it is unfortunate that we did not succeed in this, the compromise is, all in all, a good one, and we will therefore be supporting it.

 
  
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  Ettl (PSE).(DE) Mr President, it really does take a lot of self-restraint, following this overture by Mr Huhne and Commissioner Bolkestein, not to let a note of discord disturb their duet. It falls to me, in any case, to congratulate the rapporteur on his work, even if – as far as the outcome is concerned – I do not entirely share his opinion.

The directive on prospectuses for securities forms, without any doubt, an important part of the financial services action plan. If they are to obtain finance on the capital market, businesses need these reliefs, which they had expected. As we are also dealing with this matter under some pressure of time, I would be the last to want this issue to go to a conciliation committee. We – that is, the Economic Affairs Committee – believe that conciliation under Italian aegis could not bring about any fundamental improvements to the status quo. It is still the case – and we are to vote on this as soon as tomorrow – that countries such as Italy, Spain, and France too, have certain reservations as regards points of detail in the European prospectus, about which you will hear more later.

I believe that, yet again, the Council and the Commission, in discussions on what is a typical codecision issue, are showing themselves to take a less flexible approach to this elementary question of financial markets than this House might have been able to expect. Our approach and our thinking were in every respect guided by the practice of the market, so that, if I am able to recommend approval of this second-reading compromise, it is more on the basis of the general weighing of the interests involved.

To be able to provide one single information document valid throughout the EU is, though, surely to the advantage of businesses that introduce shares, or make offers to buy, on European stock exchanges. It is obvious, though, that, in dealing with this matter, we have to consider the transparency of securities markets and, to an increasing extent, the protection of small investors and small and medium-sized enterprises. A procedure that is as simple and cheap as possible when it comes to the amount of an enterprise’s data that are required and the way in which they are to be updated, is meant to make for easier access to capital markets. That is what we need. To some extent – or almost exclusively – we have done justice to this, but our desire to extend, on the basis of liability, protection of small investors by defining responsibilities more clearly – with reference, for example, to analysts or chief accountants – has, unfortunately, met with rejection. Equally unfortunately, the issue of the venue of jurisdiction has found no clear resolution. Issuers were allowed to have recourse to the courts in their own countries, an advantage denied to investors. This may well continue to be a live issue. It is unfortunate that this immovability, which was not necessary in this case, has resulted in no further progress in the issues in the financial services sector that the public really care about.

Nor were the prevailing customary practices on European markets followed when it came to convertible debentures. Had these been unambiguously defined, as had indeed been proposed, quality improvements would have followed, because, for example, the right to convert would have gone to the owner of the securities. This is also highly significant in terms of Basle II, as this type of financial instrument is likely to become more popular.

It baffles me, Commissioner, how a minimum framework of information for regional and local authorities presenting prospectuses for loans in all the EU’s Member States, could come to be regarded as a hindrance rather than as a good thing. A measure of this sort would be of additional value in view of the EU’s enlargement. I regard that as regrettable, but at least other points were accepted, among them the choice of a minimum nominal value of EUR 1 000 or USD 1 000 – now determined by reference to the market – for all loans. The temporary solution of eight years – with the office authorising the prospectus allowing certain tasks to be delegated to the stock exchanges – is of no small significance to smaller financial markets and is a good way of dealing with this.

Last but not least, we can go along with what has been negotiated. Congratulations to the rapporteur, and no clashing discords to the Commissioner.

 
  
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  Patakis (GUE/NGL). (EL) Mr President, the proposed arrangements have a dual purpose. First, to restore the shaken climate of confidence of small working-class investors in the institution of the stock exchange, so that grass-roots savings can continue to be plundered unimpeded and, secondly, to set up a regulatory framework for the action of the big investors. In other words, the aim is to consolidate the stock exchange as a mechanism for concentrating capital and safeguarding a quick, easy profit for monopoly groups.

The proposals for measures to be taken are not at all convincing. In its communication, the Commission talks of practices which will improve the reliability of the market and help to attract capital, in other words, they will allay the fears of small investors so that they can plunder their savings with impunity. Having succeeded in sweetening them with a taste of the profits so that they gamble all their savings, by applying the idea of easy money, they have also managed to turn their heads by inciting them to raise gambling to an art form. So far, not only have no substantial control measures been taken, but also recent repeated scandals have revealed that even these very control mechanisms have advocated cheating by adopting creative accounting methods, and as a result the savings of the working classes, the capital of small investors and pension funds have grown wings and flown into the coffers of the monopoly groups, which grow rich in this parasitical manner.

The history to date of the stock exchange and of the control mechanisms relating to it show that it is the place where 'big fish eats little fish' applies absolutely. The myth that state controls can limit speculation in the very temple of speculation has now been exposed. Only an economic and political way out that puts grass-roots needs first and socialises the basic means of production constitutes a promising prospect for safeguarding grass-roots incomes today.

 
  
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  Villiers (PPE-DE). Mr President, Commissioner Bolkestein put the history of this debate in just a few words with his usual aplomb. He said that the text has evolved considerably since the Commission first published it. That reflects in a very understated way the radical changes we have seen to this proposal, due in large part to the efforts made by this House. Those changes have the full support of my group and the British Conservative delegation within it.

We have campaigned from the start to end the requirement for mandatory, annual shelf registration. We are delighted to see that is one of the 50 of 62 amendments which were accepted by the Commission and the Council. This requirement could have imposed millions of pounds and euros' worth of costs on businesses large and small across the European Union. The original proposal from the Commission could have devastated Europe's small-business stock markets such as Aim markets. The changes we have seen as a result of Parliament's efforts are extremely welcome and have considerably improved the proposal.

We have also been campaigning for a suitable framework to cover bonds. It was a concern at the early stages of the text that a 'one size fits all' framework designed for equities was being imposed on the bond markets. Again, we are very pleased to see that the bond market is going to be given distinctive treatment, which reflects the differences between the bonds and the securities market.

We fundamentally support the idea of issuer choice. Giving issuers the maximum facility and flexibility in choosing a jurisdiction is one of the best ways to facilitate genuine cross-border trade and genuine integration of our capital markets. We can accept the compromise on this point, though my delegation and probably the group as well would have liked to have been more radical in this area and given issuers a wider choice; in particular, we would have liked to have seen issuer choice and flexibility in relation to equities.

Certainly we are delighted to see the flexibility that has been introduced for the bond market. There is issuer choice in the bond markets at the moment and that has contributed to integration of the markets and a building up of specialist regulatory expertise in particular jurisdictions. To require all issuers of bonds to issue in their home Member States would have been a retrograde step in creating an integrated capital market.

We are also very concerned to ensure that the language regime cannot be used to protect markets. That was the key flaw in the existing prospectus directive and again we are very pleased at the development of the text. We are now confident that the language regime is acceptable again. We would have liked something a little more radical, but I think there are safeguards which will prevent the difficulties we have seen with the current prospectus directive and make it much more difficult for language to be used to protect national markets.

I am also pleased that the scare about the threat to corporate government standards has been dispelled. It is now quite clear that the prospectus directive will not prevent Member States from imposing the high corporate government standards that exist in many places, for example in the United Kingdom.

This debate is also an illustration of the importance of the Commission carrying out extensive consultation in advance of publishing its proposals. The prospectus directive was published without much extensive consultation and it has taken us longer to resolve the issues as a result. I am pleased that the Commission in its subsequent proposals has consulted more extensively and effectively before publication. I hope that is the attitude it will take in the future.

 
  
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  Berès (PSE).(FR) Mr President, Commissioner, ladies and gentlemen, the report being debated today is vital for harmonising financial markets, since it will allow securities to be quoted on the stock exchange lists of all European markets. It is also vital, however, as it guarantees a uniform standard of information. This is necessary if markets are to be transparent and secure, and therefore if they are to function properly. This report also sets out to guarantee that all parties are given full information on the securities quoted.

There is no doubt that the Greek Presidency’s compromise represents a laudable balance which allows the different European approaches to market regulation to be reconciled. When I hear my fellow Member from Britain make the case for the language regime, however, a flicker of suspicion stirs within me. For while I can understand that a Dutchman, a Frenchman or an Italian might make the case for a language regime which is not designed to protect markets, I imagine a different concept of market protection when I hear it from the mouth of a Londoner.

More seriously, at this stage in the Parliamentary process, I would like to discuss two matters which, I feel, are not minor details but remain pressing questions. The first is the choice of competent authority for convertible bonds, by which I basically mean Eurobonds. I feel that if we leave the choice of competent authority to companies, we encourage the lowest-bidding regulator. The issuing companies will naturally gravitate towards the least parsimonious authorities. We therefore risk weakening the markets. I accept the distinction established between debt and capital. Small investors, indeed, are not concerned with bonds. We can thus tolerate a lesser degree of rigour. On the other hand, I find it unacceptable to admit free choice for bonds. They allow access to a company’s capital and are one of the two forms of new equity issue. Moreover, these equities are liable to be held by the public, and this will increasingly be the case in future. On this point, the Presidency’s compromise appears satisfactory.

The second problem is the delegation of powers by the authority. In the Member States where such delegation exists, the stock exchanges to which these tasks are delegated have very often become private profit-making organisations. They are thus de facto both judge and judged after the prospectuses have been inspected. That poses undeniable problems relating to the quality of scrutiny of the prospectus and possible distortions of competition. I feel that the eight-year period allowed in the Presidency’s package for the Member States to come into line with this reality of business life really is the longest acceptable time limit. It should allow us to put an end to this type of delegation. These two questions remain pressing. A few other details might be worth mentioning here: the possibility of SMEs or natural persons considered as qualified investors opting out of this statute; the fact that if a competent authority has not scrutinised a prospectus within the prescribed time limit, that prospectus is approved; the problem of languages, which I have mentioned briefly.

To sum up, Mr President, I hope that Parliament votes in favour of the Greek Presidency’s compromise, a solution which is acceptable to all concerned.

 
  
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  Lulling (PPE-DE). (DE) Mr President, I very much welcome the prospectus directive that is before us. Its importance lies in its regulation of the issue of European Passports for the prospectuses, which will enable securities to be marketed right across the European Union’s internal market. If a prospectus is authorised by a competent national authority, this authorisation will, as we know, be valid in all other Member States. This means that the European Passport will save the issuers a lot of expense and administrative effort.

As I have already said, this directive is one of the most important components of the Commission’s action plan, which aims to establish an internal market in the area of financial services. In December 2002, the Commission estimated that the creation of an efficient internal market in securities would result in a 1.1% growth in gross domestic product. I hope they are right in saying this, as we could all do with a spurt of growth under present circumstances.

The recommendation for second reading, as presented to plenary, is a fine document. I would like to express my congratulations to the rapporteur, Mr Huhne, as the text improves two important aspects of the Common Position about which I am personally concerned. One is that this text allows the issuers, from a denomination per unit of EUR 1 000 and upwards, to choose, when it comes to the approval of the prospectus, between, firstly, the competent authority of the Member State in which the issuer’s registered office is situated; secondly, that of the Member State in which the securities are authorised to be traded on a regulated market; or, thirdly, that of the Member State in which the securities are offered to the public. Having EUR 1 000 as the denomination per unit is far more realistic than the threshold value of EUR 5 000 estimated by the Council, as it will be small investors that will have a particular interest in it. So I am very much in favour of this and hope that it will not be watered down still further. I am given to understand that it still stands even after the compromise with the Council.

Secondly, this text allows the competent authorities to delegate the examination of the prospectus to other bodies possessing the necessary expertise. In small Member States in particular – both present and future ones – the tradition is that prospectuses are examined by the stock exchanges. Responsibility remains, of course with the competent state authorities, whilst stock exchanges do have the necessary highly-qualified staff. In Luxembourg, we had great difficulties finding experts with Luxembourg nationality, as the officials of the supervisory authorities have to be Luxembourg nationals, so I am glad that this delegation does not lapse after five years, but will be checked by the Commission to see if it still works. Rather than sharing Mrs Berès’ view, I am convinced that this examination will not produce adverse judgments; we will not end up, after eight years, with a delegation of this sort becoming inevitably impossible.

I very much want to underline once more how significant this directive is, and I am glad that Commissioner Bolkestein has told us that he can go along with the twenty-one compromise amendments on which the rapporteur and the Commission have agreed. I would again like to thank Mr Huhne most warmly for the work he has done, which has been of real value, and for his sympathetic attitude, particularly to the concerns that I raised and which, it is to be hoped, will soon be dealt with in the way I have described. If that happens, we will soon have a proper directive, one that will be of great importance to the smooth functioning of the internal market.

 
  
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  Skinner (PSE). Mr President, if compromise is about being able to live with views which are not entirely your own then the rapporteur has done tremendously well in terms of handling the debate within the House and within the committee, with the Commission and with the Council. He certainly listened to his colleagues and I congratulate him for his sensitivity.

As Mr Ettl said, raising capital is vital, and it is more vital perhaps for small businesses where delicate problems can cause immense harm. The protection of businesses from disproportionate costs is surely vital and the attempt which has been made to steer this text towards a more balanced approach effects what I believe is the long-term security for this market. An obvious example, which was mentioned by Mrs Villiers, is on shelf registration, which could have caused tremendous harm and has been avoided. I also fought hard against this. I believe that is a great success.

I would also like to mention, rather than going into the details which have been repeated so much, the risk capital action plan of which this is a part as well, and I am always keen to make sure we cross-reference. It is part of the Lisbon goals for growth for all our economies. The single market helps create the potential for such growth. As a past rapporteur on the risk capital action plan, I am pleased to see it has completed its passage through this House and I am pleased that it has been completed successfully so far.

As the Commissioner says, there are other reports to come and I hope that they will reflect the same level of debate that we have heard for this particular report. It was not perfect when it reached this House – very rarely things are of course, which allows us to stay in the job we are in – and I believe that Parliament has handled it supremely well and this demonstrates the maturity which it can lend to such technical reports.

I look forward therefore to our discussion on the transparency directive, which, as you now know, has been given to the Committee on Economic and Monetary Affairs. As the rapporteur I look forward to a very vital debate, as we will expect for the completion of the financial services action plan that this directive will be pointed at as well.

 
  
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  Bourlanges (PPE-DE).(FR) Mr President, I shall add my voice to those of my fellow Members who have congratulated Mr Huhne on the undeniably high quality of his report and on his feeling for compromise. If the report is adopted, these qualities will allow decisive progress to be made in one important aspect of the unification of financial markets.

Indeed, I believe that all of us here are convinced of the advantage of making swift progress and bringing this to a speedy conclusion, avoiding a set of conciliation proceedings desired by nobody. Conciliation is what remains when compromise has failed, and, as a matter of fact, I feel that the compromise we have reached is relatively satisfactory. It is not perfect for anybody, but it does not damage anybody’s interests, and therefore constitutes a promising starting point.

We had several problems, but we have obtained a satisfactory result in terms of the choice of competent authority. That is a victory for Parliament. I believe that this is a cause of which the rapporteur was a great supporter, and he has won the day. Our worries related, first of all, to the conditions of issue of the passports and the time limit for dispatching them. It was necessary to find a balance between, on the one hand, the swiftness required by organisations wishing to invest and, on the other, the thoroughness with which their applications should be scrutinised by the competent authority. On this point, the compromise is satisfactory. The matter of the language regime was equally irksome for us. It is of the essence that everyone should understand what is at issue here. The common position may be less than perfect, but I feel that it does offer sufficient safeguards.

The competent authority’s delegation of certain tasks to a more technical agency awoke intense worries within my group, relating to what I will term ‘Lamfalussism’ run riot. By this I refer to the phenomenon of being induced to entrust activities of almost regulatory dimensions to technical, specialised agencies, lacking in transparency and subject to minimal controls. It was vital to establish a time limit after which this type of delegation would no longer be possible. The committee’s report allowed for no such thing, but the compromise does. It establishes eight years as the term for this possibility. That is a long time, but at least we can be sure that, when it has elapsed, the possibility for this type of delegation will have expired. I believe this is a very good thing.

Finally, there was the matter of convertible bonds. Should convertible bonds be treated as equity securities? On this point, the compromise relinquishes a committee vote which we found unsatisfactory, for convertible bonds should be treated as equity securities. We are fully reassured on this important point. That, Mr President, is why I believe that we should all vote in favour of these amendments and adopt the proposed compromise. Mr Turchi’s amendments will remain on the table. They are interesting, of course; but they open a Pandora’s box rather than a debate. These are intelligent amendments, but since they cast doubt on many aspects of the definition of securities, it is better to close Pandora’s box once more so as to obtain a sound decision quickly, as the rapporteur hopes and as our group desires.

 
  
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  Randzio-Plath (PSE).(DE) Mr President, there is no doubt that the European Passport for issues of securities will, in future, make it easier to raise capital. This proposal is one of our contributions to the removal of bureaucracy and of the other barriers that mean that a financial internal market is still not yet feasible. I have to say that there has been very constructive cooperation between the institutions, and this has been made easier by the rapporteur’s willingness to compromise; we have all had to agree on formulations in order to produce a watertight piece of legislation.

I think it was a great stroke of genius for us to draw a distinction between equity and non-equity securities. That was a smart move, for which I am sure that, one day, both investors and issuers will be grateful to us. When we do actually adopt a directive, it will be important for us always to attempt to balance the interests of the issuers and those of investors. In this directive, this House has again attached great value to the protection of small investors, who have in recent years been particularly unsettled, and we are obliged to restore small investors’ confidence if we really do want to have a properly-functioning internal financial market from which everyone can benefit.

The three things that are important are, firstly, that every investor will in future be able to rely on the prospectus underlying an issue complying with high standards of quality, without regard to the issuer’s home country and also without reference to the country in which the security is offered. This will become a selling point. The second is that, in the course of negotiations, we were able to make it a requirement that the summary prospectus, which is the main source of information for small investors, should comply with high standards and form part of the prospectus. If the summary is false, misleading or inconsistent, it must be possible, in consequence of this, for those responsible to be brought to account. Thirdly, the investor is protected against misleading advertising, in that it is ensured that issuers, when describing their product in the media, cannot promise more than the security can hold in accordance with the prospectus.

In conclusion, I would like to mention one concern that again became very apparent when this directive was under discussion, and that is the question of whether Parliament’s rights have actually been safeguarded. If I consider the Interinstitutional Agreement in the light of better regulation, I have my doubts about this, so you can be sure that we will consider very carefully whether the work that you and CESAR do on this particular directive meets our expectations and is within the framework we have set. If you were to fully meet Parliament’s expectations, that would build confidence in the legislation to be derived from this in future, and in secondary legislation.

 
  
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  President. The debate is closed.

The vote will be on Wednesday.

 
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