WRITTEN QUESTION E-0991/00

by Klaus-Heiner Lehne (PPE-DE) to the Commission

(31 March 2000)

Subject: New issue procedures

The handling of the Infineon new share issue (Infineon being a subsidiary of Siemens AG) in Germany this March has attracted considerable public criticism. Siemens executives benefited from gross favouritism when the shares were allocated, as did big investors. Furthermore, the bank lottery for private investors was not organised transparently, and there are suspicions that it was conducted arbitrarily.

Will the Commission submit proposals for standard rules to govern new stock market issues whereby companies would be obliged to treat investors equally?

Does it believe that preferential treatment of certain domestic investors infringes the ban on discrimination?

Will it investigate issue procedures in Germany in the light of the Infineon case and its implications?

Answer given by Mr Bolkestein on behalf of the Commission

(17 May 2000)

In order to create a common European market for securities and a common capital market, several directives have been adopted to harmonise investor protection in the national securities legislation. The aim is to create minimum standards of harmonised rules for securities transactions in the internal market. Therefore, the directives harmonising European legislation in the securities field refer in principle to securities transactions and not to investors.

The directives concerning the procedure of initial public offering are Council Directive 79/279/EEC of 5 March 1979 co-ordinating the conditions for the admission of securities to official stock exchange listing(1) and Council Directive 80/390/EEC of 17 March 1980 coordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing(2). They harmonise minimum standards for the admission of securities to official stock exchanges and for adequate investor information. They do not regulate the initial allocation of shares (allotment).

No decision on European level has yet been made on requirements concerning the procedure for allotment. Allotment procedures follow national rules and vary between the Member States. To respond to this, national supervisory authorities have decided to create a

working group within the framework of the Forum of European Securities Commissions (FESCO). This group was established in December 1999 and is looking to develop a common approach to the regulation of allotment and the equal treatment of investors. A draft paper of this group is expected during the second half of 2000.

Within the framework of its financial services action plan, the Commission will also examine the rules concerning the procedures for issuing securities. It will be looking to see to what extent rules referring to allotment procedures could usefully be proposed.

Member States are not allowed to grant preferential treatment to their own nationals. The preference of certain investors in the allotment procedure of shares of the company Infineon occurred between private parties. It is not a result of a Member State rules giving preference to its own nationals. Therefore, this event is not in principle covered by anti-discrimination rules provided by the EC Treaty.

The Commission does not intend to examine the issuing procedures in Germany in the light of the issue of Infineon shares. The information available, discloses no basis for such an assessment.

(1) OJ L 66, 16.3.1979.

(2) OJ L 100, 17.4.1980.