WRITTEN QUESTION E-1877/03 by Christopher Huhne (ELDR) to the Commission. Prospectus-delegation.
Date: 2003-06-06
Institutions: European Parliament, Provisional data
Subjects: EU Member State, administrative formalities, documentation, financial legislation, issue of securities, supervisory body

C 65 E/98

Official Journal of the European Union

EN

13.3.2004

Answer given by Mr Bolkestein on behalf of the Commission

(14 July 2003)

The Commission has not sought to estimate the number of bond issues nor the total volume of issuance,
in denominations of EUR 5 000 or less, EUR 1 000 or less, EUR 500 or less, and EUR 100 or less, because
it does not believe this number will allow it to draw conclusions on the usefulness of a given threshold on
individual denomination.

it is important to note that the concept of high individual denominations for
First, as background,
securities was introduced with the aim of making a clear separation between securities aimed at wholesale
investors and those aimed at the retail market.

The Commission has knowledge of figures related to existing bonds’ individual denominations (from the
International Primary Market Association (IPMA) and also used by the European Banking Federation).

However, the Commission believes there is no added value in such figures for two main reasons:

(cid:1) Existing individual denominations are today defined at a low level for practical reasons. For example, it
is common practice to have individual denominations of one euro because bonds are quoted in
percentages.

(cid:1) Current statistics will not assist in estimating how bond issuers will define in the future the individual
denomination of their issues, in the context of the envisaged legislation notably for debt securities
aimed at wholesale investors. The Commission believes the choice between securities aimed at
wholesale investors will be predominant compared to the option of determining the competent
authority for each issue. In fact,
investors (with
individual denomination of less than 50 000 euro) will rarely make use of the flexibility of the
determination of the home competent authority, because these offers of securities are mostly done by
credit institutions only to their customers and generally not listed.

it believes that issuers of bonds targeting retail

(2004/C 65 E/111)

WRITTEN QUESTION E-1877/03

by Christopher Huhne (ELDR) to the Commission

(6 June 2003)

Subject: Prospectus-delegation

Will the Commission estimate the proportion of prospectuses approved in Member States in the last
calendar year that were approved directly by a competent authority, and the proportion that were
approved by authorities such as exchanges or intermediaries to which the task was delegated? Will the
Commission estimate the number of complaints of incompleteness or inaccuracy of the prospectus in each
case?

Answer given by Mr Bolkestein on behalf of the Commission

(30 June 2003)

The Commission has not sought to estimate the proportion of prospectuses approved directly by a
competent authority, nor the proportion that was approved by authorities such as exchanges or
intermediaries to which the task was delegated. Under the current situation, this question is not applicable
or relevant for the time being in most Member States. In fact, to the Commission’s knowledge, there is
only one specific regulation on this matter in Austria (auditors and banks are in charge of the review of
the prospectus under a delegation from the stock exchange).

However, the Commission has carefully studied the nature of the different competent authorities for the
tasks of scrutinizing and approving prospectuses in all Member States. Exchanges are in charge of the
review of prospectuses in Denmark, Germany, Greece,
Ireland, Luxembourg, Austria and Sweden.
However, it should be noted that, in those Member States prospectuses for offer of securities without
listing are generally reviewed by a different competent authority, generally a public body.

13.3.2004

EN

Official Journal of the European Union

C 65 E/99

It is important to note that in the Netherlands, the tasks of reviewing prospectuses was recently transferred
from Euronext NV to the new Financial Market Authority and Ireland envisages doing a similar change.

The Commission has not estimated the number of complaints of incompleteness or inaccuracy depending
on which kind of entity is in charge of the review of the prospectus. First, it does not consider that the
number of complaints received by competent authorities on missing or misleading information in the
context of prospectuses would permit the Commission to draw interesting conclusions. Secondly, the
Commission considers that the quality of the review is not necessarily linked to the nature of the entity in
charge of the review.

(2004/C 65 E/112)

WRITTEN QUESTION E-1880/03

by Christopher Huhne (ELDR) to the Commission

Subject: Capital flows between euro-area countries

(6 June 2003)

Further to the answer to question E-1134/01 (1), will the Commission examine the scale of gross capital
flows (not net capital flows) between the euro-area countries since the launch of the euro, compared with
the periods before, and state whether there has been an increase in the scale of such flows and if so by
how much?

(1) OJ C 261 E, 18.9.2001, p. 228.

Answer given by Mr Solbes Mira on behalf of the Commission

(14 July 2003)

Increases in cross-border capital flows can provide a positive contribution to economic growth and
efficiency increases. The introduction of the single currency has not only removed exchange rate risks for
capital flows within the euro area, but also stimulated the creation of a common capital market in the euro
area. Both effects have facilitated cross-border capital flows within the euro area and it can therefore be
presumed that the euro has positively influenced the volume of capital flows. However, at the same time a
number of other determinants matter for capital flows and it appears very difficult, if not impossible, to
single out the impact of the euro on capital flows by analysing capital flow time series. For instance, the
successful convergence of long-term interest rates in euro area economies has reduced incentives for
investors to diversify across government bonds issued by different euro area economies (at the end of
2002 the yield spreads between German ten-year government bonds and similar assets in other euro area
economies had declined to less than 20 base points).

Another difficulty arises from the rather unsatisfactory data availability. There is no single database that
provides complete and timely information for all participating economies. Observations stem mostly from
foreign direct investment (FDI) data, which are received and published by Eurostat and from balance of
institutions (e.g. national central
payments data,
banks).

in particular capital accounts, published by national

Foreign direct investment data are available for most euro area countries up to year 2001 from Eurostat’s
NewCronos database, but for some countries only equity and ‘other capital’ (loans between the mother
company and the affiliates) investment data is available (i.e. reinvested earnings are not available for some
Member State). The comparisons below refer to equity capital foreign direct investment flows. It has to be
noted that at the level of the Member States the strong impact of single transactions (e.g. telecom mergers
and acquisitions across borders in 2000) means a certain obstacle to any interpretation of these data. If
one nevertheless compares equity FDI flows between single Member States and the rest of the euro area,
some differences between the pre-euro area and the euro area years become visible.

The qualitative changes between the three last years in Stage II (1996-1998) and the first three years of
Stage III (1999-2001) could indicate a certain increase in the amount of capital flows. In all reporting
countries the amount of foreign direct investment abroad (i.e. in other euro area economies) has gone up,