WRITTEN QUESTION E-1876/03 by Christopher Huhne (ELDR) to the Commission. Prospectus- denomination of issues.
Date: 2003-06-06
Institutions: European Parliament, Provisional data
Subjects: EU statistics, bond, financial statistics, issue of securities

13.3.2004

EN

Official Journal of the European Union

C 65 E/97

(2004/C 65 E/109)

WRITTEN QUESTION E-1874/03

by Christopher Huhne (ELDR) to the Commission

(6 June 2003)

Subject: Prospectus approval

Will the Commission estimate the current time period from submission to approval of a prospectus
typically necessary both for debt and for equity prospectuses in each Member State?

Answer given by Mr Bolkestein on behalf of the Commission

(30 June 2003)

The Commission has not sought to estimate the current time period from submission to approval of a
prospectus typically necessary for debt and for equity prospectuses in each Member State. The Commission
position does not consider that such average figure, even at Member State level, would lead to any useful
conclusions.

Such figures would not be comparable, because the approval process is different in each Member State
(In practice, scrutiny practices will range from a simple verification that a document has been sent to the
competent authority, without reading the document,
the clearness,
objectivity, accuracy and consistency of the prospectus on all items of information, including the financial
statements). These differences arise most notably from differences in the level of civil and regulatory
liability between Member States.

to an extensive verification of

At national level, the time period necessary for scrutiny in order to obtain an approval will also differ on a
case by case basis depending notably on the quality of the submitted draft document, on its size, on its
content, on the ability of the issuer to draft such a document, on its knowledge of the necessary procedure,
on the existence of a previously approved prospectus, on the type of offers (for example Initial Primary
Offer or frequent issue), on the resources of the competent authority, etc.

Therefore, the Commission did not propose legislation with a one-size-fits-all approach. The Commission
has favoured different maximum time limits for this scrutiny and approval process. It intends to prevent
competent authorities from imposing excessive delays on issuers but it should also allow competent
authorities enough time in all possible circumstances to correctly perform their tasks.

The Commission has checked the different maximum time limits for a prospectus approval before the
adoption of its amended proposal and has taken into consideration the various maximum time limits
existing in several Member States. The Commission has also taken into account the fact that the envisaged
maximum time limits were shorter compared to the existing ones in the United States which is the world
biggest capital market. The proposed time limits are also shorter compared to the existing ones in Belgium,
Greece, Spain, France, Italy, Luxembourg, Austria and the United Kingdom. However, the maximum time
limits are more currently stringent in Germany, the Netherlands and Finland. In some Member States
(notably Denmark, Ireland, Portugal and Sweden), the law does not provide for a defined maximum time
limit.

(2004/C 65 E/110)

WRITTEN QUESTION E-1876/03

by Christopher Huhne (ELDR) to the Commission

(6 June 2003)

Subject: Prospectus- denomination of issues

Will
the Commission estimate the number of bond issues, and the total volume of
denominations of EUR 5 000 or less, EUR 1 000 or less, EUR 500 or less and EUR 100 or less?

issuance,

in

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.