Opinion of the Commission  pursuant to Article 251 (2), 3rd paragraph, point (c) of the EC Treaty on the European Parliament's amendments to the Council's common position regarding a proposal for a Directive of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC amending the proposal of the Commission pursuant to Article 250(2) of the EC Treaty
Date: 2003-07-10
Institutions: European Commission
Subjects: dissemination of information, drafting of EU law, financial institution, financial market, harmonisation of standards, information, securities, takeover bid

EN

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.07.2003
COM(2003) 432 final

2001/0117 (COD)

OPINION OF THE COMMISSION

pursuant to Article 251 (2), 3rd paragraph, point (c) of the EC Treaty on the European
Parliament's amendments to the Council’s common position regarding a proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

ON THE PROSPECTUS TO BE PUBLISHED WHEN SECURITIES ARE OFFERED
TO THE PUBLIC OR ADMITTED TO TRADING AND AMENDING DIRECTIVE
2001/34/EC

AMENDING THE PROPOSAL OF THE COMMISSION
pursuant to Article 250(2) of the EC Treaty

1.  HISTORY 

Date of transmission of the proposal to the EP and the Council
(document COM(2001) 280 final – 2001/0117(COD)1:

01 June 2001

Date of the opinion of the Economic and Social Committee2:

17 January 2002

Date of the opinion of the European Parliament, first reading3:

14 March 2002

Date  of  transmission  of  the  amended  proposal  to  the  EP  and  the
Council (document COM(2002) 460 final – 2001/0117(COD)4:

9 August 2002

Date of adoption of the common position5:

24 March 2003

Date of the opinion of the European Parliament, second reading6

02 July 2003

2.  SUBJECT OF THE PROPOSAL

The proposed Directive seeks to ensure that adequate and equivalent disclosure standards are
in  place  in  all  Member  States  when  securities  are  made  available  to  all  European  investors
either  through  an  offer  to  the  public  or  because  they  are  admitted  to  trading  on  a  regulated
market.

Under  current  EU  rules,  mutual  recognition  is  granted  only  to  prospectuses  that  set  out  the
information required in  the  Listing  Particulars  Directive  (80/390/EEC)  and  are  approved  by
the  competent  authorities.  The  host  country  authority,  in  the  case  of  recognition  of  the
prospectus,  is  authorised  to  require  additional  information  related  to  the  domestic  market.
Regulations  and  practices  vary  widely  between  European  Member  States.  As  a  result  EU
capital  markets  have  been  fragmented  and  it  has  rarely  proved  possible  to  use  the  existing
prospectuses to raise capital across frontiers within Europe. Additionally there is no European
recognition system for securities falling outside the scope of the 80/390/EEC Directive.

To this end, the proposed Directive harmonises requirements for the drawing up, approval and
distribution of the prospectus. The entry into force of the Directive will result in the creation
of a true European passport for issuers by giving, Community-wide validity to the prospectus
approved by the issuer’s home competent authority, in order to facilitate the raising of capital
for all types of issuer.

The key features of the proposed Directive are the following:

(cid:1)  definition of clear  conditions related to the prospectus for offers to the public of

securities and for admission to trading on a regulated market;

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2

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5

6

OJ C 240 E, 28.08.2001 p.272.
OJ C 80, 03.04.2002 p.52.
OJ C47, 27.2.2003, p.511-524
OJ.C 20 E, 28.01.2003 p.122
Not yet published in the Official Journal
Not yet published in the Official Journal

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(cid:1)  harmonisation of the essential definitions in order to avoid loopholes and different

approaches, thus ensuring a level playing field throughout the EU;

(cid:1)  the  introduction  of  special  EU  rules  for  securities  with  an  high  minimum
denomination (50 000 Euro), which are designed to be traded by professionals;

(cid:1)  an  adapted  regime  aimed  at  making  things  easier  for  small  and  medium-sized
companies,  which  would  not  be  obliged  to  draft  a  prospectus  if  only  a  small
amount of securities is offered to the public;

(cid:1)  disclosure  standards  based  on  international  standards  (IOSCO)  with  schedules
adapted depending on the nature of the issuer and the type of securities involved,
for example: equity securities such as shares, non-equity securities such as bonds,
derivatives  securities  such  as  covered  warrants,  securities  with  a  high  minimum
denomination and mortgage bonds;

(cid:1)  the  introduction  of  new  prospectus  formats  for  frequent  issuers,  notably  for
offering  Euro  Medium  Term  Notes,  derivatives  securities  such  as  covered
warrants, or for mortgage bonds issued on a continuous or repeated basis;

(cid:1)  an effective regime for the "single passport". For companies to issue securities, or
admit them to trading, in any EU Member State, they would simply need to notify
the authorities in that country of their prospectus and show that it has already been
approved by the appropriate authority in another Member State.

The proposed prospectus Directive also follows the approach suggested by the Committee of
Wise Men (chaired by Mr. Lamfalussy) in February 2001 and endorsed in a Resolution of the
Stockholm  European  Council  in  March  2001.  This  approach  is  based  on  differentiating
framework principles from implementing measures.

1. 

THE COMMISSION'S OPINION ON PARLIAMENT'S AMENDMENTS 

Summary

The  Parliament  has  amended  the  Council  common  position  with  21  amendments.  The
Commission  accepts  all  of  the  Parliament's  amendments,  i.e.  Amendments 48  to  68.  Those
amendments accepted as a whole annul the amendments 1 to 47.

Parliament's amendments in second reading

3.1. Amendments accepted by the Commission 

All compromise amendments are accepted by the Commission.

Amendment  48,  introducing  a  new  Recital  12a,  clarifies  that  offering  programmes  may
include different types of non-equity securities.

Amendment  49,  introducing  a  new  Recital  14a,  clarifies  that  national  regulators  and
exchanges may ask for other disclosure requirements in the context of admission to trading on
a regulated market, provided that these do not relate to prospectus requirements. 

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Amendment  50,  modifying  Recital  35,  introduces  a  five-year  review  clause  concerning  the
delegation of tasks. The option to delegate tasks from the competent authority to other entities
will lapse after eight years. This amendment is linked to amendment 67 below.

Amendment  51,  modifying  Article  2  (1)  (k),  clarifies  that  issues  envisaged  in  an  offering
programme may not take place during the specified issuing period of one year. 

Amendment 52, modifying Article 2 (1) (l), clarifies that securities issued in a continuous and
repeated manner includes both issues on tap and frequent separate issues. 

Amendment 53, modifying Article 2 (1) (m) (ii), introduces flexibility into the determination
of  the  home  competent  authority  for  issues  of  non-equity  securities  with  individual
denomination of at least 1000 Euro. It also clarifies that this threshold is applicable to other
denomination expressed in other currencies with a nearly equivalent value. 

Amendment 54, modifying Article 2 (1), introduces a new definition for a base prospectus in
line with the procedure outlined in Article 5.

Amendment  55,  modifying  Article  5  (2)  (d),  clarifies  the  content  of  the  warning  to  be
contained in the summary, on liability attached to the summary. 

Amendment  56, modifying Article 5 (4),  clarifies that an issuer should  be  able  to  decide  to
use a base prospectus or a traditional prospectus (composed of a single document or several
documents) in the context of an offering programme. 

Amendment  57,  modifying  Article  11  (1),  clarifies  that  incorporation  by  reference  of
information in a prospectus shall be possible for documents published at the same moment as
the prospectus. 

Amendment  58, modifying Article 13  (2)  (1), sets  the  maximum  time  limit  for  approving  a
prospectus to 10 working days.

Amendment  59,  modifying  Article  13  (3),  sets  the  maximum  time  limit  for  approving  a
prospectus to 20 working days in the context of an initial public offering. 

Amendment  60,  modifying  Article  13  (4),  sets  the  maximum  time  limit  for  notifying  the
incompleteness of a prospectus to 10 working days.

Amendment  61,  modifying  Article  13  (5),  sets  the  maximum  time  limit  for  notifying  the
transfer of approval of a prospectus to 3 working days.

Amendment  62,  modifying  Article  14  (2),  introduces  the  option  for  an  issuer  to  publish  its
prospectus in an electronic form on the website of the regulated market where the admission
to trading is sought.

Amendment  63,  modifying  Article  14  (4),  clarifies  that  the  prospectuses  or  the  list  of
prospectuses approved by a competent authority may alternatively be published on the web-
site of the regulated market.

Amendment  64,  modifying  Article  15  (3),  clarifies  that  advertisements  put  out  before  the
publication of a prospectus should not be inaccurate or misleading. 

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Amendment  65,  modifying  Article  16  (1),  sets  the  maximum  time  limit  for  approving  a
supplement to 7 working days. 

Amendment  66,  modifying  Article  18  (1),  sets  the  maximum  time  limit  for  notifying  the
certificate  of  approval  of  a  prospectus  to  1  working  day  after  its  approval  if  the  request  is
submitted together with the draft prospectus.

Amendment 67, modifying Article 21 (2) (1), introduces a five-year review clause concerning
the  delegation  of  tasks.  The  option  to  delegate  tasks  from  the  competent  authority  to  other
entities will lapse after eight years. 

Amendment  68,  modifying  Article  22  (2),  clarifies  the  cooperation  that  is  expected  in  the
context of transfer of the approval of a prospectus from one competent  authority to another.
When  deciding  suspension  or  prohibition  of  trading  on  a  regulated  market,  competent
authorities may first consult operators of the regulated markets.

3.2. Amendments or parts of amendments not accepted by the Commission

None

4. Conclusion 

In  accordance  with  Article 250(2)  of  the  Treaty,  the  Commission  amends  its  proposal
accordingly. 

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