CELEX: 51975PC0686
Language: en
Date: 1975-12-23
Title: Proposal for a Directive coordinating the conditions for the admission of securities to official stock exchange quotation (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
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DOCUMENTS "COM"
COM (75) 686
Vol. 1975/0253
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                         COM(75)686 final.
                                         Brussels , 23 December 1975
                           Proposal for a Directive
        coordinating the conditions for the admission of securities
                      to official stock exchange quotation
                 ( submitted to the Council by the Commission )
    COM(75 ) 686 final
 ---pagebreak---                                  COÎTTEÎTTS
EXPLAI '/.TOITC PgHOn/u IUM
  I. Introduction
 II . Coordination : the alternatives
III . Scope of the coordination
 IV . Field of application
      A. Official quotation
      B. Securities affected
  V. General principles underling the
      approach adopted
      A. Conditions for admission
      B. Methods of control and powers of the
           competent authorities
 VI . Cooperation betvreen Member States and the
      creation of a Context Committee
PROPOSAL FOR A COUNCIL DIRECTIVE
Introduction
Sections :
  I. General provisions and field of epplica/tion
      ( articles 1-8 )
 II . Methods of control EJid powers of the competent
      authorities ( reticles S-17 )
III . Methods of publishing the information to be made
      available to the public ( article 18 )
 ---pagebreak---   iv • Procedures for cooperation between Member States
          (article 19 )
   "î r                                             '  '
     «' •
   V. Contact Committee ( article 20-22 )
  VI . Final provisions (articles 23,-24 )
SCHEDULE! A (Annex I )
          Conditions for the admission of shares to
          official quotation on stock exchanges of
          Member States of the European Communities
SCHEDULE B (Annex II )
          Conditions for the admission of debt securities
          to official quotation on stock exchanges of
          Member States of the European Communities
SCHEDULE C (Annex III )
          Obligations of companies whose shares are admitted
          to official quotation on a stock exchange of a
          Member State of the European Communities
SCHEDULE D (Annex IV )                                       '
          Obligations of issuers whose debt securities
          are admitted to official quotation on a stock
          exchange of a Member State of the European Communities
 ---pagebreak---                                 Proposal for a directive
              coordinating the conditions for the admission of securities
                         to official stock exchange quotation
                                  Explanatory memorandum
  I. Introduction
  1.            On 5 October 1972 , the Commission laid "before the Council a proposal
  for a directive concerning the prospectus to "be published when securities
  are admitted to official stock exchange quotation ( l ). The aim of this
  proposal is to coordinate national provisions relating to the content ,
  checking and distribution of the prospectus to be published when securities
        *                                                                         '
  are admitted to official stock exchange quotation in a Member State . Thus , :
  its principal objective is to harmonize and improve public information on
  the characteristics of securities admitted to quotation and on the assets ,
  financial situation and business performance of their issuers .
                The proposal , which ensures effective protection of investors and
  also facilitates the admission of securities to 'official' quotation on
  stock exchanges situated in 'the various Member States , is part . of the
  work undertaken with, a View "to the establishment 'of a European , capital       •
  market .
                                                                                      • *'
                                       i
          ».          .*        '
  2.         '' The introduction of a Community prospectus would not , . however,
  of itself lead to the creation of a European capital market . There are
, other obstacles to the interpenetration of securities markets , . notably
  the present differences between the llember States as regards the ..
  conditions for the admission of securities to quotation .
  ( l ) OJ ITo C 131 , 13 December 1972 . On 8 December 1975» the Commission
         presented to the Council an ajnended proposal for a directive .
 ---pagebreak---          These difierences between the conditions for admission have ,
firstly, the effect of making it easier to obtain access to certain
markets than to others . As a result securities admitted to official
quotation in one Member State may be refused admission to quotation in
another Member State because they do not fulfil the stricter requirements
imposed there .
         Secondly , the differences have the effect of imposing an extra
burden on issuers applying for quotation of their securities on stock
exchanges situated in different Member States , since, they must provide
differing supporting evidence according to the Member States concerned.
         This situation may entail the same disadvantages as those resulting
from differing requirements on the content of the prospectus to be
published on admission to quotation, since it may influence the issuer 's
choice of the stock exchange on which he requests quotation of his ...
securities and since in many cases it impedes the quotation of one and ;
the same security on several stock exchanges situated in different Member
States .
         The Case for the coordination of conditions for admission to >       >
quotation is the same as that for the introduction of a Community prospectus
Indeed, it is an-essential complement to the prospectus . ?•           . .. .   ,
3.       The objective in coordinating the conditions for admission to
quotation is to save ; issuers requesting the quotation of their securities ^
on several Community stock exchanges from having to comply with widely ■
varying requirements by establishing a catalogue of conditions and
obligations applicable in all the Member States .                   .
 ---pagebreak---                                      - 3 -
        This coordination measure is , then, designed to facilitate the
introduction of securities to official stock exchange quotation' situated
in the various Member States and contribute thereby to the setting up
of a European securities market - It is - aldcdoEigmrfl to^prcnoteuecrulviitenoe' of
status and substance for officially quoted securities on stock exchanges
in , Member Sta,tes and ensure effective protection of investors .
                            1 '                      '
II . Coordination ? the alternatives
1.      In the course of preparatory uork on the drawing up of the proposal ,
three approaches to coordination were examined .
        The first consisted in the establishment of two lists of conditions
for admission to quptation , one of these lists containing the conditions
which must be applied in all Member States and the other enumerating the :
fields in which the Member States would remain free to lay down special
rules for admission, it being understood that no Member State could
impose conditions other than those included on the two lists .
        The second solution envisaged provided for both a list of conditions
which all Member States must apply and a list of conditions which they
could not impose . The Member States would therefore be free to impose
other conditions in addition to those included in the first list , provided
that they were not included in the list of prohibitions contained ih
the second list .
        The third solution consisted in the establishment of a "hard core "
list of conditions which are fundamental in that they would be applied
in all circumstances in all the Member States , though the Member " States
would retain the right , on the one hand, to make the conditions on this
list more rigorous and,, on the other hand, to lay down conditions
additional to those contained in the list .
 ---pagebreak--- 2.       The firs-fc solution was discarded because it was found that there
were serious obstacles to its introduction, since it would entail the
establishment of two exhaustive liets of conditions for admission
and would therefore require a census of all the situations with which
the Member States could be faced when official quotation applications •
are filed, Moreover^ this solution would call for periodic adaptations ^
of the Community regulations in the future to cover the changing nature
of the subject . Finally, . enumeration of the fields left open to- free
assessment by' the Member States would, owing to the divergences existing
in stock exchange practices in these countries , have resulted in a very
long list vrhich would have weighed down the . coordination process ,.
          For similar reasons , the second solution was also rejected.
Just as in the first solution it was found to- be practically impossible . "
to list all the conditions of admission, so in the second it seemed
impossible to identify all the prohibitions . Moreover, the existence
of a list of prohibitions implies that anything not specifally prohibited -/
is authorized . To be acceptable , a list of prohibitions would therefore' ,
have to be complete , which would seem' impossible to achieve .
          It weis " there fore the third solution whidh was finally adopted.
This solution , althou^i it cannot yield full coordination, constitutes
none the less a first step towards subsequent closer alignment of national
requirements governing conditions of admission to quotation* The experience
gained in applying, in the various Member States, the minimum rules for .
admission provided for in the directive should considerably - facilitate
the implementation of more extensive coordination during the second phase
of harmonization . This proposal for a directive therefore represents
only a first stage in a wider harmonization process .
 ---pagebreak---                                        - 5 -
III . Scor>e of the coordination
            The question arose whether, in addition to the coordination
of basic conditions for the admission of securities to quotation, relevant
procedural formalities should also "be coordinated. The main points are
what supporting documents should be produced showing that the substantive
requirements have been met , their presentation or appearance, requirements
as to certification, the choice of languages to be used in the documents ,
etc . There is no doubt that such coordination would be useful , since it
would mean that issuers seeking quotation on stock exchanges in several
Ileraber States would not have to cope with formalities varying unduly widely
from one Member State to another .
            However , apart from the rules already laid down for the prospectus
to be issued on admission to quotation, it was not thought necessary to
attempt coordination of these details at the present stage of work, since
procedural differences do not constitute a serious obstacle to the inter­
penetration of stock markets and since it seems that their coordination       *
cannot be usefully undertaken until the basic conditions , from which formal
procedures often derive , are coordinated more closely .
            It is therefore during the second phase of harmonization that
ways and means should be considered of coordinating the requirements of
the Member States on procedural foimalities relating to the admission of ,
securities to quotation.
IV . Field of application
     A. Official quotation                                              >
            As in the case of the prospectus to be issued on admission to
quotation, the Community standard on conditions for admission to quotation
should apply in respect of admission to official quotation on a stock
exchange of a Member State, regardless of whether it is a main or regional
 ---pagebreak---                                                            \
                                     - 6 -
stock exchange . This standard, however , does not apply to parallel markets ,
whether or not subject to regulation, since the diversity of situations
existing here in the various Member States constitutes a major obstacle
to the extension of the standard to these markets ,
   •    Securities affected
1,         The Community rules will normally apply to any admission to
quotation in a Member State of securities issued by the private or the public
sector, national or foreign.
           It follows that , in contrast with the proposed directive concerning
the prospectus for admission to quotation, the field of application of the
Community standard covers debt securities issued by governments and by
regional and local authorities .       .
           However, bearing in mind that , on. the one hand, in most Member
States admission to .the national stock exchange of government debt securities
is automatic , and, secondly, that the regulations governing the admission
to a national stock exchange of debt securities issued by regional or local
authorities differ widely from one Member State to another, it seemed hardly
feasible at the present stage of work to lay down coordinated minimum
conditions for admission to quotation on a national stock exchange for such
issues . Therefore , conditions have been laid down only for debt securities
issued by foreign governments , whether they are governments of Member States
of the European Communities or not , and their regional or local authorities .
2.         It should further be noted that the Community standard will also
                                                                          * .
apply to debt securities issued by public international organizations . '
 ---pagebreak--- 3.      . Lastly, it was felt that the time is not ripe to extend the field
of application of the proposal for a directive to securities issued by
open-end collective investment undertakings , whether investment companies
or unit trusts . Such coordination would be very difficult to achieve since
the background against which these organizations operate varies a great deal
from one Kember State to another . These securities also fall outside the
scope of the proposal for a directive on the prospectus for admission
to quotation . It would therefore seem advisable to wait until 1:0 rk is complete
on the coordination of legislation governing such . organizations, and also
until a sales prospectus for these securities , which might also serve as a
prospectus for admission to quotation, is ready , before attempting to
coordinate "the conditions for admission- to quotation of their ; securities *  ;
V. General principles underlying the approach adopted
   A. Conditions for admission
1.         . The .Member States must Sake the admission or introduction of
securities to official quotation on a stock exchange situated within
their territory subject to the conditions listed in the Schedules annexed
to the proposal , for a .directive .
             So as to simplify their presentation, the conditions have been
divided into the follovang. two categories :
(a) firstly, the conditions which issuers and their securities must fulfil
    before admission to official quotation is granted. These conditions . ,
    are . listed in Schedule A for the admission . of shares and in. Schedule E
    for the admission of debt securities }
 ---pagebreak---                                           - 3 -
(b ) secondly, the conditions or obligations to which, the issuer is subject
     as' long as his shares qualify for quotation; defending on the Member
     State , such obligations may derive either from legal rules or from
     undertakings entered into by the issuer at the time of admission to
     official quotation of his securities . These conditions are listed
     in Schedules C and D, for shares and debt securities respectively .
               These conditions, as a whole , have two immediate objectives,
namely :
(a) the protection of saving by ensuring the soundness of the issuer and
     the proper information of the investor?
(b ). the regular operation of the market by ensuring in particular that
     securities admitted to offioial quotation are freely negotiable and
     not unduly concentrated.
                                 «■ » -j*. ' • . .- J • »  «   . ^ •    •-»»-
               However, there are some conditions and obligations for
which the proposal for a directive simply establishes the principle and
which will subsequently need more detailed treatment at Community level .
This is the case , for e::ample , for the obligation to provide continuing'
information stipulated in Schedules C and D for issuers whose shares or
debt securities are admitted to official quotation . The directive establishes
only the principle of such compulsory information . In view of the complexity
of the matter, the coordination of information which has to be periodically
made available to the public, in addition to the information provided
for in the proposal for a fourth directive on the annual accounts of
joint stock companies* will be dealt with in future work and in*a separate
proposal for a directive* Pending this directive , the practical application
of the principle of continuing information remains within the jurisdiction
of each Member State .
Zt            As already indicated above , the conditions provided for in this
proposal for a directive are minimum conditions . In other words , the
Member States may make the admission of securities to . official quotation
 ---pagebreak--- dependent on more rigorous conditions or on additional conditions , subject ,
however, to the following two restrictions .
          ■* Firstly, any more rigorous or additional conditions applied "by
a Member State for the admission of securities to official quotation on
'a stock exchange situated within its territory must "be of general
application and must have been publicly brought into force prior to the
request for admission to which they relate .
             Secondly, the proposal for a directive together with Schedules '
A and B prohibits Member States from imposing certain more- restrictive
or additional conditions . The purpose of this rule is to avoid one of
the objectives of the directive , namely the interpenetration of securities
markets, being jeopardized by measures taken by one or another Member
State on a purely national level . Thus , Article 6 of the proposal stipulate
that the Member States may not , as a condition for admission, require
securities to be quoted in another Member State , wether the country of
origin or not . Similarly , pursuant to Schedules A and B , the Member States
may not impose the following conditions :           . ,
 (a) require a foreseeable market capitalization of more than one million
      units of account where no regulated parallel market exists;
 (b ) prohibit the distribution of securities to the public through
      the stock exchangej              .                              ■ .• , - -
 ---pagebreak--- ( c ) require the physical shape, substance or appearance of securities
       issued .in other Member States to- .conform to national standards *
3»            The^ proposal for a directive provides that the Member States shall
waive application of certain conditions or obligations where debt securities
to be admitted are issued "by ;            ..   «»
( a) public todies of a Member State which enjoy a State monopoly for
       their operations , such as the post office , railways, broadcasting
       corporations , etc. s
(T>) : financial institutions of a Member State which' issue debt securities '
       on tap or as repeat issues and subject to a public 'statute or to -
       publio supervision".                    .. . -  * •       ■
           .•  Similarly, the Member States may decide not to apply certain
Conditions for "fcAe 'admission tff debt securities - issued "by undertakings
which are from a Member State and whose ' borrowings and interest payments
are fully, unconditionally and irrevocably guaranteed by a Member State.
               Less stringent arrangements for these bodies or undertakings
are justified by the fact that they themselves provide additional
guarantees as compared with the other undertakings, being either subject
to public supervision or guaranteed by a Member State . ~
i
          Methods of control and powers of the competent authorities
1*             For the purpose of applying the directive , the Member States
must designate one or more competent authorities to decide on the
admission of securities to official quotation on a stock exchange situated
within their territory. These authorities may be either public or private .
If thei decision regarding admission depends' oil several astufcoi'iiaas , the
respeotiv© functions of each - "of - these authorities must be defined precisely„
 ---pagebreak---                                    - 11
         The competent authorities cannot admit a security to official
quotation until all the conditions provided for by the directive
are met . Before authorizing admissiont they must therefore ensure that
the conditions are complied with . For this purpose , the Member States : < , ■
must invest them v/ith all the authority and all the powers of control
necessary to carry out this task. In particular , they must be empowered
to require from an issuer all the information and all the documents whioh
they judge necessary in order to decide on a request for admission,
including audit reports and other sworn statements . Similarly, the
competent authorities must have the authority necessary to check tjiat
an issuer fulfils the conditions required to qualify for the exemptions
provided for in Article 8 of the directive .                            •       <
2»       In the event of the rejection of an application for admission,
the competent authorities must give reasons for this decision to the
applicant .       ;                       '
         However, the Member States may empower the competent authorities         ;
to turn down an application for admission without giving reasons for the ■
rejection to the applicant . Such powers may be used only for the purpose
of protecting the inventor.
         Similarly,' the Member States may authorize the competent authorities
to make an application for admission subject to any special conditions ;
which they consider appropriate in order to ensure the protection of the
investor and of which the applicant has been explicitly informed,
                                                                            i .
         This is in fact a discretionary power, which in certain conditions
                                                      *     • >  •- V     f
enables the competent authorities who have received an application to
refuse it or make stipulations invoking criteria other than those defined
 ---pagebreak--- . beforehand by the Member State concerned. This type of discretionary
  power exists in all Member States. In - the interest of the investor .
  and of the smooth operation of the market , there is a case for retaining
  it | at least for the time being, because it enables situations to be
  dealt vith of a kind that are difficult to foresee and consequently
  scarcely susceptible of prior regulation. Moreover, the competent
                                    > «
  authorities must inform the contact group.- set up by the directive of any
  decision to turn down an application for admission taken against
  securities issued in a Member State , giving reasons , and this rule should
  Btrongly curtail any possible dangers of abuse of powers in this field.
  3.        Apart from the powers necessary for decisions on admission to
  official quotation, the directive confers certain other powers on the
  authorities of the Member States .
            Thus , the competent authorities must inform the public , complying
  tiith appropriate warning procedures , where the issuer is not respecting
  the obligations incumbent upon him 0.3 a rooult * of tho adniscion of his
  securities to official quotation .
            Similarly, the comp$tefet authorities must request from issuers
  of quoted securities all the , information which they consider necessary
  to ensure the protection of the investor or the smooth operation of
  the market .
            Finally , the competent authorities may suspend quotation if
  this is required for the regular operation of the market or is in the
  public interest . In certain circumstances, they may- even discontinue
  quotation , altogether.
 ---pagebreak---                                     - 13 –
        In trie ' interests of the public protection of the investor,
it has also been felt desirable that the Member States should
authorize the competent* authorities to establish official quotation
of securities even though no application has been made . This power
may be e::ercieed where there is in fact a market in the relevant
security and where the major interest of present or future shareholders
requires that transactions relating to these securities should be
subject to the disciplines and. controls associated with official
quotation .
VI . Cooperation betreen Member States and the creation of a Contact
     Committee
         As with the prospectus for admission to quotation, it was
judged desirable , with a view to facilitating the interpenetration of
national securities markets , and promoting harmonized application of the
directive , to make collaboration between the Member States compulsory
in certain cases and to set up a Contact Committee , composed of
representatives of the Member States and of the Commission . Clearly
defined powers are conferred on the Contact Committee , these powers
being, however, in one particular case wider than those of the Contact
Gr®up provided for by the proposal for a directive on the prospectus
for admission to quotation; the Contact Committee will act as a regulating
committee in adjusting, in the light of the economic situation, the
minimum market capitalization provided for in the first paragraph
of Schedule A, point I 2 . The procedure provided for the alteration
of this amount should allow the amount to be adjusted fairly quickly .
 ---pagebreak---                                Proposal for a directive
         .coordinating the conditions for the admission of securities
                    ... to official stock exchange quotation
             THE COUNCIL OF THE EUR0FEA1J COMMUNITIES ,
           '   <' "                                                         ?
             Having regard to the Treaty establishing the European' Economic •
Community and, In particular Article .- 54 (3 ) ( g)»        • .    ! •» •
             Having regard to the Proposal from the Commission ^
             Having regard to the Opinion of the European Parliament ;
 ,   ^  _ Having regard to the Opinion of the Economic and: Social Committee }
             Whereas the Six^h Council Directive Ho *.*» of •«.». 'ori the-
coordination of the safeguards required in the Member States td protect
the interests both of members and of third parties concerning' the content ,
checking and . distribution of the prospectus to be published vhen securities
issued by companies within the meaning of the second paragraph of Article 58
of the Treaty are admitted to official stock exchange quotation, and tfie
Counpil Recommendation, of the same date , have as their object the alignment
of the safeguards provided for the protection of the interests of investors ;
wherpas they, are also designed to . facilitate the admission of' securities
from the same issuer to official quotation on several stock exchanges
situated in the various Member States , and whereas , therefore, they
contribute towards the establishment of a European capital market ; '
               Whereas the coordination of the conditions for the admirsion cr
introduction of securities to the same official quotation on stock exchanges
has the same objectives and therefore follows logically the introduction
of a Community prospectus for admission to quotation;
 ---pagebreak---           Whereas the coordination is such as to make equivalent the ' '
protection of investors at Community level , by virtue of the more uniform
safeguards which it will provide for them in each Member State ; whereas
it will facilitate the admission to official quotation of securities
originating in other Member States and the .quotation of the same security
on several stock exchanges in the Community; whereas consequently it will ,
allow greater interpenetration of national securities markets:
                         • •»
          whereas during the initial stage the coordination should be :
sufficiently flexible to take account of the current divergences between
the structures of securities markets in the Member States; : whereas such .
flexibility is ,, moreover , necessary to enable the Member States to take
account of the particular situations with which they would be confronted;
          Whereas for these reasons harmonization should be limited in
this first stage to the establishment df minimum conditions for the admission
of securities to official quotation on stock exchanges of Member States }
          Whereas although this proposal therefore does not provide for ,
full coordination of the conditions for admission to quotation, it never­
theless constitutes a.' first stfcp towards subsequent closer alignment
of the regulationsoof the- Member .States in this field}
          HAS ADOPTED THIS DIESCTIVE ;
 ---pagebreak--- Section Ij General provisions and field of ar>plication
                     The Member States shall make the admission or introduction of
securities to official quotation on a stock exchange situated viithiri
theii? territory subject tQ-iUe^toroyigions of Articles 3 to 19 inclusive
of this directive .                             ^         K.­
         •'          "           ■ • '*';4V-.V'  V   ^'  »    •
Article 2                      '                                          .
  * •' .             For the purposes of this directive : >
           »
(a) "open-end collective investment undertakings" shall mean investment
          companies and unit trusts whose securities are or have boon issued -
          continuously or in closely spaced blocks and/or are at the requeist
          of the holderB repurchased, or redeemed, directly or indirectly, from
          the assets of these undertakings! ' ,                   .
(b ) ''closed investment companies" shall mean investment companion other,
          than those referred to in (a) abovej
(c ) 'iunit of account" shall mean the unit of account as defined by the
          decision of the Commission of 18 December 1975 (l)*
Article 3
1,                   Securities issued by open-end collective investment under­
takings shall not fall within the scope of thi3 directive .,            , .
                                                   r
         1 r ■" 11 1  1
          o.J . •»••••
 ---pagebreak---                                         - 4-
2.          This directive shall also not relate to the admission of securities
issued by a Member State or its regional and local authorities to
official quotation on a stock exchange situated within the territory
of that Member State .                                                       .  .
Article 4
1.          The admission of securities to official stock exchange quotation
shall be subject to the conditions listed in Schedules A and B, annezjed
to this directive , which relate to shares and debt securities respectively .
2.          The issuers . of a security admitted, to . official quotation shall
observe the obligations listed in Schedules C and D , annexed to this
directive , which relate to shares and debt securities respectively .
3.          Certificates representing shares may be admitted only if the
issuer of the shares represented fulfils the conditions provided for
in Schedule A, points 1.1 to 1.3 and if the certificates representing -
the shares fulfil the conditions provided for in Schedule A, points II . 1
tc II . 6 .
4.          The issuers of certificates representing shares admitted to
official quotation shall ensure that the obligations provided for in
Schedule C , points 2 to 3 » axe observed and provide , on the shares
represented and their issuer, all the information required by Schedule C ,
points 3 to 6 .
1.          Subject to the prohibition provided for in Article 6 and those
provided for in Schedules A and B, the Member States may make the
admission of securities to official quotation subject to more rigorous
conditions than those listed in Schedules A and B or to additional
 ---pagebreak---    conditions , provided that they are of general application and that
   they have teen publically "brought into force prior to the request for
   admission to official quotation to which they relate#                 -
   2.             The Member States may, within the same limits as those provided
   for in paragraph 1 above , make the issuers of a security admitted to
   official quotation subject . to more rigorous obligations than those listed
   in Schedules C and D or to additional obligations .                     "        \
     "     _ • * 1  . • , ..   ... ..   ' * '' '    > - '     ■  .                »
   Article 6
                  The Member States shall not make the admission to official
   quotation of securities subject to the condition that these securities
   be admitted to official stock exchange quotation in a Member State .
   Article 7
       .  1                  ■        .                   '            '
                  Where !a Member State applies- one of the , optional derogations
   provided for 'in Schedules A and B to the conditions for admission to
   official quotation listed there , this application shall be general * ->
   Article 8
   1*    .       .The Member Stat® shall waive application of the . conditions
   provided for in Schedule B,' Section A.I ( legal position of the under­
   taking - capacity of the undertaking to meet its commitments ) where a
,- requept for admission to official quotation- is made for debt securities
   issued byr
 ---pagebreak---  (a) public bodies of a Member State which enjoy a State monopoly
      in the exercise of their activi-tiesj * .■« ' f > ■■■                                         ...
                             ''''V- t ■' - V;-: •'                Z        - : •;           v • • * . . •:
(b) financial institutions of a Member State which issue on tap
                                                  *  •       •   - V.            •    - ,                      .* ». .• •
      or as repeat issues debt securities admitted to official quotation,
  - . on condition that .these financial institutions are subject to . a
      public statute . or to- public supervision ensuring the protection . .
     -of ; the investor#. .               . .... ,... .
2. ^         ,The Member- States may -waive application of the obligation
prpvided for under. Schedule D,. point A. 3. ( continuing information)
vrhere an application for admission to official, quotation is made for
debt securities issued by the bodies or institutions referred to in
paragraph 1 above .                  .. .            ,.
3.            Tlie Member States may waive application of the conditions
provided for under Schedule B, Section A.I (legal position of the
oompany - capacity to meet its commitments ) and of the obligations
provided for under Schedule D, points A. 2, A. 3 and A-.4 (alteration of
thq memorandum or articles of 'association - Continuing, information <-
additional information) where an application for admission to official
quotation is made for debt securities issued by undertakings which are
from a Member State and whose borrowings and interest payments are fp.lly,
unconditionally and irrevocably guaranteed by a Member State . ■
4,.          Where a Member . State applies one of the optional derogations
prpvided for in paragraphs 2 and 3 above, this application shall be
general .                                                                                 " cfeh.' '
Section II: Methods of control and ffoyjrei^s of the competent authorities.
                    '    ■■■    ■■ . ■*       ' * U" ■■ v ^ ..            v.       '■             ■     x- - '
1.            The Member States' shall desiaaate the competent" national authority
                                                                      I "
or authorities to decide on the admission of securities to official quotation
on a stock exchange situated within their territory. They shall inform the
Commission accordingly! indicating, if appropriate , how the powers have
been allocated .                                        >'     ■
 ---pagebreak---                                         - 7  -
 2.          The competent authorities may admit a security to official
quotation only vrhere they axe satisfied that at least all .the requirements
 imposed "by this directive are complied with ,         ' .
3.           The competent authorities shall be invested with all the authority
ar.d all the powers of verification necessary for their work. They shall
have in particular the authority to require the issuer for whose securities
admission to official quotation is sought , to furnish any information
and produce any documents and certificates which they consider necessary
 in order to decide on this application . For the same purpose , they shall, also
"be empowered to require any audits or inspections which .they , consider
appropriate . They must also have authority to check that an issuer meets the
 conditions provided for in Article 8 of this directive with a view to
 obtaining the exemptions provided for in that Article . ...
Article 10                                                             ••
 1.          In . the event of the rejection of an application for admission of
 a security to official quotation, the competent authorities shall give
 explicit reasons for this decision to the applicant .
 2.          Each Member State shall provide for a right of appeal to the courts
 against a deoision to refuse an application.
Article 11
             Notwithstanding Articles 5        10 respectively , the Member States
may invest the competent authorities with powers , to be invoked only for
 *;he purpose of protecting the irivestorj
   (a) ■n make an application for the admission of a security to official
       T110'ation subject to any special condition which they consider appropriate
       and o? which the applicant has been explicitly informed;
 ---pagebreak---                                         - 8 -
   (b ) to reject an application for the admission of a security to official
        quotation without giving explicit reasons for the rejection to the
        applicant .
  Article 12
              The competent authorities may not admit to official quotation
  a security already officially quoted in another Member State , where the
  issuer is failing to comply \<rith the obligations resulting from admission
  in that other Member State .
              The competent authorities shall inform the public " where an issuer
  of officially quoted securities is failing to comply with the obligations
  resulting from admission.
  1.          fee competent authorities shall request an issuer whose securities
  are admitted to official quotation to provide them without delay with all
  the information which they consider appropriate in order to protect the •
  investor and ensure the smooth operation of the market . The issuer shall be
  required to provide this information to the competent authorities .
  2. ;      ' In the case referred to in paragraph 1 above and, more generally,
                                                         r   4
  where the competent authorities consider that particular circumstances
  resulting from the situation or operations of the issuer or from . the
                 .1
. dealings in his officially quoted securities require certain information to
  be passed on to the public , they shall invite the issuer to pv.blish this
  information in the form and within the time-limits which they consider
  appropriate and, if necessary , shall act in place of the issuer so as to
  ensure such publication under conditions of professional secrecy .
 ---pagebreak---                                         9 -
Article 15
1.      . . The competent authorities may suspend a quotation, where the
smooth operation of the market is or may "become temporarily jeopardized,
or where such suspension is in the interest of the investor .
2.          The competent authorities may discontinue a quotation altogether,
where they are convinced that , because of particular circumstances ,
normal and regular dealings in the relevant security are not possible .
Article 16
            The competent authorities may, in exceptional cases , establish
official quotation of a security trithout application where there is: in fact
a market in the security, if it is in the interest of the investor to make
the relevant dealings subject to the disciplines and controls of official
quotation .
Article 17                                                               .•/.* -1
      , . Where application for admission relates to certificates, representing
shares , the application shall be considered only if the competent . authorities
take the .view that the issuer of these certificates provides proper safe­
guards for the protection of the investor .
Section III :    Methods of publishing the information to be made available
                 to the .public                           « .
Article 18
1.          The information which issuers of a security admitted to official
quotation on a stock exchange . situated within a Member State are required
to make available to - the public in accordance with the provisions of
 ---pagebreak---                                          - 10 -
Schedules C and D shall be published in one or more newspapers distributed
throughout the country or shall be made available to the public in the
form of notices to be displayed in places indicated by announcements
to be published in one or more newspapers distributed throughout the
oountry .
2.        The information referred to in paragraph 1 above shall be published
in the language or languages of the Member State in which this information
must be made public .
Section IV :       procedures for cooperation betvreen Member States
Article 19                             ;
1.        V*here official quotation of a security is applied for simultaneously
in respect of several stock exchanges situated in different Member States ,
the competent authorities of the Member States concerned shall establish
between themselves all the contacts necessary to ensure maximum coordination
of the conditions and formalities required for the admission of the security
concerned .
           9                                                          ' '
2.        In the event of an application being made for the admission to
official quotation on a stock exchange situated within a Member State of
a security admitted to official quotation in another Member State , the
competent authorities of the Member State where the request is made shall
contact the competent authorities of the Member State in which the security
is already quoted, with the aims , in particular* of simplifying as far as
possible the conditions and formalities required for the admission of
the security concerned and of ensuring that the issuer carries out the
obligations incumbent upon him by virtue of the admission of that security
to official: quotation.            ...
              if :
3.          In the event of admission to official quotation on a stock exchange
situated within a Member State being sought for a security for which admission
to official quotation on a stock exchange situated within another Member State
lias been refused, the competent authorities of the Member State in which the ,
application has been made shall ask the competent authorities in the other
Member State to give the reasons for this refusal . The competent authorities
questioned shall communicate these reasons without delayj the reasons shall be -■
communicated in such a way as to comply with the requirements of professional
secrecy .
 ---pagebreak---                   Where official quotation of a security is applied for simultaneously
in respect of several stock exchanges situated in different Member States ,
any competent authority^. intending to refuse the application shall
without delay inform the competent authorities of the other Member States
concerned of this intention and of the reasons for it } the reasons shall
be communicated in such a way as to comply with the requirements of
professional secrecy .
4                 In order to allow the competent authorities to exercise the powers
y tovided for in this Article , any applicant for the admission of a
i ecurity to official quotation on a stock exchange situated within a
     .ember State must state whether a similar application is being or has
    jlready been made in another Member State .
   Ï
Bection Vî              Contact Committee
■ ■      ■ ■ " ny " 1 11         ■ ■  »
î;
Article 20
1.                A Contact Committee shall be set up attaohed to the Commission .
Its function shall be :
  ( a ) to facilitate^ without prejudice to the provisions of Articles 169 and
            170 of the EEC Treaty, harmonized application of the directive through
       .    regular meetings dealing in particular with practical problems
            arising}
     *b ) to facilitate the establishment of a concerted attitude between the
            Member States on the more rigorous or additional conditions and .
            obligations which they may require pursuant to Article 5 of this
            directive and on the information received by the Commission pursuant
            to Article 22 }
      c ) to advise , if necessary, the Commission on the supplements , amendments
            or adjustments to be made to the directive pursuant to Article 21 .
 ---pagebreak---  2.       The Contact Committee shall "be composed of representatives of
 the Member States and. representatives of the Commission . The Chairman
 shall be a representative of the Commission . The Commission 's services
 shall provide the Secretariat .
 3.      The Committee shall be convened by the Chairman, either on his own
 initiative or at the request of one of the members .
Article 21                                                        ■ . •' •
•1 .     For the purpose of adjusting, in the light of the requirements of
 the economic situation, the minimum market capitalization provided for in
 the first paragraph of Schedule A , point I , 2 , the representative . of the
 Commission shall submit to the Committee proposals for the measures to be
 taken. The Committee shall deliver its opinion within the period laid down
 by the Chairman . Its decisions shall require forty-three votes in favour,
 the votes of the Member States being weighted as provided for in Article 14
 of the Act concerning the Conditions of Accession and the Adjustments
 to the Treaties .
 2. v   ( a) The Commission shall adopt the measures envisaged where these
 are in accordance with the opinion of the Committee .
        (b ) Where the measures envisaged are not in accordance with the
 opinion of the Committee or where the Committee has not delivered an
 opinion, the Commission shall without delay lay before the Council a
 proposal concerning the measures to be taken. The Council &all act by a
 qualified majority .
        (c ) Uhere the Council fails to act within three months of receipt
 of a proposal , the measures proposed shall be adopted by the Commission.
 Article 22
 1.     The competent authorities shall be required to inform the Commission
 of any decision, together with the reasons , to refuse an application for
 admission to official quotation on a stock exchange situated within their
 territory of a security issued within another Member State .
 ---pagebreak---                                      - 13 -
2.      The Commission shall inform the Contact Committee of this refusal ,
The deliberations of the Committee on the matter shall be covered by the
obligation of professional secrecy .
Section VI : Final provisions
                                                                /
Article 23
1.      Within twelve months of notification to them of this directive ,
the Member States shall put into effect all measures necessary for
complying with its provisions and shall inform the Commission immediately
of such measures *           -                              -
2.      The Member States shall communicate to the Commission the texts
of the essential provisions of national law vrhich they adopt in the areas
covered by this directive .
Article 24
        This Directive is addressed to the Member States .
        For the Council
        The President
 ---pagebreak---                                        - '14 -                   ΑΠΊ2Χ I
                                     SCHEDULE A
              COITDITIOI'rS FOR THE ADIilSSIOIT OF SHAPES TO OFFICIAL
                             OF THE BUEOFEAII CQMTIUITITIES
I. Conditions relating to companies for whose shares Quotation is sought
    1 . Leral position of the company .
             The legal position of the company must be in conformity with the
lav;s and regulations to which it is subject , aS regards "both its formation
and its operation under the memorandum and articles of association,-.
             Proof that this condition is fulfilled need not "be provided
where securities of the company are already officially quoted on the same
stock exchange .                        , . .
    2 . Minimum capital of company
             Hie foreseeable market capitalisation of the shares for "hich
admission is sought , or, if it is impossible to establish this amount , the
net assets of the company must be at least one million units of account *
             Member States may, however, by way of derogation from the first
paragraph, provide that shares may be admitted to official quotation , ■
even v:hen the condition laid down in that paragraph is not fulfilled, ,
provided that the competent authorities have ascertained that there          .
will be an adequate market for these shares .
 ---pagebreak---                                       *• 15 -
           A higher expected market capitalisation or higher net assets
may be required "by a Member State for admission to; official quotation
only if another regulated,- recognized and open market exists in this State
which operates normally and has less stringent requirements in this
matter than those referred to in the first paragraph*
           The condition " laid down in the first paragraph is not applicable
in the case of the admission to official quotation of -a further block of c
shares of the same class as those already admitted.- •
       ...     ,                                 '•    >.  ■:  , .           ';'
    3 « The company *^ profit-making capacity
           The   company must give proof of its profit-making capacity for
the previous     tvio closed financial years and provide satisfactory evidence
that it will     maintain a profit-making capacity for the current financial
year and the     following financial year#
           In the event of the conversion, merger, splitting up . or re- :
organization of companies , the profit-making capacity as defined in the
first paragraph is assessed in the light of the situation of the company
or companies involved in these transactions and/ or the situation of the
compajiy or companies resulting from the transactions .
           Member States may, however, notwithstanding the first paragraph,
provide that shares issued by a company may be admitted to official
quotation even when the conditions laid down in that paragraph are not
fulfilled *
                                      '  /. >' •
(a) where the company has not yet ■ made up accounts for two financial
      years but is able to provide satisfactory evidence that it will have
      a profit-making capacity for the current financial year and the
      following financial yearj
(b) where the company, because of the nature of its activities, will not have
    . a profit-making capacity until the more distant future, but is able to
      provide satisfactory evidence th'bt it will realize this profit-making
      potential}                            ' ,
(c ) in the case of a closed investment company.
 ---pagebreak---                                      - 16  -                      \
            The exceptions provided, for at ( a ) and (is ) above may not be
allowed toy Member States , in which another regulated, recognized and open
market exists -which operates "normally and whose requirements as regards
profit-making capacity do not prevent the shares in question being
admitted to this market f this does not apply if the company shotrs that
it cannot raise its capital other than by having its shares admitted
to official quotation and that it is in the public interest that the
capital be raised .                                             '
            The conditions laid down in the first paragraph are not applicable
in the case of the admission to official quotation of a further block of
shares of the same class as those already admitted .
II , Conditions relating to the shares for which quotation is sought
          Legal position of the shares
            The legal position of the shares must be in conformity with the
laws and regulations to which they are subject .
      2 . negotiability of the shares
            The shares must be freely negotiable .
          , Member States may treat as freely negotiable shares , shares which
are not fully paid up, if arrangements have been made to ensure that
negotiability of these shares is n<>t hampered and dealing is made
transparent by providing the public , with, all appropriate information .
            For shares which may be acquired only subject to approval * Member
States may, by way of derogation from the first paragraph, admit them
to . official quotation only if the use of the approval clause does not
interfere with dealing .
 ---pagebreak---     I
      3 « Publie issue precedinc: admission
                In t*ie pas© of public iasue . preceding admission to pfficial - .
 quot^tipri, "the first' quotation may be made -only . after the closure of . ^
 th<? period during v;hich application for subscription may be submitted . , , ,
      4* distribution of shares '                                     . • ; >...
                A sufficient number of shares must be distributed to the public
 in the Member State in which admission to official quotation is applied
'for, at the latest at the time of admission . .
                This condition is not applicable where the shares in question •
 are -to be distributed to the public through the stock exchange * In this
 case , admission to official quotation may; be granted only if the competent
 authorities are convinced that a sufficient . number of shares will be
 distribute^ through "the stock exchange ifithin a short period.*"' ' ' ' ' '
          % ' ' ''v  -.'J . ,                  _          (>        ...
                Vjheire admission to official quotation is sought for a further-
 blocjc of shares of the same class , the competent authorities may assess
 whether a sufficient number of shares has been distributed to the public
 by reference to all the shares issued and not only this further block .
                Where the shares in question are already officially quoted in
 one or more pthor States , Member States may,' by way of derogation from the
 first paragraph, admit the shares to official quotation if a sufficient
 number pf shared is distributed to the public in at least one of the
 States in which the shares are officially quoted .
                Shares will not be deemed to be distributed in sufficient number
 if the shares of the same class held by the public? do not represent -at *
 least 25 % of the subscribed capital of the company . However, Member -
 States may authorize the competent authorities to consider that a
 sufficient number is distributed even if this percentage is not attained,
 ---pagebreak---                                       - 18 -
 where ; ixt view of the large number of shares of "the same class and
 ■the extent of their distribution to the public , they feel that the
 market will operate properly with this lower percentage .
    - 5 » Quotation of shares of the same class •
             The application for admission to official quotation must be for
 all' the shares of -the same class already issued.
             By way of derogation from the first paragraph, Member States may
 provide that the condition laid down in that paragraph does not apply
 to applications for admission not covering all the shares of the same,
 class, where the shares of this class for which admission is not sought
belong to blocks serving to maintain control of the company or are not
negotiable for a certain time under agreements , provided that the
public is informed of such situations and that there is no danger of
prejudicing the interests of the holders of the shares for which
 admission is sought .
      6 . Physical shape , substance or appearance
              For shares issued by companies from another Member State , it
 is necessary and sufficient that their physical shape , substance and
 appearance comply with the standards laid down in this other Member State .
Where the physical shape , substance or appearance do not conform to the
provisions in force in the Member State in which quotation is applied
 for, the competent authorities of this State will make this known to
the public .
             The physical shape , substance and appearance of shares issued
"by companies from non-member States must be such as to ensure that
 investors' interests are safeguarded.
 ---pagebreak---    1 , Quotation in -the country of -origin . or , in the country'' in which    ,r :
       the ma.ior proportion of the shares is held .
                                                                 ' '•        C"  i •
           Shares of companies from non-member states must have been
admitted to official quotation either in the country of origin or
in the country in which the major proportion of th6 share fr i6 : helcU *
           Member States may , however , by way of derogation from the first :
                            4            •
paragraph, provide that shares may be admitted to official quotation
even when the condition laid down in that paragraph is not fulfilled,
provided that the competent authorities have ascertained . that 1;he reason
why the shares are not quoted in the country of origin or .in the
country in which the major proportion is . held is not the need to protect
the interests of investors .
 ---pagebreak---                                          - 20 -
                                                                   MITEX II
                                       SCHEDUIE B     ••• ' ■
                   COKDITIOITS FOR THE ADMISSIOIT OF DEBT SECURITIES
                     TO OFFICIAL Q.UOTATIOH OF STOCK EXCHANGES OF
                      MEMBER STATES OF THE EUROPEAN COMMUNITIES     "
A. Admission to official quotation of debt securities iseaed "by an undertaking
   I. Conditions relating to undertakings for whose debt securities            , >
       quotation is sought
       1 • Legal position of the undertaking
            The legal position of the undertaking roust "be in conformity with
the lavis and regulations to which it is subject , as regards both its
formation and its operation under the memorandum and articles of association .
            Proof that this condition is fulfilled need riot be provided where
securities of the undertaking are already officially quoted on , the same
stock exchange .
      2 . Capacity of the undertaking to meet its commitments
           The undertaking must provide sufficient evidence that it is able
to meet the commitments resulting from the issue of the loan stock for
which quotation is sought .
  II . Conditions relating to the debt securities for which quotation is
        sought                                     .    .
    "   1 « Legal' position   of- debt securities ' •            ' ' "  :   -r
            The issue concerned must conform to the laws and regulations
to which it is subject .
 ---pagebreak---     2 . ITerotiability of debt securities
          l|1 '        ■«■»■■ * » ■ ■ ■ "       I 1
         The securities must "be freely negotiable#
         Member States' ' may'Treat"S3 'ffeGly1 negotiable securities , securities
which are not fully paict up,' " if 'arrangements "ha^e-been'made' to ensure
that negotiability of the'se s^dtirities is hof'hampered-and' dealing is made
transparent by providing the public with all appropriate information .
 **           ' *     - «V. ..., '       • :                 .           • .            ' •' > * ' •*"
                                                               ••            k v • V ■ >t             " - '
    3 « Fublic . issue preceding admission
         In the case of public issue preceding admission .to qfficigl ,quotation,
the first quotation may be made only after the closure, .of the period ,
during which applications for subscription may be submitted. This provision
is not applicable in the case of tap issues of debt securities when the
closure date of the subscription period is not fixed .
    4 » Distribution of debt securities
         A sufficient, number of securities must be distributed to the , public,
in the Member State in which admission to official quotation is applied .                                   ,
for, at the latest at the time of admission .
         This condition is not applicable where the securities in question
are to be distributed to the public through the stock exchange ♦ In
this case , admission to official quotation may bo granted "only if the
competent authorities are convinced that a sufficient number of securities
will be distributed through the stock exchange within a short period*
        : w.. ... . ,                        •• •'■' •.> . .      •••..- ^ * •
         Where admission to official (Rotation is sought for debt securities
issued on tap or as repeat issues by . financial institutions , the competent
authorities may assess whether a sufficient number of securities has been
distributed to the public by reference to ali the securities issued and
not only the new issue .
 ---pagebreak---                                          22
           VJhere the securities in question are already officially quoted
in one or more other States , Member States may, notwithstanding the first
paragraph , admit the securities to official quotation if a' sufficient
number of securities is distributed to the public in at least one of the
States in which the securities are officially quoted . ;            .       -.-V
                                                                1 •    f
           Securities will not be deemed to be distributed in sufficient
number if" the securities relating to the same loan issue and held by the
public do not represent at least 25 $ of the amount of the issue . However,
Member States may authorize the competent authorities to consider that a .
sufficient number is distributed even if this percentage is not attained,
where , in view of the large number of securities relating to the same
loan issue and the extent of their distribution to the public , they feel
that the market will operate properly with this' lower percentage .
 '   5 * Quotation of debt securities relating to the same loan isBue ^
         The application for admission to official quotation must be for all
the securities relating to the same loan issue .      i-
     6 . Physical shape , substance and appearance of debt securities
1.       For securities issued by undertakings from another Member .State , it
is necessary and sufficient that their physical shape , substance and
appearance com;, ly with the standards laid down in this other Member State .
I'Jhcre the physical shape,7 substance or' appearance do not conform to the
provisions in force in the Member State      in which quotation is applied for ,
the competent authorities of this State will make this known to the public .
2.       However, the physical shape , substance and appeararice of securities
issued in a single 'Member State must conform to the standards in force
in this Member State .     .
3.       The physical shape , substance and appearance of securities issued by
undertakings from non-member States must be such as to ensure that
investors' interests are safeguarded .
 ---pagebreak---                                       - 23 •-
Ill , Other bonditions        *v  •        ••• •                      • - v.
       1 . Minimum amount of the loan
           The amount of the loan may not be less . than 200 000 units of account .
This provision is not applicable in the case of tap . issues where the amount
of the loan is not fixed ,
     • 2 • Convertible debentures or debentures with warrants attached
           Convertible debentures or debentures with warrants attached may. . .
be admitted to official quotation' only if the related shares axe : already
quoted on the same stock exchange or are to be admitted . simultaneously . .■
        "" However', Member States may, ; notvxithstanding the first paragraph , ;
provide for the admission to official quotation of convertible debentures
or debentures with warrants attached even when the condition laid down
in that paragraph is not fulfilled, pro.vided , that the competent authorities
have ascertained that holders . have at their disposal all the information
necesrary to form en opinion concerning the value of the shares to which
these debentures relate , where j
(a) when the debentures are" admitted' to official 'quotation, these shares
     are Already officially quoted on another stock exchange in -the same
     Member State , or on a stock exchange in another Member State , or on a
     stock exchange in a non-member State , provided that this latter stqck
     exchange , in the view of the " competent authorities , offers investors
     every guarantee;' or
(b ) although these shares are not officially quoted when the debentures
     are admittedr an application for official quotation will be made ,
     not later than the opening date of the, conversion or subscription
     period, in the Member State in vjhich the application for the.
     admission of the debentures to official quotation is made and the
     competent authorities . have ascertained that no obstacle exists to
     their subsequent admission to official quotation.
 ---pagebreak---                                          - 24 -
B. Admission to official quotation of debt securities issued "by •the central
    governments or regional or local authorities of another State or by a
   j'V^ l^c Tint crr^j-orial or/rani zati on                                 •
    1 . Capacity to meet commitments resulting from the loan
             Central governments , regional or local authorities and public
international organisations must provide sufficient evidence that they are
able to meet the commitments resulting from the issue ct the loan stock
for which admission to quotation is sought .               .
             Proof that this condition is fulfilled need not be provided by
Ilemter States .              ;
             Heraber States may , notwithct anding paragraph 1 , provide that the
condition laid dc.-m in that paragraph does not apply to non-member States
and public international organizations , where their competent authorities
have ascertained that these issuers offer investors every guarantee .
    2 . ITeroti ability of debt securities
             The securities must be freely negotiable .
    3 , public issue jjrc c eàing admission
             In the' case of public issue preceding admission to -official , ■
quotation, the first quotation may be made only after the closure of the
period during which applications for subscription may be submitted. This
provision is not applicable where the closure date of the subscription
period is not fi:c6d.                     •'
    4* Distribution of debt securities          ,
             A sufficient number of securities must be distributed to the .
 public in the Member State in which admission to official quotation is
 anpliod for, at the iatest at the time of admission.                    -v
 ---pagebreak---                                        - 25
            This condition is not applicable where the securities in question
  are to be distributed to the public through, the stock exchange . In thi6 .
  case , admission to official quotation may. be granted only ,if the ccmt>etex:t
  authorities are convinced . that a sufficient number of securities will be *
  distributed through the stock exchange within .a short period.
            Where the securities in question are already officially quoted in .
  one or more other States, Member States may, by way of derogation from the
, first paragraph, admit the securities to official quotation if a sufficient
  number of securities is distributed to the public in at least one of the
  States in - which the securities are officially quoted.
            Securities trill not be deemed to bo distributed in sufficient number
  if the securities relating to the same loan issue and held by the public
  do not reprecent at least 25 % of the amount of the issue . However, Meraber .
  States may authorize the competent authorities to consider thr/fc a sufficient .
  number, is distributed even if this percentage is not attained, where , in
  view of the large number of securities relating to the same loan issue
  and the ertent of their distribution to the public , they feel that the
  market will operate properly with this lower percentage . .
     5* Quotation of debt securities relating to the same loan issue
            The application for admission to official quotation must be for
  all the securities relating to the same loan issue .
     6 . Physical shape , substance and appearance of debt securities
            For securities issued by the central government or regional or
  local authorities of a Member State, it is necessary and sufficient that their
  physical shape , substance and appearance comply with the standards laid down
  in that Member State . Where the physical shape , substance or appearance does
  not conform to the provisions in force in the Member State in which quotation
  is applied for, the competent authorities of this State will make this known
  to the public .
 ---pagebreak---                                      26 -
           The physical shape , substance or appearance of securities
issued "by the central government or regional or local authorities of a
non-member State or "by a public international organization must "be such
as to ensure that investors' interests are safeguarded.     ' '   '
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                                          i,
                                          f                        A1TIIEX III
                                      SCHEDULE C
                  OBLIGATIOITS OF COMPARES WHOSE SHAKES ARE ADMITTED       "  "
                      TO OFFICIAL QUOTATION Oil' A STOCK EXCHAITGE
                    OF A MEMBER STATS OP THE EUROFEAIT COMMUNITIES  '
    C>i'otc,tion of nowly; issued shares of the same class
           Without prejudice to the provisions of Schedule A , II , 5 » paragraph 2 ,
in the case of a new issue of shares of the same class as those already
officially quoted, the company is required to apply for admission to the
same official quotation for these new shares , either a year after their
issue at the latest or when they "become freely negotiable .
2 . Treatment of shareholders
            ( a) The company must ensure that holders of shares of the same
class are given equal treatment in respect of all the rights attaching
to these shares . This does not prevent limits "being placed on the number
of votes that an individual shareholder may have at the general meeting
under national laws or the memoran&tun and articles of association of the
company . ■
            (b ) The company must ensure that on each stock exchange in a Member \
State on \tfhich its shares are officially quoted, all the neoessary
information and facilities are available without any cost to shareholders ,
to enable these to exercise their rights . In particular , it must :
- enable shareholders to vote by proxy;
- publish notices concerning the allocation and payment of dividends , the
   holding of meetings, the issue of new shares , allotment , subscription,
   renunciation and conversion operations ;
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- designate as its agent a financial institution at which, shareholders
   may exercise their financial rights .
3 . Alteration of the memorandum or articles of association
            ( a) A company from a Member State planning to alter its
memorandum or articles of association must communicate the plans of such
alterations to the competent authorities of this Member State if its
shares are quoted there or , otherwise , to those of the Member State in which
the major proportion of its shares are officially traded .
                  A company from .a non-member State planning such alterations
must communicate the plans to the competent authorities of the Member
State , in which the major proportion of its shares are officially traded .
              (b ) These plans muat be communicated to the competent authorities
at the latest '..lien the general meeting v.'hich is to decide on the proposed
alterations of the memorandum or articles of association is called .
4. Continuin# information
                   The company must periodically, and half-yearly at least , make
available to the public sufficient information to enable the public to
evaluate the assets and financial position of the company and the general
progress of its business , without prejudice to the publication of the annual
accounts and annual report , and consolidated accounts and annual report of the
group , as required by national law.
5 . Additional information
                   The company must inform the public without delay of major
new developments in its sphere of activity which are not public knowledge
and which may, by virtue of their effect on its assets and financial
position or on the general progress of its business , lead to large movements
in the prices of      its shares .
 ---pagebreak---                                      - 29-r
                                      ; <*' y* ,-»»»
          (b ) The company must inform^tfie public without delay of any '
changes in the rights attaching to the vkrious classes of shaires .           '
          (c ) The company must inforra1 the, public ..of,.any , changes in the*. ■' , *
information published previously on the structure of the major holdings
of its capital , as soon as . such changes come to its notice .
          -                      ' "                 V •
6 . Equivalence of information
          ( a) A company vchose shares are officially quoted on stock
exchanges in different Member States must ensure that equivalent information
is made available to each of these markets .               "      :
           (b ) A company whose shares are officially quoted on stock exchanges
in one or more Member States and in one or more non-member States , must
make available to the markets of the Member State or States in which its
shares are quoted the same information as is available to the markets
of the non-member State or States in question .                                          .
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                                                                        AEITTX IV
                                     SCHEDUffi D. .
         P3LIGATI0ITS OF ISSUERS KHOSE DEBT SECURITIES ARE .ADMITTED
             •  TO OFFICIAL SiUOTATIOIT PIT A STOCK EXCHATGE OF A
                   KEI-TBIDE STATE OF TIIE EUEOFEAII COMMUNITIES
A. Debt securities issued "by an under-taking
       Treatment of holders
       (a ) The undertaking must ensure that all holders of securities relating
   to the same lorJi issue are given equal treatment in respect of all the
   rights attaching to these securities .
       ("b ) The undertaking must ensure that on each stock exchange in a Member
   State on which its debt securities arc officially quoted, all the
   necessary information and facilities are available without any cost to
   holders , to enable these to exercise their rights . In particular , it must :
            – publish notices concerning the holding of meetings of the holders
               of debt securities , the payment of interest , the exercise of any
               conversion , subscription or renunciation rights , and redemption?
            - designate        its agent a financial institution at which the holders
               of debt securities may exercise their financial rights .
                                                                                  \
   2 . Alteration of the memorandum or articles of association
       (a ) An undertaking from a Member State planning to alter its memorandum
   or articles of - association must communicate the plans of such alterations
   to the competent authorities of this Member State if its debt securities
   are quoted there or, otherwise , to those of the Member State in which
   the major proportion of its debt securities are officially traded.
 ---pagebreak---                                     r"31 -
               An undertaking from a non-member conn-try planning such
alterations must communicate the plans ' to^hts- competent authorities of the
Member State in which the major proportion of its debt securities are
officially traded .                                                    : • •
        ( b ) These plans must be communicated' to the: competent , authorities
at the latest when the general meeting which is to decide on the proposed
alterations of the memorandum or articles of . association is called *
3 * Continuing information
               The undertaking must periodically , and half-yearly at least ,
make available to the publio sufficient information to enable the public
to evaluate the assets and financial position of the undertaking and the
general progress of its business , without prejudice to the publication
of the annual accounts and annual report , and consolidated accounts and
annual report of the group , as required by national law.
A4 Additiohal information 1                                                 1   ;
     Ν
       ,( a) The undertaking must inform the public without delay of major
new d.evelopments in its sphere of activity which are not public knowledge
and which may , by virtue of their effect on its assets and financial
position or on the general progress of its business , lead to large
movements - in the prices of its debt securities . As regards index-linked
debt securities and those whose interest rate depends on a given parameter
the undertaking must also publish information about the application of
the index-linked criteria and of the parameter for determining the . • • . ;
interest rate .
        (b ) The undertaking must inform the public without delay of new          '
loan issues and in particular of guarantees they may carry,          ,
 ---pagebreak---                                      - 32 -
          ( c ) Where the debt securities officially quoted are convertible
debentures or debentures with warrants attached, the undertaking must
inform the public without delay cf any changes in the rights attaching
to the various classes of. shares .
5 . Ecruival ences of information
          (a) An undertaking whose debt, securities are officially quoted
on stock exchanges in different Member States must ensure that .
equivalent information is made available to each of these markets ,.    ,
          (b ) An undertaking whose debt securities are officially quoted
©n stock exchanges in one or more Member States, and in one or more
non-member States , must make- available to the markets of the Member ,
State or States in which its debt securities are quoted, the same ,
information as is available to the markets of the non-member State or
States in question*                             :
B. Debt securities issued by the central government or regional or local
    authorities of a foreign State or by a public international organization .
    1 . Treatment of holders
          ( a ) Central governments, regional or local authorities and public
international organizations must ensure that all holders of securities
relating to the same loan issue are given equal treatment in respect of
all the rights attaching to these securities .
          (b ) Central governments , regional or local authorities and public
international organizations must ensure that on each stock exchange in
a Member State on which their debt securities are officially quoted , all
the necessary information and facilities are available without any cost
to holders , to enable these to exercise their rights . In particular,
they must :
 ---pagebreak---                                       - 33 -
  - publish notices concerning -the holding of meetings of the holders
     of debt securities ^ the payment 'of interest and redemptions
  - designate ae their agent a financial institution at which . the holders          .
     of de"bt securities may exercise their financial rights .- •.
  2 . Equivalence of information                    ; •  ,   -     •:
            (a) Central governments, regional or local atthorities find public
  international oigsni Nations whose debt securities are officially quoted .
  on stook exchanges in different : Member States must ensure that- equivalent
. information is made available to each of these markets *
                 .             \
            (b ) Central governments , regional or local authorities and public
  international organizations whose debt securities are officially                ■
  quoted on stock exchanges in one or more Member States and, in one or .
  more non-member States , "must make available to the markets of the Member
  State or States in which their debt securities are quoted, . the same ,
  information as is available to the markets of the non-member State
  or States m question . -          ,  /
                                  "     ** *   * *    . •••'   *• * ■' • .. A. * „ .