Treasury consults on EU prospectus directive

Link: IPO market still fragile

The directive’s aim is to harmonise practices allowing companies to raise capital on stock exchanges across the EU in a bid to create a single capital market.

Many in the UK, however, fear the directive will erode the UK’s ability to impose its own requirements over and above those that are finally set out.

Stephen Timms, financial secretary, said: ‘We welcome the directive aims of improving market efficiency by enabling companies access to regulated financial markets across the EU through the production of a single, approved prospectus with high standards of disclosure to protect investors.

‘Given the important consequences the proposals will have for companies seeking to raise equity capital, it is important that all interested parties engage in the consultation process. We look forward to hearing their views.’

The directive requires companies to produce a prospectus whenever there is a public offer of securities or where securities are admitted to trading on a regulated market. The directive details the content of prospectus, and requires approval by the relevant national authority.

All comments on the proposed changes to legislation must be submitted before 28 January 2005.

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