EU directive to make UK listings disappear

According to the chairman of the Financial Serivces Authorities, the prospectus directive would have a disastrous impact on the UK markets and warned: ‘the concept of listing as such is likely to disappear.’

The directive is currently under debate in the European Union’s Council and seeks to harmonise listing rules across EU countries to ensure the member states are not in competition.

But according to Davies, the regime will mean UK aspects of the listing rules will cease to exist as the directive is a ‘maximum harmonisation directive,’ which means rules approved in one member state will be valid in all others.

He said: ‘The major [UK rules] include the model code, shareholder notification, votes about major transactions, and compliance to governance codes. The prospectus directive means if it is passed in its present form, these aspects of the rules will fall away.’

‘In the aftermath of the Enron affair it is remarkable to think that we may soon lose the basis on which many corporate governance and disclosure provisions rest.’

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