9 Financial services
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5420/10
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| ECB Opinion of 11 January 2010 on a draft Directive amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market
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| Legal base | —
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| Document originated | —
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| Deposited in Parliament | 21 January 2010
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| Department | HM Treasury
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| Basis of consideration | EM of 4 February 2010
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 Directive 2003/71/EC sets out Community requirements on prospectuses
that must be published when securities are offered to the public
or admitted to trading. Directive 2004/109/EC sets out transparency
requirements in relation to information about issuers whose securities
are admitted to trading on a regulated market in the Community.
In November 2009 we cleared from scrutiny a draft Directive, amending
Directive 2003/71/EC and Directive 2004/109/EC, which the Commission
had proposed in order to simplify and improve the application
of the Directives by reducing legal uncertainties, reducing unjustified
burdensome requirements on market participants and further enhancing
investor protection. The proposal was presented as part of the
Commission's programme to simplify legislation and reduce administrative
burdens.[20]
The document
9.2 In this formal Opinion on the draft Directive the European
Central Bank broadly supports the Commission's proposals and welcomes
the aim of strengthening investor protection, by making information
in prospectuses simpler and easier to read. In specific comments,
the bank:
- says that it considers that
a clear legal framework for the disclosure of central banks' lending
operations should be put in place in order to facilitate the smooth
and rapid conduct of central banks' lending or other liquidity
facilities, including in crisis situations;
- says that "information on central banks'
lending or other liquidity facilities provided to a particular
credit institution, including emergency liquidity assistance,
needs to be kept confidential in order to contribute to the stability
of the financial system as a whole and maintain public confidence
in a period of crisis";
- proposes that it, and other central banks, are
exempt from disclosure obligations in EU legislation; and
- suggests specific drafting proposals for a provision
that persons or entities that are treated on request as non-professional
clients, in accordance with the Markets in Financial Instruments
Directive, shall not be considered as qualified investors for
the purposes of the Prospectus Directive and for inclusion of
explicit public interest exceptions from reporting requirements
for central banks, similar to that contained in Article 8(2) of
Directive 2003/71/EC.
The Government's view
9.3 The Financial Services Secretary to the Treasury
(Lord Myners) reminds us that the Government supports the process
of review of the existing legislation and the resulting proposal
for amendments to improve the balance between the goals of investor
protection, consumer confidence, efficiency, legal clarity, and
reduction of administrative burdens. He then comments that the
Government supports:
- the European Central Bank's
aim to clarify what regime is applicable to professional clients
which are treated on request as non-professionals, in accordance
with the Markets in Financial Instruments Directive — the
proposed amendment is consistent with the Commission's proposal
to harmonise the term "qualified investor" with that
of "professional clients" used in that Directive; and
- the Bank's objectives for the provision of emergency
liquidity assistance and wishes to see Member States looking to
possible amendments to the Prospectus, Transparency and Market
Abuse Directives to enable delayed disclosure of the provision
of emergency liquidity assistance by central banks.
Conclusion
9.4 Whilst clearing the document, we draw this
additional information about the proposals for amending Directive
2003/71/EC and Directive 2004/109/EC to the attention of the House.
20 (30966) 13688/09 + ADDs 1-2: see HC 5-i (2009-10),
chapter 20 (19 November 2009). Back
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