Brussels, 08/11/2010 (Agence Europe) - The European Commission has launched a consultation exercise that will run until Saturday 1 January 2011 on some twenty basic rules which underpin harmonisation in the European Union of rights connected with the ownership of financial securities likes shares, bonds and stock options. The wide variation in legislation from one member state to another creates legal insecurity in this domain against a cross-border backdrop and can lead to different owners of securities being identified from a chain of intermediaries. The Commission also gives the example of legal problems arising when investors want to cash in a dividend or exercise voting rights on securities bought in another member state.
The questions asked in the consultation cover the purchase and sale of securities, investor protection in the event of bankruptcy of the supplier of the share account, instructions from a third party, deciding which law applies to the securities, recognising rights in other countries and how to deal with financial players from outside the EU. In February 2009, an initial public consultation exercise was organised on legal security in the post-market domain in which the Commission compared and contrasted existing legislation in the member states (see EUROPE 9884). Specific legislation is expected to be unveiled in the summer of next year. (M.B./trans.fl)