Brussels, 05/11/2002 (Agence Europe) - The Ecofin Council reached political agreement by qualified majority on the "prospectus" directive, which will enable enterprises to provide a single financial prospectus, valid for the entire EU, when placing shares or making bids on European stock exchanges. Commissioner Frits Bolkestein noted that the compromise proposed by Council President Thor Pedersen "fully satisfies no one" but allows balance between the Member States' positions on the outstanding points, namely: the threshold from which issuers may choose the regulatory authorities who will approve the document, and the possibility of delegating part of the tasks of the regulatory authorities to market authorities.
After two publicly broadcast debates, the Council ended up adopting the following compromise:
Threshold: issuers may choose to address the regulatory authorities of the company's headquarters or of the place of issue, for shares of more than EUR 5,000. The Presidency had first proposed a threshold of 30,000 euro. The British, German, Luxembourg and Dutch Ministers would have preferred no threshold at all, so as to leave issuers free to choose the authorities they prefer. "Sixty-three percent of share issues, representing 77% of all issues in terms of value, present a value of less than 1,000 euro. Setting a higher threshold is tantamount to excluding the majority of share issues", said Hans Eichel (Germany). Gordon Brown (UK) warned against the dangers of seeing the market fragmented by the introduction of a threshold. In practice, it is in the United Kingdom's interests to open up the widest choice possible to maintain London's position as a financial market. France, Italy, Spain, Portugal, Belgium and Greece could have agreed to the Presidency's first proposal. Sweden and Finland argued for a threshold under 30,000 euro.
Delegation of powers. The regulatory authorities may delegate powers during a five-year transitional period. Ireland insisted on allowing such "functional delegation of tasks", supported by Sweden. In contrast, Belgian Minister Didier Reynders judged this possibility particularly "worrying" and would have preferred seeing the transitional period reduced to one year. Following his intervention, the Presidency had to drop plans to include in the text, after the vote in favour of the compromise, a proposal by Ireland that would have enabled the delegation of powers "strictly limited to operational tasks" after the transitional period. Reopening the debate after the vote would have created a dangerous precedent in view of the discussions that still have to take place before the end of the year in the Ecofin Council, pointed out Didier Reynders.
Creation of a unique central authority. Germany, which had problems linked to its federal structure, obtained a five-year transitional period before being obliged to create a single regulatory authority.