The prospectus directive : an instrument for the facilitation of a community wide capital market

Abstract

The dissertation discusses whether the Prospectus Directive succeeded in facilitating a Community wide capital market. A study of the practical implications of the measures introduced by the Prospectus Directive to encourage a single market is undertaken. In the introductory Chapter the aims and objectives of the Prospectus Directive are discussed. In Chapter 2, this dissertation examines and evaluates the passporting regime, which is one of the primary measures introduced by the Prospectus Directive aimed at facilitating cross-border use of prospectuses and movement of capital. The success or otherwise of the passporting system is discussed in detail. The use of the single passport in practice is analysed by reviewing the data published by the Committee of European Securities Regulators. The Chapter discusses whether the objective of maximum harmonisation was achieved in view particularly of the divergent interpretations and implementations of the Prospectus Directive by the Member States. Chapter 3 studies the legal provisions in the Prospectus Directive itself to understand the measures introduced to harmonise the national laws of the Member States relating to securities that are offered to the public and admission to trading on a regulated market. The success or otherwise of these measures is discussed. An evaluation of the problems encountered by market participants, both from an issuers' point of view and an investors' point of view, is undertaken. The provisions aim at creating a single market, thus issuers need to be incentivised to use prospectuses in accordance with the Prospectus Directive. The regime needs to be simple and straightforward for both issuers and investors. However, whether this aim has been achieved to the fullest extent possible is doubtful. The competent authorities of the Member States often differ in their approach to certain issues. References to practices in various Member States shall be made to highlight the problems met. It is questioned whether the Prospectus Directive needs to be updated in view of such problems. In Chapter 4, the dissertation evaluates other problems that inhibit a complete single European market, including, the costs and the complexity to the issuers, the one-size fits all model and exchange-regulated markets. Throughout the dissertation, in view of any shortcomings indentified in the Prospectus Directive, the dissertation aims at providing possible amendments or changes that strengthen further the pan-European market. The decision to divide the dissertation in this manner is not based on the belief that this is the only way of structuring the analysis, but hopefully the classification aids clarity. However, the division may be said to be a mere formality to try and systematically examine the Prospectus Directive. In fact, one may validly argue that certain issues and comments fall under more than one chapter.