01 August 2001

FESCO report on prospectus: A 'European Passeport' for issuers

-
In the report for the EU Commission sent by FESCO on 20 December 2000 , mention was made of setting-up a system whereby “issuers utilize items of different schedules, conforming to actual characteristics of securities issued” with regard to a range of new products which has emerged on the market. This was proposed to meet “the need for modernization and enhanced flexibility”, in order to facilitate the development of a competitive and innovative European capital market. Further work was expected to be undertaken by the Group on “the feasibility and practical implications of such an approach”. The present proposal is the result of this work, and is based on the premise “not to have different levels of disclosure for public offerings or listings”. In fact, as per the report, “the level of disclosure should be the same throughout the European market, and therefore no difference should exist between domestic and cross-border issues”. The building block approach is meant to give flexibility to the process of creating prospectus schedules for new financial instruments. This process is presently very lengthy and since the use of the EU passport requires a previous agreement on the content of the prospectus, for the efficient functioning of the EU passport would be useful to set up a process that facilitates the creation of prospectus schedules.

© FESCO