Speaking before the House of Commons in London, Commissioner McCreevy reported about things that need to be addressed in relation to the private equity industry.
“The lack of a European private placement regime is often perceived as creating legal uncertainty and hindering cross-border business”, McCreevy said. “We have now begun to gather information and views as regards the necessity and feasibility of a European private placement regime.”
“First we need to establish if there is a single market failure and to put the issue in an economic context.
“Second we need to establish what might be the requirements of an 'ideal' private placement regime, and
“Third we need to look at how existing EU rules might be appropriately amended.
There is also a need for independent directors on public company boards to be attentive to potential conflicts of interest on the part of members of their management teams when those teams are proposing private-equity backed buyout bids. I should also mention that the concerns of pension fund trustees in companies where there are substantial pension fund deficits are also legitimate in the context of a leveraged buyout of a business – be it by private equity firms or other entities.
Full speech
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