Legal Certainty Group Second Advice
Our Legal Committee is currently analysing the Legal Certainty Group’s (LCG) Second Advice. The LCG is acting in the context of the works carried out by the public and private sector to remove the so-called Giovannini Barriers to efficient cross-border post-trading services. The LCG proposes i.a. to introduce rules on the specific duties of intermediaries in the area of corporate actions. Duties would include ensuring the information flow between issuers and investors as well as the exercise of investors’ rights through the holding chain. The Commission will decide before the end of 2008 whether it will follow the LCG’s call for legislative measures. To see the full LCG second advice, please click here. To learn more about the LCG and its activities click here.
Market Standards on Corporate Actions
A cross sector industry group named the Corporate Actions Joint Working Group (CAJWG) was set up to contribute to the dismantling of Giovannini Barrier 3 on corporate actions. The CAJWG includes representatives of issuers (EuropeanIssuers), market infrastructures (EACH and ECSDA) and intermediaries (ESSF, EBF, EACB, ESBG). The CAJWG developed a comprehensive set of market standards for the operational processing of corporate actions. Their goal is to eliminate the existing national differences and current fragmentation that stand in the way of an efficient European capital market. The CAJWG submitted its draft Market Standards on Corporate Actions Processing to an EU wide market consultation on 25 September.
Market Standards on General Meetings
A second cross-sector industry group, the Joint Working Group on General Meetings (JWGGM), is drafting market standards for the organisation of general shareholders meetings. EuropeanIssuers’ Secretary General is chairing the JWGGM. The standards are a partial and practical implementation of the Shareholders Rights Directive of 11 July 2007. The focus lies on 3 selected processes, namely a) the issuer’s meeting notice, b) voting entitlement and c) the shareholder’s attendance notice and voting instructions. A first set of draft standards was submitted to a market consultation earlier this year and the JWGGM is currently revising them on the basis of feedback received. The objective is to finalise the standards before the year end and to start the preparation of implementation immediately after.
CESR Consultation Market Abuse Directive Level 3 - second step
EuropeanIssuers will prepare comments on the newest consultation of CESR (October 2008) on its third set of guidance and information on the common operation of the Directive. The objective is the convergent implementation and application of the Market Abuse regime throughout the EU. CESR's consultation is in two parts: 1) insider lists and Suspicious Transaction Reporting and 2) stabilization and two-fold notion of inside information. This is the second step of the consultation.
Simplification of Company law - Commission’s proposal on mergers and divisions
The Legal Committee is examining also the Commission’s proposal for a Directive that will further reduce the administrative burden on European public limited-liability companies in the area of mergers and divisions. The proposal complements the two packages of “fast track” measures that were put forward by the Commission in March 2007 and April 2008. To see the proposal click here.
UNIDROIT Draft Convention on Intermediated Securities
The UNIDROIT draft Convention is meant to provide substantive rules regarding intermediated (book-entry) securities. It should be the legal framework for securities holding, transfer and collateralisation and contribute to the internal stability of national financial markets and their cross-border compatibility and, as such, promote capital formation. EuropeanIssuers was represented at the first diplomatic session of the Convention in Geneva from 1 to 12 September 2008. To see the documents produced during the conference, click here.
Calendar
16/10/2008
7th Corporate Governance Conference – Paris
16-17 October 2008 - Paris Seminar co-hosted by AFEP: "A Modern Governance for Competitive European Companies" For registration and the full programme click here.
20/10/2008
Cesame II meeting - Brussels
Cesame II which continues the work of Cesame I, is to have its first meeting in Brussels on 22 October.
Cesame is the Clearing and Settlement Advisory and Monitoring Expert Group set up with the objective to dismantle the Giovannini Barriers to efficient post trading services. EuropeanIssuers is actively involved in its working groups on corporate actions and on general meetings.
23/10/2008
Conference on 2nd Advice of LCG - Brussels.
The Second Advice of the Legal Certainty Group will be presented at a conference on 23 October held at the National Bank of Belgium, rue Montagne aux Herbes Potagères, 61, 1000 Brussels.
See the program and invitation.
12/11/2008
Conference - Review Market Abuse Regime - Brussels
DG Markt organises a conference on the Market Abuse Directive to be held in the Hotel Metropole Brussels on 12 November 2008.
See the registration info and program.
13/11/2008
'MiFID one year on' conference - Brussels
DG Markt organises a conference to discuss the impact of MiFID, to be held on 13 November at Hotel Metropole in Brussels.
For details and complete program click here.
What a pleasure it is to address you with the words “Dear Reader”, as it means that the first issue of our newsletter is now coming out! For many of you, our new website www.europeanissuers.eu is a new source of interesting information, updated by our secretariat on a daily basis. The public area has the “everything you need to know” about our organisation, our lobbying activities, position papers, some newsflashes, etc. The “members only” area has special features, including a calendar of internal and external events, news regarding the latest regulatory developments and access to meeting documents of our corporate bodies. Last but not least, a “shared working space” allows Legal Committee members to share draft position papers and other works in progress.
Those who are not “frequent surfers” will probably find it more convenient to receive with our newsletter a selection of website items (latest news, latest positions, events and meetings scheduled in the near future) completed with info on works in progress, special events at our members’ organisations, new initiatives in EuropeanIssuers and some faits divers! Our newsletter will appear every 6 to 8 weeks. This first issue spans a period of more than two months and is therefore a bit longish.
The website and the newsletter are not the only post summer novelties at EuropeanIssuers: on 1 September our staff was reinforced with the arrival of Paulo Pina da Silva, our new EU Policy Adviser. Paulo’s presence already shows its effects in many of the work done by our secretariat and his monitoring work makes him a great contributor to the newsflashes!
Autumn is usually a very busy season in our sector and 2008 will not be an exception. We are going through a phase of high turbulence: national governments are taking once in a lifetime measures in an attempt to fight the storm on financial markets and avoid that the real economy would be hit (too) hard in the face due to spill over effects. There are many divergent opinions on what’s the right way to handle the current crisis, but all seem to agree that a regulatory backlash is coming our way. The revision of the EU supervisory framework, the announced authorisation and supervision regime for Credit Rating Agencies, the review of the Prospectus, Transparency and Market Abuse Regimes, the study the EC is planning on Corporate Governance, are just a few examples of what is in the pipeline. EuropeanIssuers shall be there to promote the interests of its members!
Enjoy your reading,
Kind regards,
Dorien Fransens
Secretary General
Latest News Latest Positions Works in progress Calendar Presentations and Speeches
Latest News
New U.S. SEC Rules on Form 20-F Reflect EuropeanIssuers’ Comments
The U.S. SEC amended the rules applicable to foreign private investors (FPIs) who file reports with the SEC. One of them consists in an acceleration of the deadline for filing an annual report on form 20-F to four months after the end of the fiscal year instead of the current six months.
http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=57
topU.S. SEC Adopts Automatic Exemption Rules for Foreign Private Issuers
The U.S. SEC adopted important amendments to rule 12g3-2(b) which exempts certain foreign private issuers (FPIs) from registration with the SEC.
http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=58
New Dutch Case-law allows for Shareholder Incentives
A hedge fund opposed to a Dutch company's plan to set up a loyalty-dividend scheme on the grounds of violation of the principle of equal treatment of shareholders. The Supreme Court however ruled that the law leaves room to apply different rights to different shares of the same kind.
http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=51
Tenth anniversary of Germany’s Finanzplatz Report
EuropeanIssuers’ Chairman congratulates the Deutsches Aktieninstitut with the tenth anniversary of its Finanzplatz Report. In an article published in its latest edition, Mr. Schraven praises the impressive track record of the magazine. The article entitled “Mouthpiece and Mirror of the financial community” presents an insight into the ten years of existence of Finanzplatz Report.
http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=54
CESAME II GROUP - Dorien Fransens appointed as member
EuropeanIssuers' Secretary General, Dorien Fransens, has been appointed as member of CESAME II.
http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=49
Latest Positions
Market Abuse Directive CESR Consultation – LEVEL 3
EuropeanIssuers welcomes CESR’s efforts to ensure a coherent implementation of insiders lists requirements, but:
- Recommends not to burden issuers with additional requirements not foreseen by MAD;
- Comments on who should be included in insiders lists, differentiating permanent from occasional insiders;
- Comments on when an occasional insider list should be drawn up, underlining the uncertainty still existing as to the notion of “inside information”;
- Ponders such aspects as how to inform persons having access to information of their legal duties, the language regime applicable to lists, and third parties obligations to draw up lists;
- Suggests a simplified set of rules for smaller companies.
See the CESR Consultation Paper.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=165
EFRAG Enhancement Consultation 23/07/08
EuropeanIssuers advocates re-examining how the strengthening of EFRAG can be achieved without imposing further financial contributions on companies and business organisations:
- They are already contributing substantially to EFRAG both financially and by contributions in kind; they will not be in a position to raise financial support;
- Businesses could instead increase contributions in kind by putting experts at the disposal of EFRAG, which would also be more efficient than increasing the numbers of their own staff.
See the Consultation Paper.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=164
Commission Consultations on Credit Rating Agencies 31/07/08
EuropeanIssuers:
- Welcomes increased transparency of rating reports and rating methodologies
- Recommends a thorough assessment of pros and cons, costs and benefits
- Doubts whether a formal authorisation process would be the adequate answer
- Prefers self regulation and the effect of market forces
- Does not support a new EU supervisory agency for CRAs; CESR’s role needs further analysis
- Promotes international co-ordination
- Supports the proposals on excessive reliance
See the Consultation Documents.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=163
XBRL - SEC Proposal 30/05/08
EuropeanIssuers comments on the SEC proposal that would require companies reporting under U.S. GAAP or IFRS to provide their financial statements to the SEC in interactive data (XBRL) format. EuropeanIssuers believes that it would not be justified to impose the use of XBRL on foreign private issuers for various reasons including the cost that such would imply and the lack of real benefit.
See the SEC Proposal dated 30 May 2008.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=162
General Meetings Market Standards
EuropeanIssuers comments on the draft market standards developed by the Joint Working Group on General Meetings to harmonise GM related communications across the EU. EuropeanIssuers expresses its agreement while emphasizing some key aspects : a) standardised communication as the default rule of essential GM information via the CSD and intermediaries down to the end shareholder; b) this communication should be part of basic custody services; c) the timeliness of the communication.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=160
Commission Consultation CESR, CEBS & CEIOPS 23/05/08
EuropeanIssuers replies to the Paper on the Amendments to the Commission Decisions establishing CESR, CEBS and CEIOPS aiming at achieving a greater convergence and cooperation in financial supervision at EU level. EuropeanIssuers appreciates the Commission’s efforts. However the Commission Paper lacks ambition: a simple revision of the Commission Decisions is likely not sufficient; many issues addressed in the Paper are merely a ratification of what already happens in practice.
See the Consultation Paper.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=161
UNIDROIT Draft Convention On Substantive Rules Regarding Intermediated Securities Conf.11 - Doc. 3 - February 2008
EuropeanIssuers expresses the issuers' views on the UNIDROIT Draft Convention On Substantive Rules Regarding Intermediated Securities. The comments focus on those provisions that affect matters of corporate law in particular the relationship between the issuer and the shareholder. EuropeanIssuers is of the view that the Unidroit Convention should not interfere in this area and proposes therefore amendments to inter alia several provisions that address the rights of account holders in terms of voting, dividends etc., for instance art. 1, 3, 7 and 26. Amendments aim also at introducing the notion of ultimate account holder, one who is acting for his own account.
See the Consultation document.
http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=159
Presentations and Speeches
Clearing and Settlement Conference - London 6 & 7 October 2008
Secretary General Dorien Fransens gave a presentation at the "11th Annual Clearing and Settlement Conference", organised by Marcus Evans and held in London on 6 and 7 October. She gave an overview of the "Private sector initiatives to remove barrier 3 on corporate actions" with the focus on the market standards on corporate actions and general meetings. Click here for her presentation.
ICSA Summit on Corporate Governance - Brussels 7 October 2008
The Institute of Chartered Secretaries and Accountants held its yearly summit in Brussels on 7 and 8 October. It was dedicated to the topic "Comply or Explain – Making it work across Europe". Secretary General Dorien Fransens spoke about the issuer's perspective and shareholder communications. Her presentation focused on the challenges of contemporary shareholding and how these challenges could be addressed by the market standards on general meetings. To see her presentation click here.
