Aktienforum’s anniversary - 1 April ‘09
Our member Aktienforum, the Austrian Federation of Equity-Issuers and Investors, celebrated its 20th anniversary on 1 April 2009 with a gala dinner in the sumptuous dining hall of the House of Industry in Vienna. Some two hundred delegates, both from Austria and other member states of the European Union, enjoyed local specialties accompanied by classical music performed by an Austrian orchestra. The Chairmen of Aktienforum, Hellmut Longin, and of EuropeanIssuers, Jacques Schraven, focused in their speeches on lessons learned from the financial and economic crisis. This not-to-be-missed event was attended by many of EuropeanIssuers’ Board members as well as by a number of Legal Committee members. Once again we extend our warmest congratulations and thanks to our hosts who spared no effort in making the event a success!


Press Conference - 2 April ‘09
To mark Aktienforum’s anniversary, Aktienforum and EuropeanIssuers held a joint press conference attended by Austrian journalists under the title “Alignment of Capital Markets to Long-term Value Creation”. Mr Schraven and Mrs Fransens, respectively Chairman and Secretary General of EuropeanIssuers, pleaded for a more responsible and a more involved share-ownership as a lesson to learn from the crisis. Mr Longin and Mr Fichtinger, respectively Chairman and Managing Director of Aktienforum, focused on the need for more concrete and supportive measures for the real economy.

For the pictures of the event, click here.
For the speech of Mr. Schraven, click here.
For the speech of Mr. Longin, click here.
For the speech of Mrs. Fransens, click here.
For the press release, click here.

General Meetings Market Standards
The public consultation on General Meetings Market Standards ran from 2 December 2008 until mid February. The Joint Working Group on General Meetings (JWGGM) received some 40 replies from various sectors: Following the request made by several market participants, the JWGGM significantly expanded to involve investors, UK representatives and more intermediaries. The market feedback revealed that a number of issues need to be further discussed in order for a consensus to be reached: the communication with the end investor, the cost aspect of the project, the communication through the chain of intermediaries, the concept of a unique proof of entitlement, etc. The JWGGM intends to finalise the standard setting before the summer break. The following phases will be endorsement, implementation plan, monitoring compliance, all of which are still under discussion by the JWGGM.

For the Consultation and its responses, click here.

Corporate Actions Market Standards
The Corporate Actions Joint Working Group (CAJWG) is currently finalising its revision of the standards taking into account responses from the market to the public consultation. The following phase will be the endorsement, which is intended to take place in June. An industry workshop is planned in order to rally support. At a recent meeting of the CAJWG, delegates from EuropeanIssuers expressed the wish that an observatory should be put in place to monitor the positive effects, i.e. cost savings, that the standards would have once implemented. Transparency is needed in the area of pricing in order to ensure that the cost benefits of this standardisation exercise flow back to the issuers and their shareholders. The proposed standards cover Distributions and Reorganisations as well as related Transaction Management (Market Claims, Transformations and Buyer Protection).

For the Consultation Document, click here.

Harmonisation of Securities Law – COM Consultation
Following the Legal Certainty Group 2nd Advice of August 2008 regarding the dismantling of the “Giovannini Barriers”, the Commission decided to study the possibility to take legislative measures for a harmonised legal framework for intermediated securities. The Commission is currently undertaking an impact assessment to that end. It has now launched a market consultation in which it seeks the views of shareholders on a possible legislative initiative. The future legislation, if any, would address the following issues:
- Legal framework for the holding and disposition of securities held in securities accounts
- Legal framework for the exercise of investors’ rights flowing from securities through a chain of intermediaries
- Establishment of a free EU wide choice for issuers for the initial entry of their securities in an account with a CSD.
- A supervisory regime on the activity of safekeeping and administration of securities.
The legislative proposal, if decided by the Commission, will be issued by the end of 2009. It is expected to take the form of a Directive.

The consultation deadline is 11 June 2009. For more details, click here.

Target2Securities – Request for an Issuers' subgroup on Target2Securities
The Eurosystem organised a conference on 11 March in Brussels to explain the impact of T2S for issuers and their agents. The event also served to explore the opportunities in such areas as shareholder visibility and the efficient execution of corporate actions by issuers and their agents. There were contributions from the ECB, issuers, their agents and the European Commission. Secretary General Dorien Fransens gave a presentation on “shareholder visibility”. Participants had a frank and constructive discussion: issuers were unanimous in their request for more shareholder visibility. They asked the Eurosystem to actively involve issuers in the T2S project: a possible subgroup on issuers should be created within T2S. Interested parties are requested to make proposals in writing to the ECB on required developments/functionalities. EuropeanIssuers believes that T2S should facilitate:
a. Shareholder disclosure
b. Implementation of the market standards on General Meetings.

For the presentations of the conference, click here.
For the minutes of the conference, click here.
For the presentation of our Secretary General, click here.

Hedge Funds Oversight – IOSCO Consultation
IOSCO (The International Organisation of Securities Commissions) published a Consultation Report on Hedge Funds Oversight on 19 March 2009. The Report contains preliminary findings and recommended regulatory approaches to mitigate risks associated with the trading and the lack of transparency of hedge funds. It suggests a concerted global regulatory action along with stronger cooperation and information sharing between regulators. It also discusses the regulatory issues presented by hedge funds: systemic risk and conduct of business. The Consultation asks for views on the appropriateness of the recommendations for providing the necessary guidance to regulators in their own jurisdiction while supporting a globally consistent approach.

The IOSCO Consultation deadline is 30 April 2009.
 
For IOSCO’s Consultation Document, click here.

EuropeanIssuers recently issued a position paper on Hedge Funds in reply to a Consultation by the European Commission. In this paper EuropeanIssuers pleads for an international coordination and convergence on the regulation of hedge funds. We also elaborated on the business conduct of hedge funds, its lack of transparency and  the consequences of the behaviour of some hedge funds for the real economy. The lack of interest of some hedge funds in the long-term prosperity of a company is of great concern to issuers.

For EuropeanIssuers position paper dated 11 February 2009, click here.
 
The European Commission organised a High-Level Conference on Private Equity and Hedge Funds in Brussels on 26 and 27 February 2009. Prof. Erik Vermeulen, member of our Legal Committee spoke on behalf of EuropeanIssuers in the panel "Management of Micro-Prudential Risks & Transparency Towards Investors". The conclusions of the conference, together with the results of the public consultation on hedge funds, were fed into the European Commission's review of the adequacy of supervisory and regulatory arrangements for all financial market actors in the context of the financial crisis. A legislative Proposal from the Commission is expected by the end of the month.

For the presentation by Erik Vermeulen, click here.
For the European Commission’s conference details, click here.

Short Selling – IOSCO Consultation
IOSCO published a Report/Consultation on short selling on March 2009.
The Report recommends 4 principles on short selling: the practice of short-selling is proposed to be subject to controls for reducing the potential risks affecting the functioning and stability of financial markets. It should be subject to a reporting regime in order to provide timely information to the market and the authorities. Short-selling should moreover be subject to an effective compliance and enforcement system. Specific regulation should allow exceptions for transactions that provide for efficient market functioning and development. EuropeanIssuers welcomes the regulation on short selling. In our recent position paper addressed to CESR, we defended the idea that permanent rules restricting abusive practices should be introduced. We pleaded for more transparency, enhanced market integrity and coordination.

The IOSCO Consultation deadline is 4 May 2009.

For IOSCO’s Consultation Document, click here.
For EuropeanIssuers’ position paper dated 11 February 2009, click here.

The spring of 2009 came with a considerable number of new regulatory initiatives, many of them brought about by the financial crisis.

The seriousness of the crisis calls for swift measures, hence there was only limited time for EuropeanIssuers to act and react, consult with its members and take stance on the various regulatory proposals. The fact that we issued eight position papers since our last newsletter of February is certainly illustrative of the speed things have been dealt with lately.

While some proposals of these regulations are about to be formally adopted, for instance the proposed regulation on credit rating agencies, others are still in the conceptual phase, for instance the European Commission’s consultation on the possible harmonisation of securities law. I draw your attention in particular to the latter consultation as it will be the basis of a possible future Directive. It will address essential issues for securities issuers such as the choice of location for the securities issuance account, but also the role of custodians in the processing of corporate actions. For sure, an issue to be very closely and actively followed!

Despite the unusually heavy workload, we made time to meet with our members: we had our Annual General Meeting plus a Legal Committee Conference and a Board meeting in Vienna in the first days of April, all meetings kindly hosted by our member Aktienforum. Together we celebrated the anniversary of this Austrian association that can look back at twenty years of successfully promoting the interests of issuers!

Enjoy your reading,

Dorien Fransens
Secretary General

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Calendar



Latest News

20/04/09 – EuropeanIssuers successful in amending the proposed Regulation on CRAs

EuropeanIssuers successfully lobbied some amendments made by the Economic and Monetary Committee (ECON) of the European Parliament to the proposal for a Regulation on Credit Rating Agencies (CRAs).

http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=125

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Comments dated 12 March 2009 on the COM Proposal for a Directive amending the Prospectus Directive and background document of 9 January 2009.
 
EuropeanIssuers:

- Art 2(1)(e): agrees to extend the scope of qualified investors but asks clarification on the kind of placements covered by it;
- Art 3(2): believes that where the issuer is exempted from the obligation to publish a prospectus, he should be exempted also to do so for the subsequent resale by intermediaries;
- Suggests clarification of the meaning of “significant new factors”;
- Asks for a harmonised time frame for the investor’s right to withdraw;
- Advises to raise in a significant manner the threshold that triggers the prospectus obligation for offers;
- Promotes the exemption from the publication of a prospectus for rights issues for existing shareholders with no right for the latter to sell the rights attached to the shares;
- Proposes stricter timelines for notifications by authorities, including a tacit approval of the prospectus.

 

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=176

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COM Consultation control structures in audit firms

Comments dated 6 March 2009 on DG MARKT's Working Paper of December 2008 on control structures in audit firms and their consequences on the audit market.

EuropeanIssuers sees a need for not reducing the current number and structures of the audit firms’ networks, but doubts that changing ownership rules might be effective to that end. Capital is not the main reason causing the concentration on the audit market. Potential barriers to market entry lie in the necessity for audit firms to have:
(a) international coverage;
(b) expertise suited to the size, complexity and diversity of business situations;
(c) a decent number of audit staff and
(d) good reputation as perceived by investors, as users of financial statements.
It is questionable whether the concentration is a problem of supply or of demand in the audit industry. In some instances also the regulation could be one of the causes of oligopoly in the market.

 

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=175

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CESR Consultation non-equity markets transparency

Response dated 5 March 2009 to CESR's Call for evidence of 19 December 2008 on the transparency of non-equity markets.

EuropeanIssuers strongly support the introduction of a regulatory system of post trade transparency on corporate bonds;
In normal market conditions, besides protecting investors and providing them with the opportunity to trade bonds at a lower cost, this system may facilitate a cheaper access to funding for a whole range of issuers;
For some issuers (small, low rated), the transparency regime may even open this opportunity for the first time;
We do not believe that a regulatory system of post trade transparency would have help in any material way to contain, or even prevent, the current financial crisis;
Because of interplay of private and public interest, we do not believe that free market forces may achieve an optimal amount of post trade transparency through self regulation;
We would, then, welcome the introduction of a regulatory system of post trade transparency requirements; the experience of TRACE should be closely looked at as a working basis.

 

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=174

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Calendar

27/04/2009
EcoDa Annual Conference - Brussels
EcoDa's annual conference will focus this year on "The Boardroom's response to the crisis". The conference will be held at the Residence Palace in Brussels from 14h to 18h. For more details contact ecoDa at aida.simil@ecoda.org.

29/04/2009
CAJWG meeting - London
Meeting of the Corporate Actions Joint Working Group, working on the Giovannini private sector barrier 3.

30/04/2009
JWGGM Meeting - London
Meeting of the Joint Working Group on General Meetings, working on the standardisation of General Meeting communications and voting instructions (Giovannini Barrier 3).

07/05/2009
Conference on EU Financial Supervision - Brussels
The European Commission will be holding a high level conference entitled "Towards a new supervisory architecture in Europe”. The conference comes in the framework of the consultation process on the future of EU financial supervision. It shall provide the Commission with suggestions on its policy proposals.
For information about the conference click here.

28/05/2009
28/05 & 29/05 JWGGM Meeting - Brussels
Meeting of the Joint Working Group on General Meetings, working on the standardisation of General Meeting communications and voting instructions (Giovannini Barrier 3).

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