Institutional Investors - Stewardship Code

The UK Financial Reporting Council (FRC) launched a Consultation on a Stewardship Code for Institutional Investors. The Walker Review of 11 September 2009 recommended that the Code on Responsibilities of Institutional Investors, prepared by the Institutional Shareholders' Committee, should be ratified by the FRC and should operate as a Stewardship Code. The FRC is seeking views on the contents of the Code, its scope of application and the costs and benefits. The FRC is also welcoming comments from abroad.

For the Consultation on a Stewardship Code, click here.
For the Walker Review webpage, click here.

Shareholder Transparency - Target2Securities

A new Task Force has been set up to look at solutions for shareholder transparency within Target2Securities (T2S), the project of the Eurosystem for a single platform for securities settlement. The T2S Advisory Group (AG) approved the mandate of the new Task Force on Friday 15 January.

This initiative follows several requests by issuers and issuer agents which culminated in a joint paper submitted to the ECB on 1 December 2009. The paper proposed for routing holding data through T2S as well as some ideas on the legal framework needed to support the practical solution. It was presented at the T2S Advisory Group meeting of 9 December 2009 by our Secretary General on behalf of the issuer associations and issuer agents involved in the ECB submission.

The Task Force will involve issuers, CSDs, the European Commission and users. Its mission is to analyse shareholder visibility in view of fostering market harmonisation and European integration. The analysis should be neutral and open, not necessarily presuming that T2S will be the solution to the problem. The new Task Force shall formulate proposals to the AG by September 2010.

The Task Force will be chaired by a senior member of T2S, Paul Bodart, Executive Vice President at Bank of New York Mellon. The chairman will nominate the members of the Task Force. EuropeanIssuers proposed several experts from different geographical and professional backgrounds.

For the mandate of the Task Force, click here.
For EuropeanIssuers' letter proposing candidates, click here and here.
For the joint paper submitted by issuers and issuer agents, click here.
For the presentation by our Secretary General to the T2S AG, click here.

General Meetings Market Standards

All relevant EU associations endorsed the market standards dated October 2009, except the European Credit Sectors Associations (ECSAs), who stated that they could not endorse the standards as yet. The Joint Working Group General Meetings (JWGGM) discussed the situation at a recent meeting: a detailed analysis of the banks’ arguments led to a list of proposed solutions, including a fact finding exercise and the drafting of Frequently Asked Questions (FAQ). The ECSAs will consider whether they can endorse the standards on this basis by 23 February. If so, the JWGGM can move to the next phases, namely the local market gap analysis and implementation, the methodology of which yet need to be defined by the working group.

For more information on the General Meetings Market Standards, click here.

MiFID

The Commission is consulting stakeholders in view of the Markets in Financial Instruments Directive (MiFID) revision foreseen for 2010. The consultations are divided by topic: transparency for non equity markets, dark pools and waivers, crossing networks and data consolidation.
For EuropeanIssuers' previous position papers on MiFID, click here.
For the Commission’s Communication on OTC derivatives markets, click here.

EU Securities Small Business Act

The French Government is currently studying measures to propose to the European Commission in order to alleviate listing obligations for smaller issuers. The measures will be based on a study to which EuropeanIssuers contributed. In this context the definition of a smaller issuer should be based on market capitalisation related criteria instead of the criteria used to define a SME. EuropeanIssuers suggested various measures to reduce obligations for smaller issuers under the Prospectus Directive, the Transparency Directive, the Market Abuse Directive, etc. The French Government is expected to propose its measures shortly.

Internal Governance

The European Level 3 Committees which supervise Securities, Banking and Insurance have launched a call for evidence on cross-sector internal governance issues. The Consultation focuses on the management of conflicts of interest; policies, processes and procedures related to the risks covered by risk management systems; independence of risk management; compliance and internal audit functions and supervisory review process. EuropeanIssuers issued recently its position paper “Towards Common Principles for Internal Control & Risk Management Systems at Listed Companies in Europe”, which is sent to all the Level 3 Committees as our response to this Consultation.

For the call for evidence, click here.
For EuropeanIssuers’ position paper, click here.

Prospectus

In the context of the Proposal for a Directive amending the Prospectus Directive dated 24 September 2009, a EuropeanIssuers delegation met with the Member of Parliament Wolf Klinz, the Rapporteur for this Proposal for the Economic and Monetary Affairs Committee (ECON). The amendments to the Report will be done by end February and a vote by ECON is to take place on 23 March.

For EuropeanIssuers’ position paper, click here.
For EuropeanIssuers’ press release, click here.
For the Proposal for a Directive, click here.

Our first newsletter of 2010 coincides with an important event – the formal arrival of Barroso II! The agenda of the new DG for Internal Market and Services will presumably include regulatory proposals on the revision of the market abuse (MAD) and markets in financial instruments (MiFID) regimes, transparency for listed companies, book entry securities (future SLD), short selling, financial supervision, clearing and settlement institutions (future EMIL), OTC derivatives and remuneration of directors. Most of these topics are household names with EuropeanIssuers as you will see in this newsletter.

EuropeanIssuers' “wishlist” for the new Commission:
- an efficient EU wide system for cross border voting and shareholder identification;
- a framework for rewarding long term and responsible shareholdership;
- an adapted regulatory regime for smaller listed companies.

Finally, we are very pleased that our longstanding plea for shareholder identification led to the setting up of a new Task Force on Shareholder Transparency within the context of T2S.

Enjoy your reading,

Dorien Fransens
Secretary General

Latest News
Latest Positions
Works in Progress
Calendar
Presentations & Speeches



Latest News

10 Feb. 2010 – New European Commission Takes Office

The new Commission formally took office today after yesterday’s approbation of the 26 candidates by the European Parliament and written approval by national Governments. The Barroso II team is still to be sworn into office by the European Court of Justice.

http://www.europeanissuers.eu/en/?inc=page&pageid=news,newsflash&id=183

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Letter dated 29 Jan. 2010 to the European Central Bank proposing candidates for the new Target2Securities Task Force on Shareholder Transparency.

For the Addendum, click here.

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=201

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Internal Control & Risk Management

Position paper entitled “Towards Common Principles for Internal Control & Risk Management Systems at Listed Companies in Europe” dated 26 Jan. 2010

In the context of article 41(2)(b) of the “Audit Directive”, EuropeanIssuers states that

– the EU approach, with public information on financial reporting systems being merely a description summary, is favoured over the US approach
– any ICRM systems should take the specific characteristics of the company into account; companies have the flexibility whether to have an audit committee and an internal audit department
– the overall monitoring by the audit committee is an oversight function looking either at ICRM systems globally or at ICRM systems related only to financial reporting, in accordance with a Board decision, national corporate governance codes or national legislation
– ICRM is a shared responsibility, not limited to the Board and Audit Committee

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=200

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Market Standards on General Meetings - Endorsement

Letter dated 20 Jan. 2010 endorsing the Market Standards on General Meetings of 30 Oct. 2009

EuropeanIssuers fully endorses the Market Standards on General Meetings, underlining:

- the importance of continuation of the standardised communication down to the level of the end shareholder
- that the communication of the meeting notice and of the entitlement should be a standard part of custody services and a mechanism to ensure pricing transparency should be implemented
- that the timeliness of communication is essential and straight through processing should become the norm

http://www.europeanissuers.eu/en/?inc=page&pageid=positions&id=199

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Calendar

02/03/2010
CESAME II group meeting – Brussels
The fifth meeting of the CESAME2 Group will take place at the Albert Borshette Conference Centre. Our Secretary General is a member of the group and will attend the meeting.

08/03/2010
JWGGM – Brussels
On 8 March a subgroup of the Joint Working Group General Meetings (JWGGM) will meet to draft the Frequently Asked Questions (FAQ). This meeting is subject to confirmation.

15/03/2010
JWGGM – Frankfurt
On 15 March, the Joint Working Group General Meetings (JWGGM) will meet in Frankfurt. This meeting is still to be confirmed.

24/03/2010
T2S Info Session – Paris
The next T2S Info Session will be held on 24 March in the premises of the French Banking Federation (FBF) in Paris from 9.30 am to 4 pm. Our Secretary General will attend.

25/03/2010
2010 ICGN Conference 24 & 25 March – London
The ICGN 2010 "Mid-year" Conference will be held on 24 and 25 March in the City of London at the Guildhall. Mr Jacques Schraven, EuropeanIssuers' Chairman, will give a presentation. The working title is: "Will shareholders rise to the ownership challenge?". For the draft program, click here.

16/04/2010
EuropeanIssuers AGM 2010, Nicosia – Cyprus
This year EuropeanIssuers will hold its General Assembly in Nicosia, Cyprus, kindly hosted by SYDEK, the Cyprus Association of Public Listed Companies.

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Presentations & Speeches

Emisores Españoles – 9 Feb. 2010 – Madrid
The public presentation of the Emisores Españoles (Spanish Issuers) took place in the premises of the Madrid Stock Exchange. Our Secretary General gave a presentation on the activities of EuropeanIssuers. For the presentation, click here. For the summary in Spanish, circulated among attendees, click here.

ECIIA Management Board – 22 Jan. 2010 – Brussels
EuropeanIssuers’ Secretary General gave a presentation on the works of EuropeanIssuers to the Management Board of the European Confederation of Institutes of Internal Auditing (ECIIA). For the presentation, click here.

ICSA Forum - 19 Jan. 2010 – London
Our Secretary General gave a presentation on the activities of EuropeanIssuers at the ICSA forum that was held in London.

Meeting with the GC100 UK – 12 Jan. 2010 – London
Our Secretary General gave a presentation on the works of EuropeanIssuers to the GC100 UK (General Counsel of the FTSE 100) in London. For the presentation, click here.

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