Germany will today press other European Union governments to relax controversial proposals aimed at creating an EU-wide market for securities by 2003.
The German government wants to change the proposed rules, which would help companies to raise capital across Europe with a single document, to allow companies complete freedom in their choice of regulators. Berlin's proposal, backed by the UK, could prompt large firms to choose to be regulated in the main financial centres, such as London or Frankfurt, where their shares are listed.
Europe's banks and the European Parliament, which support the German move, say some regulators are more competent than others to regulate equities and bonds. But states with smaller markets, such as Ireland, France and Italy, stand to lose their powers to regulate domestic companies.
Under the current proposals, still needing approval by EU governments and the Parliament, companies listing shares on a stock market would be regulated by the authority of their home state. The same would apply to a company issuing bonds below €50,000.
Once the main document for the listing, or "prospectus", has been approved by the domestic regulators, authorities in other EU states, including the one where the shares are listed, would not be able to impose their own rules. However, Germany wants companies to choose whether they should be regulated by their home state authority or the regulator of the state where they are listed, or the one where the offer is made.- (Financial Times Service)
