After ESMA forwarded the outcome of the various consultations on the specification of the new European Prospectus Regulation, the EU Commission has recently launched a consultation for a draft delegated Regulation. The draft Level 2 Regulation contains details on the format, content as well as scrutiny and approval of the prospectus. Deutsches Aktieninstitut has responded to the consultation and also reminded in its response that the objective of the reform of the EU prospectus regime was to ...

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Deutsche Aktieninstitut and BDI are concerned about the European Commission's proposal to grant ESMA the power for scrutiny and approval of certain prospectuses. For this reason, they approached the various MEPs together with a position paper before the vote of the EU Parliament. It outlines the importance of maintaining the competences of the National Competent Authorities in this context. Otherwise it is to be feared that via such a transferal of competences, the professional debt market in ...

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In its proposal for a review of the EU supervisory architecture, the EU Commission significantely extends competences of the European Securities and Markets Authority (ESMA). In its position paper Deutsches Aktieninstitut compares the currently discussed EU Parliament`s draft report with the EU Commission proposal. Whilst we recognize improvements as to accountability and control of EU Supervisory Authorities by the EU legislator as well as stakeholders, the draft report ...

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Regarding the consultation on the ESMA Guidelines on presentation of risk factors in the prospectus Deutsches Aktieninstitut points out the right balance between the objective of ESMA to avoid overly generic/lengthy descriptions of risk factors and flexibility for issuers in their assessment of relevant risk factors to be included in the prospectus. Proportionality and coherence are key factors for guidance on risk factors. For instance, the requirement for specificity should not result in the ...

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In its response to the consultation on draft RTS, concretizing the new European Prospectus Regulation in more detail, Deutsches Aktieninstitut stresses the importance of more flexibility in drawing up prospectuses. For instance, Deutsches Aktieninstitut opposes to a fixed number of KFI (Key Financial Information) and APMs (Alternative Performance Measures) in the prospectus summary. Such a restriction is neither necessary nor useful. The 7-page limit foreseen for the summary by the new ...

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In its letter to the German Federal Ministry for Finance (BMF), Deutsches Aktieninstitut recommends to refrain from introducing any national restrictions to the prospectus exceptions provided under the new European Prospectus Regulation. The legislative proposal of the BMF foresees a liability-relevant securities information sheet in the context of a EU prospectus exception that is designed to facilitate market access for SMEs. From the point of view of Deutsches Aktieninstitut, this securities ...

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From the point of view of Deutsches Aktieninstitut, the proposal of the EU Commission disproportionately extends the competences of the European Securities and Markets Authority (ESMA) without sufficiently addressing the issue of improving ESMA`s governance. Corporate interests also need to be more reflected in ESMA`s activities to ensure that the rules adopted are close to practice. Finally, we also see critical plans to change the financing of ESMA which would further decrease democratic ...

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Deutsches Aktieninstitut urges the EU Commission to reflect consequently the needs of companies seeking capital market finance and using derivates for risk management purposes in the Capital Markets Union. The current direction of the Capital Market Union still fails to meet this objective. This position paper has been contributed to the mid term review of the Capital Market Union project.

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In order to promote public equity financing and equity culture in Germany Deutsches Aktieninstitut suggests to implement the recommandations developed by the round table initiated by the economics minister Gabriel as soon as possible.

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Regarding the consultation of the Prospectus Directive, Deutsches Aktieninstitut recommends to facilitate the prospectus regime, especially with regard to prospectuses concerning so called secondary issuances. In our view, in the case of secondary issuances it is not necessary to mention in a prospectus what has already been published due to obligations of other provisions such as the Transparency Directive and is therefore accessible for anyone.

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ESMA consults on standards for the approval and publication of prospectuses, their advertisement and the incorporation of external information by reference. Among other issues the drafted Regulatory Technical Standards would limit the documents being able to be incorporated by reference and raise high legal burdens on the advertisement regarding the issuance of securities. Deutsches Aktieninsitut urges ESMA to stay within its mandate which does not encompass these powers.

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The European Securities Regulator ESMA has become more and more important for issues of accouting and the enforcment of financial information. This may result in a widening of the scope of the enforcement of companies' accounts. The proposed ESMA Guidelines on enforcement of July 2013 appear to work in this direction. Deutsches Aktieninstitut's position paper raises concerns about a number of aspects of the proposal that counter the efficient German system of enforcement.

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With this position paper Deutsches Aktieninstitut contributes to ESMA’s consultation on “Draft Regulatory Technical Standards on specific situations that require the publication of a supplement to the prospectus”. ESMA's proposals on supplements to prospectuses contractict the wording and the objective of the Prospectus Directive and Regulation. As a consequence, the issuance of debt securities will likely be more complicated without improving investor protection.

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06.01.2012

Response of Deutsches Aktieninstitut to ESMA - Retail Cascade