News
BackIt is only a few months since the public sector was urgently required to rescue the financial sector with hundreds of million Euros bailout money. Many small investors lost their savings, because they were not, or not adequately informed about the risk of the financial investments, they put their money into. This week, the Economic Committee of the European Parliament voted on a review of the so-called Prospectus Directive, hence the documents, which are supposed to inform investors about the specific risks of the respective investment. The result of the vote: the needs of small investors are hardly taken into account.
AK EUROPA had already drawn attention to the necessary changes of the Prospectus Directive ahead of the vote. They include among others:
The MEPs now agreed in their vote that a prospectus only had to be published in the language, in which it was originally written. Whether the average investor has sufficient knowledge of the English terminology to completely understand the contents of such prospectuses is open to question. The obligatory issue of a prospectus to potential investors is no longer a requirement.
A summary shall provide the investor with all important information he needs to make an investment decision. The financial intermediary, who submits this summary, is also liable for the information contained therein, even if information details are missing.
Apart from that, the MEPs of the Economic Committee in the European Parliament regard it apparently not as necessary to increase the transparency of the information for investors: The publication of the prospectus, as proposed by AK EUROPA, on a central website will probably not happen.
The result of the vote shows that the European Parliament is now back to normal. The influential MEPs with close industrial ties (about 60 percent of MEPs belong to a business-focussed fraction) once again do business as usual and unfortunately only consider the concerns of the consumers in exceptional cases.
Further Information:
AK position paper on the proposal of the European Commission on the amendment of the Prospectus Directive
- to make capital market prospectuses also available in the language of the member country, in which the securities are sold;
- to create more effective liability provisions;
- to make the issue of capital market prospectuses to investors compulsory;
- to make all prospectuses available in all member countries on a centrally created joint website.
The MEPs now agreed in their vote that a prospectus only had to be published in the language, in which it was originally written. Whether the average investor has sufficient knowledge of the English terminology to completely understand the contents of such prospectuses is open to question. The obligatory issue of a prospectus to potential investors is no longer a requirement.
A summary shall provide the investor with all important information he needs to make an investment decision. The financial intermediary, who submits this summary, is also liable for the information contained therein, even if information details are missing.
Apart from that, the MEPs of the Economic Committee in the European Parliament regard it apparently not as necessary to increase the transparency of the information for investors: The publication of the prospectus, as proposed by AK EUROPA, on a central website will probably not happen.
The result of the vote shows that the European Parliament is now back to normal. The influential MEPs with close industrial ties (about 60 percent of MEPs belong to a business-focussed fraction) once again do business as usual and unfortunately only consider the concerns of the consumers in exceptional cases.
Further Information:
AK position paper on the proposal of the European Commission on the amendment of the Prospectus Directive