Prospectus directive two years on – success or nul point ?

Tamsin Nicholds, Lovells LLP

The European Commission is required under the terms of the Prospectus Directive to review the operation of the Directive by the end of 2008. This process has already started. In June of this year the Committee of European Securities Regulators (CESR) published its report on the supervisory functioning of the Prospectus Directive and the Prospectus Regulation. That was followed in September by the European Securities Markets Expert Group (ESME). The combined view is that the Prospectus Directive is a valuable tool – ‘the [Directive] and [Regulation] have become a cornerstone of European securities markets – only two years after implementation’ and is ‘a milestone in the construction of a single European securities market’, but that changes will need to be made. Some of the necessary changes are of detail, but some are more fundamental and will allow the Prospectus Directive to continue to reflect the way in which the securities markets operate.