European Commission
MARKT G3
Brussels
Copenhagen, 10 March 2009
Review of Prospectus Directive
Danish Shareholders Association, Dansk Aktionærforening, is the organisation representing private investors in Denmark.
General assessment of the Prospectus Directive
Danish Shareholders Association can agree with the preliminary assessment of the functioning of the Prospectus Directive.
We want to stress the importance of achieving a balance between at one hand the need of the investor, i.e. the necessary information presented in an understandable way and at the other hand the need of the issuer, i.e. obligations that are felt acceptable.
Article 2(1)e Definition of qualified investors
We find it important to get rid of the uncertainty that can be attached to the use of different and conflicting terminologies.
We can accept the proposal for Article 2.1(e).
Article 3 – Exempt offers
We agree with the analysis and can agree with the proposed drafting of Article 3.2.
Article 4 – Exemptions for Employee Shares Scheme
We agree with the analysis and can agree with the drafting of Article 4(1).
We want to support the idea of a short document like the “Key Investor Information” document discussed in relation to UCITS IV.
Article 10 – Information
We agree with the analysis. We cannot find objections to the removal of Article 10.
Article 16 – Supplement to the prospectus
We agree with the analysis and can agree with the proposed drafting of Article 16.2.
Modification of thresholds
We can agree with the analysis and can agree with the proposed drafting of Article 1(1)(m)(ii).
Disclosure obligations: the prospectus and its summary
and
Disclosure obligations for retail investment products
It is our impression that many from banks and investment firms have not used the prospectus when talking with private investors (consumers) seeking advice. The private investors have been givenrecommendationsor sales talks by the sales person.
A reason might be that the sales persons have not had the qualifications necessary to understand and explain the content of the prospectus. Many private investors - not knowing the value of the prospectus – have accepted this lack of information.
A short “Key Investor Information” document could be very helpful in addition to the prospectus. The KII should stress the uncertainty and risks related to the investment and written so that all sales persons and most private investors can understand the information.
Disclosure obligations for small quoted companies
We do not like the idea of reducing the amount of information, but the threshold could be raised.
Disclosure requirements and Government Guarantee Schemes
The government guarantee schemes are fine contributions to the market in these difficult times of financial crisis. But it is difficult for private investors to understand exactly what is guaranteed at home and even more difficult to understand what is covered in other member states.
It is of no use to require information about the economic situation of governments but it is very important to disclose precise and understandable information to investors about the guarantee: What is guaranteed and when does the guarantee expire.
Rights issues
We agree with the analysis.
The “Key Investor Information” approach could be considered in this situation as well.
Article 2(1)d – Definition of offer of securities to the public
We agree with the analysis.
Liability
We agree with the analysis but would like to stress that the question should be followed.
When liability differs too much will it become an invitation to look for “liability heavens”.
Equal treatment of shareholders
We agree with the analysis but want to stress that shareholders rights do deserve more attention. The losses investors have had during the financial crisis has drawn attention to the way in which the management and the elected board in some companies behave as if the small investor has no rights.
Kind regards
Charlotte Lindholm
Director
Danish Shareholders Association
E-mail:
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