40 Pages Posted: 27 Apr 2007 Last revised: 13 Feb 2015
Date Written: October 1, 2008
In 1999 the European Commission launched an ambitious plan to integrate EU financial markets through law: the Financial Services Action Plan (the FSAP). The FSAP, which mainly focused on financial services, securities regulation and company law issues, was implemented in the following five years through a steady flow of new European Community (EC) legislative measures. These include harmonization measures in core securities regulation matters, such as securities offerings, insider trading and market manipulation, takeover bids, and mandatory disclosure. The main purpose of the FSAP was to provide the legal bedrock for EU financial markets' integration through uniform rules that, while providing a high level of investor protection, at the same time lower the costs that otherwise stem from the joint application of differing Member States' regimes to cross-border transactions. To reduce these costs two non-alternative and possibly complementary strategies are available: harmonization of substantive rules across the EU and harmonization of conflict of laws rules so as to avoid the joint application of more than one regime to the same cross-border transaction (the multiple-jurisdiction problem).
This paper attempts to assess whether the post-FSAP regulatory framework within the EU has achieved its goals in terms of uniformity and solution of the multiple-jurisdiction problem. The paper provides a taxonomy of harmonization measures: as to their content, they may be categorized as relating to either substantive rules or conflict of laws rules; as to their scope, they can be either comprehensive or partial; as to their nature, they can be either mandatory or optional; finally, from the point of view of their relationship with national laws, harmonization measures can be either minimum or maximum. Effective uniformity can only be achieved through substantive law harmonization measures that are comprehensive, maximum, leaving no room for options at the Member State level. The multiple-jurisdiction problem is solved if the law always identifies one and only one applicable law to any cross-border transaction, with no additional requirements applying in other jurisdictions. The paper describes the main policy and harmonization choices made by the EC in the implementation of the FSAP, by looking at four of the main measures adopted by the EC between 2003 and 2004: the Prospectus Directive, the Market Abuse Directive, the Takeover Bids Directive and the Transparency Directive. The paper argues that uniformity in EU securities regulation, while reasonably greater than prior to the implementation of the FSAP, is still an unachieved goal: hence, the transaction costs stemming from the diversity of legal regimes and from their simultaneous application to some cross-border transactions have reduced, but are still far from negligible. The paper concludes by arguing that a crucial role in this post-FSAP era will be played by CESR, which is in charge of two vital tasks mandated by the Lamfalussy process: implementation and enforcement. Effective implementation, supervisory convergence and effective enforcement of Member States' obligations will ultimately determine the success of this period of reforms.
Keywords: Securities Regulation, EC, Financial Services Action Plan, Prospectus Directive, Market Abuse Directive, Takeover Bids Directive, Transparency Directive, Conflict of Laws, Harmonization
JEL Classification: G18, G34, G38, K22
Suggested Citation: Suggested Citation
Enriques, Luca and Gatti, Matteo, Is There a Uniform EU Securities Law After the Financial Services Action Plan? (October 1, 2008). Stanford Journal of Law, Business, and Finance, Vol. 14, No. 1, 2008. Available at SSRN: https://ssrn.com/abstract=982282
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