Exchanges prepare to deregulate to protect Eurobond business

Author: | Published: 1 Apr 2005

The stock exchanges in London and Luxembourg have struck back in their battle with non-EU exchanges over who will dominate Eurobond listings once the EU's Prospectus Directive takes effect on July 1.

Last month, each unveiled its strategy to deal with competition from rival exchanges, several of which aim to attract non-EU issuers by offering them a chance to avoid the demands imposed by new EU regulation.

Both London and Luxembourg propose to sidestep the parts of the Prospectus Directive that are unappealing to issuers but are taking different views on how to do so. Who has the winning approach is so far unclear.

The stakes are high, with many issuers intent on avoiding the Prospectus Directive and its requirement for an expensive retail-style prospectus for all bond deals with denominations of less than €5,000. At the same time, the EU's Transparency Directive will, from 2006, require even foreign issuers to report under international accounting...