A road paved with good intentions

Author: | Published: 11 Jul 2011

The main purpose of EU Prospectus Directive 2003/71/EU was to make investment capital accessible on an EU-wide basis. Any barriers to the creation of a large, liquid and integrated EU capital market which were discouraging issuers to tap into, and investors from investing in, such a market were to be removed.

Thereby, market efficiency would be increased and the costs of raising capital would come down. Investors could access a wide range of competing investment opportunities and benefit from state-of-the-art investor protection regulation and high transparency standards.

As a large part of the public seeking to invest is made-up of retail investors, the EU Prospectus Directive is directly concerned with the retail debt capital market, which in Germany is a market with an estimated volume of €110 billion ($159 billion). The production of retail debt capital market products depends on the proper and cost-efficient functioning of debt issuance...