The European Capital Markets Forum was held in London in April for the fourth successful year. Aside from the Aston Martins on display in the forecourt (above), opposite are some of the racy stories that came out of the two days' sessions.

Top to bottom: speakers Simon Bowner of Dresdner Kleinwort, Simon Mansfield of Goldman Sachs, Brad Gans of Citigroup, Tim Babich of Fortelus Capital Management, Andrew Case of Morgan Stanley and Dan Williams of ABN Amro

Every IPO is now a dual track

Corporate lawyers have argued that IPOs and industry sales are converging into dual track offerings because of the booming M&A market.

One panellist said that "every IPO these days effectively becomes a dual track deal". The panel agreed that this is because of the volume of private equity and M&A activity. The sheer volume of deals has meant that every company that is planning an IPO has to consider what happens when it gets an approach from a buyer.

Another panellist said, "many people find themselves in a dual track situation without intending to be. Unexpected offers do come in frequently."

Discussion turned a little lighter later on as the panel amused itself at how fickle companies can be. "Many executives go into the process thinking that the IPO track is the best option, as they consider running a public company to be their ultimate career aim," one panellist said. "It's funny how often they change their mind as soon as they realise the remuneration benefits of being managed by a private equity house."

Chapter 11 unwelcome Europe's bankruptcy codes are best left uncertain, say distressed debt investors. A panel of investors said a US-style Chapter 11 bankruptcy law would be unwelcome in Europe.

Investors have more opportunities with more potential when the law is unclear said the panel. And both investors and bankers agreed that a European chapter 11 was unnecessary. The remarks come at a time when several European states are examining their bankruptcy laws.

"Uncertainty in the law is a good thing. It incentivizes discussion between parties rather than the investors instantly reaching for a chapter 11 settlement," said one investor from a top investment bank.

Another industry insider suggested that in some jurisdictions, such as in Germany, it seemed that the law had been quite deliberately "left open" in order to avoid a chapter 11-type environment.

In US law, chapter 11 provides a bankruptcy gold standard, whereby investors easily invoke the legislation in order to speedily and favourably settle bankruptcy estates. The solid case law and investor-favourable framework amounts to a "brutally efficient" model of settlement said the panel.

US delegates, however, disagreed with their European colleagues. "Chapter 11 is a good thing. It gives certainty and speed. Participants in bankruptcy negotiations need to know the likely outcome of a situation. Not knowing the likely outcome encourages people to take more extreme positions and not to cooperate," said one prominent US investor.

MAD fails over enforcement

A repeat of the Citigroup's summer 2004 bond markets trade would prompt slicker investigation, but problems persist with enforcement, said a panel of financial regulation specialists.

Counsel agreed that implementation of the Market Abuse Directive means mechanisms now exist that would allow European regulators to conduct joint investigations in a more coordinated and coherent fashion.

But the panel thought that there is no evidence of a willingness to challenge problems over issues of legal privilege, the power to settle and the involvement of criminal proceedings.

Such impediments to unified enforcement proceedings reflect the fundamental disparities that exist between regulatory systems based on civil and common law traditions said the panel and more effort was needed at a political level if Europe's different approaches to enforcement are to converge.

The panel told how Citigroup executed a trading strategy on the European government bond markets on August 2 2004, which involved the bank building up and then rapidly exiting from substantial long positions in European government bonds over an hour.

The UK Financial Services Authority eventually fined Citigroup £13.9 million ($26.4 million) for failing to conduct its business with due skill, care and diligence and failing to control its business effectively.

The regulator found the trade caused temporary disruption to the volumes of bonds quoted and traded on the MTS platform, a sharp drop in bond prices and a temporary withdrawal by some participants from quoting on that platform.

FSA shouldn't jump around

Investment funds specialists say the UK Financial Services Authority needs to stop "jumping around the issue" and focus on two particular areas when deciding how to deal with investment entity listings.

The FSA needs to look at the relationships master funds have with their feeders and how responsible master funds should be for their feeder funds; and address the level of disclosure of portfolio information that listed investment entities should reveal.

One of the most pertinent issues that arises is how often the master has to report to investors.

One panellist highlighted the importance of the FSA in taking "a more principles based approach to disclosure".

Discussion had started with a comparison of the London Stock Exchange (LSE) and Euronext, but the debate quickly turned to how the FSA should act.

After an acknowledgment that the FSA has to strike a balance between investor protection and a freer market, the panel said that "although the FSA regards itself as flexible, it still has some learning curves to follow".

The panel found that the London market should be doing more to compete with so-called directive minimum regimes, such as in the Netherlands.

The panel also examined the departure of second-tier listings in the first quarter of 2008, with some panellists expressing disappointment at this as they felt the second-tier listings were serving investment entities well.

Finally, it was decided that the FSA must create an effective single-tier approach to the issue as it outlined in its last consultation paper. But there was a caution from the floor when the debate was opened up to questions.

One delegate warned that it would be unwise to look to the Netherlands as a fair comparison as its market had not suffered a collapse or faced an issue like the split capital trust crisis.

Annet Tamminga of JP Morgan with chairman Christian Parker, Cadwalader	Laura Holleman, Goldman Sachs
Cliff Dammers; Andrew Wilson, Allen & Overy; Kate Craven and Helmut Hofer, Barclays Capital
Shafi Fazaluddin, Goldman Sachs; Tim Plews, Clifford Chance; and Harry Eddis,  Morgan Stanley