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Greece

The Ministry of National Economy has unveiled draft legislation setting out the framework for corporate bonds and securitization operations. The purpose of the new rules is to modernize existing legislation on bond issuance and provide Greek companies with new sources of funding. While the government itself has made some use of securitization in recent years, existing legal rules are quite unfavourable, as far as corporates are concerned. The draft attempts to correct this situation by providing a new set of regulations on the issuance of bonds backed by assets, including real estate and monetary claims against third parties, by Greek societe anonymes, as well as some necessary tax relief. New rules on issuing bonds are also proposed, at a time when the use of debt as a means of raising capital is being encouraged by the Athens Exchange and the Ministry of National Economy. It will become possible to issue bonds following a decision to do so by a company's board of directors, rather than needing a shareholders' decision as before.

Another draft law unveiled for discussion would mean the Athens Stock Exchange handing over its regulatory powers to the Capital Market Commission, which would become the sole regulator for the market. The Athens Exchange, which the state aims to privatize within the next couple of months, will be required to operate solely on private terms. It is felt that its private status would conflict with its existing powers to approve prospectuses and issue various official regulations published in the Government Gazette.

Transferring these powers to the administrative supervisory authority (the CMC) is also in line with EU developments on the same subject, as proven by the recent Prospectus Directive. The same draft contains provisions for licensing and establishing in Greece new exchanges and organized markets for securities and derivatives. This signals the end of the quasi-monopoly that the Athens Exchange has enjoyed so far. The proposed legislation will also mean changes in listing procedures in general, whereby there will be greater involvement of the CMC, but the decision for listing will remain with the relevant exchange.

International Accounting Standards

The Ministry of National Economy has announced that companies listed on the Athens Exchange will be required to use International Accounting Standards (IAS) for their quarterly financial statements in 2004, instead of 2003, though full-year accounts will still need to be drawn up in IAS starting from 2003. This change underscores the difficulties faced by local firms in implementing the new accounting practices by the original date.

Last year, the government passed legislation ordering the use of IAS by quoted companies with effect from 2003, two years ahead of a date set by the European Commission for EU-listed companies. The decision was intended to improve market transparency and ease the comparison of local companies with foreign firms. The IAS requirement will apply to annual financial statements ending on December 31 2003, and thereafter, and to quarterly statements in the subsequent year. Companies will therefore have to keep two different sets of books in 2003, one under Greek accounting principles and the other in accordance with IAS.

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