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Following the recent turbulence in the financial markets, not only in the aftermath of the so-called credit crunch but also, among others, the notable insider trading and general disorder in one of Sweden's largest investment banks, the Swedish Financial Supervisory Authority (SFSA) has picked up some momentum and is becoming increasingly tough in its role as market watcher.

It is difficult to describe the past few months without using vivid terms. We are experiencing a worldwide financial panic that was spawned in the US sub-prime mortgage-backed securities market and spread due to a lack of market confidence in the valuation of those, and subsequently other, residential mortgage-backed securities, structured securities and collateralised debt obligations. This problem has been exacerbated by the proliferation of investments in structured instruments that were not fully understood by some of the investors and by the implementation of mark-to-market (fair value) accounting (FAS 157), which treats paper losses as though they were real losses.

Following the launch of Catalist on November 26 2007, to date only a handful of Catalist companies have taken steps to appoint a continuing sponsor, whose primary responsibilities comprise the rendering of advice to the Catalist companies on rule compliance.

The issuer must prepare a prospectus in accordance with guidelines set out by the LuxSE or the Commission de Surveillance du Secteur Financier (CSSF). If listing on the EU regulated market, the issuer must comply with the new Prospectus Law requirements and obtain approval of the prospectus from the CSSF. If listing on the Euro MTF, the issuer will not have to comply strictly with the Prospectus Law but will still have to provide information about the company, its management, its business strategy, risk profile and financials, among other things. In essence, the same information is required but with less detail.

The legal framework for the mortgage covered bonds and public sector covered bonds set forth in Decree-Law 59/2006 of March 20 2006 (DL 59/2006) came into force on March 27 2006 but it was not until June 2008 that the first Public Sector Covered Bonds (PSCBs) programme was established in Portugal, with other programmes of the same nature expected to follow in the near future.

In Austria, the government has announced its intention to amend the Austrian Stock Exchange Act (BörseG) in order to create a legal framework for an outright prohibition of short selling, even if only for a limited period of time. The first plenary session of the newly elected Austrian parliament is scheduled to take place on October 28 2008. Therefore, the intended amendments cannot be enacted before such date. No draft or any further details of the proposed changes to the law have been published yet.

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Change attitudes, rather than reform the law

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