The Common Market Prospectus

Abstract

Despite the rapid internationalization of the global securities market, regulatory disharmony has been a persistent obstacle to multi-jurisdictional offerings. However, the increased demand for comparable information in the analysis of investment risk necessary to the allocation of assets has facilitated a convergence between market enhancement and market integrity. The process of federalism in the European Communities (EC) has strengthened this will to harmonize, with Member States recognizing the necessity for reducing obstacles to the development of a single European capital market. The article addresses the EC’s major initiatives toward the achievement of regional regulatory harmony for multi-jurisdictional securities offerings. Specifically, this article describes the EC’s two major directives, which establish a mandatory disclosure regime for public offerings of securities, the Listing Particulars Directive and the Public Offer Prospectus Directive. These two directives, when implemented by the EC’s Member States, may result in a “common market prospectus,” which can be used in Member States, subject to minimal additional disclosure requirements. This article concludes that the EC, in seeking to establish a common market prospectus, has become the major force for global harmony in the field of securities regulation.