Press Release: Financial services: Consultation confirms national divergence hinders cross-border private placement

The European Commission has published a summary of the 38 responses it received to a call for evidence regarding the functioning in EU Member States of private placement regimes (see IP/07/523). Under private placement securities can be sold privately to expert investors without triggering rules on investor protection, reporting and disclosures that apply when instruments are sold to the retail public. Respondents recognise serious problems in the cross-border distribution of some types of investment products, in particular non-harmonised investment funds. Respondents note that the arrangements established under the Prospectus Directive work well for securities and closed-end funds. Responses suggest that these arrangements should be extended to non-harmonised open-ended funds – such as institutional funds and hedge funds. The responses represent a valuable input to the Commission's assessment on the need and potential options for a European private placement regime scheduled for spring 2008.