New regulations will strengthen capital market watchdog’s role

The new chairman of the Capital Market Commission (CMC), Alexis Pilavios, will find a full agenda upon his confirmation, by the Parliament’s economic affairs committee, next week. Pilavios’s top priorities include: the new Athens Stock Exchange (ASE) regulations; applying the capital market code; setting up new social security funds for ASE members; implementing European Union regulations on transparency rules and capital market prospectuses; and applying the International Accounting Standards (IAS) to all listed firms. There is already a great delay in implementing the new stock market regulations. Despite the fact that the ASE authorities circulated a draft months ago, it has not been formally submitted to the CMC for approval yet. There are several issues to be resolved, such as objections by stockbrokers to what they consider an excessive number of stock categories and the incentives to be given to certain firms to delist themselves. The application of the capital market code will open a new era for the ASE. At present, all the several past laws governing the stock market have been studied and are being codified in order to arrive at a single text free of ambiguities and conflicting provisions. The new code will resolve the issue of overlapping monitoring authorities and will make the CMC the single authority over ASE operations. Concerning international developments, the Committee of European Securities Regulators (CESR) is already at work preparing the so-called «guidelines for the consistent implementation of the proposed (European) Commission regulation on prospectuses.» It has imposed a mid-April deadline for responses to a call for evidence on the subject. The Commission directive on prospectuses and its supplementary regulations specifies a single form for European markets’ prospectuses. Submission of this particular form would enable all European companies to be listed in any European market without having to secure a local regulator’s approval. This not only minimizes the time, and cost, of listing a company in more than one market but allows investors to receive standardized and, presumably, accurate information which will make it easy to compare the stocks of all European companies. CESR also recently submitted to the CMC, after extensive consultation with capital market actors, proposals for the kind of information, as well as any advertisements for a company’s stock, these prospectuses should include. The CESR proposals concern what kind of company stock tables and historical financial data must be included in the prospectus. It also suggests penalties for false advertising and accepts suggestions made during the review stage on including different requirements in the prospectuses for shares in international public utilities. CESR said these should be treated more like Treasury bonds and bills because they pose similar risks, even though they are shares.

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