January 2009
The Effect of Short-selling Restrictions on Liquidity: Evidence from the London Stock Exchange
The London Stock Exchange commissioned research by Capital Markets CRC Limited on the effect of FSA's short selling prohibition on market quality. The research compared those FTSE 100 companies that are subject to the prohibition, against a control sample of those FTSE 100 securities that are not within the scope of the prohibition. The research indicated that market quality (defined as price volatility and liquidity) was reduced in the affected stocks in the period following the ban.
October 2008
Response to HM Treasury's consultation on amendments to Part 7 of the Companies Act 1989
We support the changes proposed in this consultation. We agree that the measures proposed to enhance and support central counterparty clearing, which is a key element of Part 7, are crucial for what is recognised as a vital element of market infrastructure; helping to guarantee transactions and produce efficiencies of risk management. We encourage Treasury to implement these changes as soon as possible, but we also make the point that Treasury's changes do not go far enough. Recent experience suggests that a fundamental review of default arrangements for the UK markets in all instruments is required.
Response to HM Treasury's consultation on the extension of the statutory regime for issuer liability.
The Exchange has responded to this consultation. We welcome the review of the UK liability regime and the work that is being undertaken by the Government to shape and direct UK law. We support the proposals to include issuers of all securities admitted to trading on a UK Regulated Market or MTF. However, we seek some clarity on the scope of disclosure that is covered by the regime.
September 2008
Response to CESR call for evidence on post-trading infrastructures The Exchange has responded to CESR’s call for evidence on identification of regulatory arrangements for post-trading infrastructures and advice on possible solutions in terms of bridging any potential differences in these arrangements.
The Exchange has responded to this consultation. We support the FSA's objective to modernise the sponsor regime for the Exchange’s Main Market and in so doing, move it to a more principles-based regime that is practical and reflects good market practice. However, we query the proposals that could result in a significant level of responsibility and liability being placed on issuers for the identification and management of conflicts of interest within its sponsor firm.
Response to the FRC's consultation on proposals for future arrangements for funding the FRC's activities in relation to accounting, auditing and corporate governance. The Exchange has responded to this consultation. Whilst we support the work of the FRC, we raise concerns about the scale of the increases in the business levy and the consequent impact on quoted companies (particularly in terms of the potential for triple-charging and the effect on the overall cost of raising capital). We also query the basis for the proposals to replace income lost by dint of the removal of Government funding. Consequently, we request a wholesale review of the funding arrangements to create a level playing field for charging purposes.
May 2008
Response to HM Treasury review of sunset clauses under the market abuse regime
The Exchange has responded to HM Treasury review of sunset clauses relating to superequivalent provisions under the UK civil market abuse regime.
We support the proposal to retain the current UK superequivalent provisions for a further limited period, pending the EU review of the Directive. It would seem unnecessary and disruptive to change the regime now, only to potentially have to change it again in a couple of years’ time.
April 2008
Response to CESR consultation on the equivalence of Canadian and South Korean GAAP
The Exchange has responded to CESR’s consultation on the equivalence of Canadian and South Korean GAAP.
We are supportive of the conclusions reached by CESR and the resultant advice that the Commission should accept both Canadian and South Korean GAAP.
The Exchange has responded to the Financial Reporting Council's consultation regarding their levy proposals for 2008/9. In our response, we support the work of the Council, but raise concerns regarding the level, scope and apportionment of the business levy. However, we also acknowledge that the Council intends to consult more widely on their core funding requirements during 2008 and we signal our intention to contribute to that debate.
Response to FSA’s Discussion Paper on the Structure of the Listing Regime
The Exchange has responded to the FSA’s Discussion Paper 08/1 “A Review of the Structure of the Listing Regime”.
We support the FSA’s desire to ensure clearer labelling and to improve the general understanding amongst market participants of the terminology used to describe the listing regime. However, we believe that Option 1 of the FSA's proposals is a disproportionate response that may adversely affect existing and prospective issuers and investors and damage the UK’s competitive position. Under Option 2, the tiered structure of the Main Market would be retained and unintended adverse consequences for issuers and investors would thus be avoided.
March 2008
Response to FSA’s Consultation on the implementation of the Statutory Audit Directive (SAD) and the Company Reporting Directive (CRD) in the UK
The Exchange has responded to FSA’s consultation on the implementation of the Statutory Audit Directive (SAD) and the Company Reporting Directive (CRD) in the UK.
We support the majority of the FSA proposals regarding the implementation of the requirements on audit committees and corporate governance statements.
The Exchange has responded to the Financial Reporting Council's consultation on potential revisions to the Combined Code. In our response, we welcome the Council's intention to focus on improving the practical application of the Combined Code and support the proposed amendments to allow an individual to chair more than one FTSE 100 company board and to also allow a Chairman to sit on the audit committee.
February 2008
Response to FSA's Consultation on amending Chapter 18 of the Listing Rules for investment entities
The Exchange has responded to FSA’s consultation on a possible disclosure regime for Contracts for Difference. We agree that some form of action needs to be taken. However, we believe that additional work needs to be undertaken before conclusions on the design of such a regime can be reached.
Response to CESR’s Consultation on the equivalence of Chinese, Japanese and US GAAP.
The Exchange has responded to CESR’s consultation on the equivalence of Chinese, Japanese and US GAAP. We are very supportive of the approach that CESR sets out in this consultation paper and we were encouraged by the similar support voiced at the recent open hearing on this subject.
October 2007
Response to the European Commission's communication on a simplified business environment for companies in the areas of company law, accounting and auditing
The Exchange has responded to the European Commission's communication on a simplified business environment for companies in the areas of company law, accounting and auditing.
Our response focuses on one aspect – the potential repeal of the second company law directive and the impact upon pre-emption rights. Pre-emption rights are highly valued by investors and we believe there is a strong case for retaining the requirement at EU level.
Response to BERR's consultation on UK implementation of the Directive on Statutory Audit (Policy Conclusions and Draft Regulations)
The Exchange has responded to BERR's consultation on UK implementation of the Directive on Statutory Audit (Directive 2006/43/EC).
Our response focuses on the provisions relating to audit committees and third country auditors, and we are broadly supportive of BERR's proposals.
Response to HM Treasury/FSA Consultation Paper on proposals for a UK recognised covered bonds legislative framework
The Exchange has responded to the joint consultation from HM Treasury and the FSA on proposals to develop a legislative framework for the issuance of covered bonds in the UK.
The consultation paper discusses the rationale and outline of the proposed legislative framework and how the FSA would go about implementing it. The consultation also sets out a regulatory impact assessment for the proposals and the draft Statutory Instrument. The Exchange supports the broad proposals and believes they would be of value to both issuers and investors. In addition, the Exchange provides views and makes recommendations on a number of points raised in the consultation.
September 2007
Response to FSA Discussion Paper on trading in MTF shares: impact of proposed stamp duty changes
The Exchange has responded to FSA Discussion Paper DP07/3 on trading of multilateral trading facility ("MTF") shares and the impact of proposed stamp duty changes.
DP07/3 discusses how the markets in MTF shares might be regulated if HM Treasury takes forward its plans to extend stamp duty intermediary relief to trading in MTF shares that takes place away from the systems of an MTF (i.e. OTC). The Exchange recognises the FSA has undertaken important and positive work with respect to the regulatory structure between organised venues. DP07/3 also reflects the Treasury’s aim of facilitating further competition in the market for MTF shares, and we welcome this in what is already a highly-competitive environment. However, the Exchange raises in its response a number of important issues that require careful consideration before the proposals are taken further.
August 2007
Response to FSA Consultation on Consequential Handbook Amendments: Post-Trade Transparency and Trade Data Monitors
The Exchange has responded to FSA's CP07/16 (Chapter 6) on Consequential Handbook Amendments: Post-Trade Transparency and Trade Data Monitors (TDMs).
The Exchange fully supports the proposal for a TDM regime, which we believe has the potential to address the market data needs of both market participants and regulators. However, we suggest amendments to some of the guidelines, where we do not believe that the current wording will achieve the desired outcome.
July 2007
Response to the European Commission's third consultation document on fostering an appropriate regime for shareholders' rights
The Exchange has responded to the European Commission's consultation on a possible Recommendation for fostering an appropriate regime for shareholders’ rights. Such a Recommendation would supplement the recently adopted Directive.
We support the Commission’s efforts to promote shareholders’ rights. However, we believe that some of the measures outlined in the consultation may not need to be addressed at the EU level, but should instead be left to the market to develop best practice or should be left to private contractual arrangements.
The Exchange has responded to FSA's Consultation Paper 07/10 which details the proposed implementation of the Investment Exchange and Clearing Houses Act 2006 ("the Act") via FSA's Handbook.
The Consultation Paper seeks to codify within the Handbook the terms of the Act relating to those "regulatory provisions" made by Recognised Bodies which are notifiable to the FSA and which FSA may then subsequently decide to "call-in" for further market-wide consultation. The Exchange has a limited number of comments as CP 07/10 seeks merely to codify the current position under the Act. Our main concern however is the potentially lengthy consultation timetable available once FSA has decided to call-in a "regulatory provision". The Exchange has requested that the need for market certainty be considered within the circumstances of the specific "regulatory provision" in question and that working to the maximum available consultation timetable be avoided.
June 2007
Response to the European Commission's Call for Evidence regarding private placement regimes in the EU The Exchange has responded to the European Commission's Call for Evidence regarding private placement regimes in the EU.
Our main concern is that any regime should not impinge on securities markets which are already functioning efficiently under the Prospectus Directive.
May 2007
Response to CESR's consultation on technical advice regarding equivalence of Third Country GAAP
The Exchange has responded to CESR’s technical advice regarding a mechanism for determining the equivalence of the generally accepted accounting principles (GAAP) of third countries.
We urge CESR to take a pragmatic, flexible approach that takes account of the quality of the financial reports produced under local GAAPs, and provides an incentive for third countries to move towards convergence.
March 2007
Response to CESR's consultation on Best Execution under MiFID
The Exchange has responded to CESR's consultation on Best Execution under MiFID, which covers issues such as the contents of an execution policy, client consent, and relationships between firms in chains of execution. CESR also asks for evidence with respect to the execution quality data that is available commercially. In general, we agree with CESR's views, and have provided input into the call for evidence.
Response to CESR's consultation on the Level 3 Guidelines on MiFID Transaction reporting
The Exchange has responded to CESR's consultation on Level 3 guidelines for Transaction reporting. In general, we agree with CESR’s proposed guidelines. In particular, we support the proposal that CESR members take account of any prior approval by another CESR member for reporting channels, as the process should be streamlined as much as possible to avoid unnecessary duplication of work.
Response to CESR's call for evidence on non-equities market transparency
The Exchange has responded to CESR's call for evidence on non-equities market transparency. Whilst we are not aware of conclusive evidence of market failure, we believe that if the Commission does decide to take action, it should be limited to the specific area of retail participation in the most liquid bonds.
Response to the European Commission's consultation on implementation of articles 45-47 of the Directive on Statutory Audit
The Exchange has responded to the European Commission's consultation on implementation of articles 45-47 of the Directive on Statutory Audit. We fully support the consultation, which proposes equivalence provisions and transitional arrangements for (non-EU) auditors of third country issuers.
January 2007
Response to the FSA consultation paper CP 06/17 - Amendments to the Prospectus and Listing Rules
The Exchange has responded to this consultation paper in which we are broadly supportive of the proposed amendments. However, we also raise queries regarding certain proposals concerning an issuer's ongoing control of assets, the definition of a threshold for certain 'related party' rules, the extension of the RICS standard for property valuations to companies incorporated in the Channel Islands and the Isle of Man and the imposition of a minimum reporting period for wholesale issuers filing a voluntary annual information update.
December 2006
Response to DTI's consultation on the Proposal for a Directive on the Exercise of Rights by Shareholders.
The Exchange has responded to DTI's consultation on the Proposal for a Directive on the Exercise of Rights by Shareholders.
We are strongly supportive of initiatives to promote shareholder rights. However, we recognise that a careful balance needs to be struck between ensuring shareholders are able to exercise their rights and imposing costs on companies – after all this is ultimately not in the shareholders interests
November 2006
The Exchange has responded to the IASB's consultation on the the creation of an improved Conceptual Framework for Financial Reporting. In our letter, we reflect concerns from market participants that the process towards convergence risks undermining the principles-based approach to accountancy standards in the UK, partly through a lack of effective consultation. We propose that the boards publish the detail of their consultative efforts at an early stage to better support claims for change and involve the UK's national standard setter, the ASB, more closely in the process.
September 2006
Response to HM Treasury consultation on extending the scope of the statutory damages regime for disclosures required under the Transparency Directive
The Exchange has responded to HM Treasury's consultation on extending the scope of the statutory damages regime for disclosures required under the Transparency Directive. With respect to AIM companies that voluntarily choose to make Transparency Directive disclosures, we strongly believe that extension of the statutory regime as it is currently drafted would have inadvertent consequences that will outweigh any potential benefits from consistency in the regime between our two markets.
June 2006
Response to FSA’s consultation paper CP06/4 on the UK implementation of the Transparency Directive
The Exchange has responded to FSA’s consultation regarding the implementation of the Transparency Directive in the UK.
We have been following the progress of the Transparency Directive for several years now, so we take a keen interest in its effective implementation in the UK. It is imperative that local implementation is effective, consistent and proportionate. However, we believe that the UK regime can and should be superequivalent to the EU Directive where there are demonstrable benefits of doing so.
Response to Investment Entities Listing Review
The London Stock Exchange has responded to the FSA's Consultation Paper on its review of the Listing Rules for Investment Entities (CP06/4). We are supportive of the proposals and are pleased that the FSA is reviewing and updating the listing requirements for such issuers, who make an important contribution to London's capital markets. Our response identifies a few areas where further consideration is required to ensure the Listing Rules play their part in helping the UK to grow its share of investment entity business in a globally competitive environment
May 2006
Response to the IASB on 'Exposure Draft ED8 Operating Segments'
The London Stock Exchange has responded to the International Accounting Standards Board (IASB) on Exposure Draft ED8 'Operating Segments'. In our letter, we recognise the potential of this work for helping the analyst community to derive more accurate earnings forecasts. Our response also suggests that for technology and healthcare companies (including those members of our techMARK and techMARK mediscience communities) whose business models rely on intellectual property, there is a balance to be struck between the interests of disclosure and the desire of such companies to protect their competitive positions.
LSE response to IASB on Management Commentary 2006
The London Stock Exchange has responded to the International Accounting Standards Board (IASB) on their discussion paper regarding Management Commentary. In our letter, we support the spirit of their work in attempting to find a convergent approach for directors to make forward-looking statements about the strategic direction of their company, but we are not supportive of their conclusion that management commentary presentation should become a prerequisite for compliance with International Financial Reporting Standards.
April 2006
Response to the Commission’s consultation on future priorities for the Action Plan on Modernising Company Law and Enhancing Corporate Governance
The Exchange has responded to the consultation on future priorities on the EU Corporate Governance Action Plan. We believe the Commission is right to review the medium and long term Action Plan measures and should only proceed in those areas where there is general consensus that they would be beneficial.
Response to CESR’s consultation on possible implementing measures concerning the Transparency Directive: Storage and Filing of Regulated Information
The Exchange has responded to CESR’s consultation regarding implementing measures of the Transparency Directive in relation to the officially appointed mechanisms (OAM) for storage and filing of regulated information.
It is our view that, in the absence of a single European database, it is likely that the costs of a network of OAMs will outweigh the benefits. As such, we believe both CESR and Commission should reconsider whether the current proposals should be pursued.
Shareholders' Rights Directive - Letters to Rapporteurs
The Exchange has written to Klaus-Heiner Lehne and Wolf Klinz (the Rapporteurs for the Shareholders' Rights Directive in the Legal Affairs and Economic & Monetary Affairs Committees of the European Parliament). It highlights the concerns we have received from our issuers over the proposed 30 day notice period for EGMs in the draft directive. There are concerns that if this is not amended it will raise costs and have negative implications on the market.
March 2006
Response to the DTI on their wider invitation for comments on the repeal of the Operating & Financial Review (OFR)
The London Stock Exchange has responded to the DTI regarding the widened government consultation on the repeal of the OFR and narrative reporting requirements. In our response, we support efforts to increase shareholder engagement, but raise concerns that mandatory forward-looking statements on social, community, employee and environmental matters would represent an additional regulatory burden for Main Market companies.
January 2006
Commission Evaluation of the Financial Services Action Plan
The London Stock Exchange has responded to a Commission paper for comment on the evaluation of the Financial Services Action Plan. In our response, we agree that in many respects the FSAP has worked extremely well as an over-arching programme and that its completion within the deadline is a major achievement. However, we raise some concerns about the treatment of third country issuers.
December 2005
Response to FSA's Discussion Paper on Trading Transparency in the UK Secondary Bond Market
The Exchange has responded to FSA's Discussion Paper on bond market transparency. We share FSA’s view that there could well be market failures in the bond market, but that this is not conclusive.
CESR Consultation on Mediation Mechanism
The London Stock Exchange has responded to a CESR paper for comment on the proposal to establish a mechanism for resolving disputes between regulators. In our response, we welcome much of the detail proposed by CESR. However, we raise concerns about the proposed role of market participants in the process.
October 2005
Response to the Financial Reporting Council’s review of the Combined Code
The Exchange has responded to the Financial Reporting Council’s review of the Combined Code. Good corporate governance standards are an essential factor in reinforcing the stature and respect the UK financial markets already generate globally.
Response to ESC MiFID working paper on conduct of business requirements
The Exchange has responded to the European Securities Committee's most recent working paper on proposed implementing legislation for the MIFID provisions concerning conduct of business. The Exchange has asked the ESC to remove the provision requiring execution venues to publish execution quality data. The Exchange believes that there is no value in such a requirement, given the extensive transparency requirements with which all execution venues must comply.
September 2005
Response to CESR's consultation on potential amendments to Regulation 809/2004 (Complex Financial Histories).
The Exchange has responded to CESR’s consultation on potential amendments to Regulation 809/2004 regarding the historical financial information which must be included in a prospectus. We fully support initiatives that ensure prospective shareholders have sufficient information on which to base investment decisions.
We believe that only a limited change should be made to the Regulation to allow competent authorities to require further information, supported by guidance and examples at Level 3 on the financial information that competent authorities agree amongst themselves would be necessary.
Response to DTI's consultation on Company Law Reform (new draft clauses)
The London Stock Exchange has responded to DTI's consultation on new clauses on Company Law Reform. We welcome deregulatory changes, to bring company law up-to-date with current circumstances and technology. However, we are also mindful of the risk of increasing the regulatory burden on companies and would urge the Government not to do so unless there are clear benefits.
Our main concern is that the proposals on auditor offences may have unintended consequences; in particular, the additional information required from companies and work undertaken by auditors will significantly increase burdens and audit costs. We are concerned that proposals on auditors do not lead to a Sarbanes-Oxley style regime, resulting in more detailed rules (as opposed to a principle-based regime) with associated box-ticking mentality for auditors and increased burdens on companies.
August 2005
Response to CESR's second call for evidence on the mandate for technical advice on implementing measures of the Transparency Directive
The London Stock Exchange has responded to CESR’s second call for evidence on the mandate for technical advice on implementing measures concerning the Transparency Directive (CESR/05-493). The call for evidence refers specifically to the storage of regulated information and the filing of regulated information. We believe that these are important components of the Financial Services Action Plan: it is vital that EU policy makers come to the right conclusions so that investors have access to company information in as efficient and low cost manner as possible.
Response to ESC working paper on MiFID transparency and admission to trading
The London Stock Exchange has responded to the European Securities Committee working paper proposing level 2 implementing measures concerning transparency and admission to trading requirements for regulated markets. The Exchange has praised the ESC for its open approach to consultation, and for the excellent progress that has been made on the transparency provisions. However, the Exchange has some residual concerns about some of the detailed post trade transparency and admission to trading requirements, which are detailed in the response.
July 2005
Green Paper on Financial Services Policy (2005-2010)
The London Stock Exchange has responded to the EU Commission's Green Paper on Financial Services Policy (2005-2010). We welcome many of the views of the Commission, which we believe if adopted should make a positive contribution to the wider economic goals of the European Union. In particular, we support the emphasis in the paper on the global nature of financial services. We also welcome the intention to focus on consolidation of the existing regulatory framework rather than further ambitious plans for regulatory and supervisory convergence.
Response to the European Commission Consultation on Shareholders' Rights
The London Stock Exchange has responded to the European Commission's second consultation on fostering an appropriate regime for shareholders' rights.
We are strongly supportive of initiatives to support shareholders’ rights, though we recognise that a careful balance needs to be struck between ensuring shareholders are able to exercise their rights and imposing costs on companies.
Response to DTI White Paper on Company Law Reform
The London Stock Exchange has responded to DTI's White Paper on Company Law Reform.
We are supportive of aims to modernise the company law framework, especially since the last significant legislation in this area was the Companies Act 1989, and circumstances and technology have clearly changed since then.
Response to HM Treasury consultation on the major shareholder notification provisions of the Transparency Directive
The London Stock Exchange has responded to HM Treasury’s consultation on the major shareholder notification provisions of the Transparency Directive.
The current UK disclosure regime has enabled companies and investors to be informed of changes to major holdings in share capital, enhance effective control of those companies and ensure overall market transparency of important capital movements. We believe that any proposals to change this regime are important and could have a substantial impact for both companies and investors; we therefore believe they are worthy of a more substantial consultation.
June 2005
Response to DTI consultation on corporate governance
The London Stock Exchange has responded to the DTI’s consultation on Directive proposals on company reporting, capital maintenance and transfer of the registered office of a company. These measures form part of the European Commission’s Company Law and Corporate Governance Action Plan.
UK Real Estate Investment Trusts (UK-REITs)
The London Stock Exchange has responded to HM Treasury and Inland Revenue discussion paper on the introduction of a UK-REIT, in which the Government seeks the views of the industry representatives on the tax treatment of a UK-REIT vehicle. In our response, we specifically address the question of requiring a UK-REIT to be listed. The London Stock Exchange is supportive of the proposal to introduce a UK-REIT and believes there are benefits to both issuers and investors in such vehicles being either listed or admitted to trading on AIM.
Response to CESR's draft technical advice on possible implementing measures of the Transparency Directive
The London Stock Exchange has responded to CESR’s consultation on draft technical advice on Level 2 of the Transparency Directive (CESR /05-267). Our response highlights a number of areas where we believe that CESR needs to reconsider their advice. In particular, we are concerned that a greater level of certainty needs to be afforded to issuers - via a clearer definition of media and an approval regime for service providers.
Equivalence of Certain Third Country GAAP
The London Stock Exchange has responded to CESR’s draft advice on the equivalence of certain third country GAAP. We believe that this matter is key to the success of the European economy and EU capital markets and we encourage the Commission to consider the advice carefully within the context of wider European economic policy making.
May 2005
Establishment of a Mediation Mechanism
The London Stock Exchange has responded to CESR’s consultation on the establishment of a mediation mechanism. We are supportive of the use of an effective mediation mechanism to resolve disputes between national regulators in a quick and cost efficient manner. However, in order to achieve this, it is vital that the mechanism is impartial, efficient, transparent and flexible.
March 2005
Response to CESR's final consultation on possible implementing measures for the Markets in Financial Instruments Directive ("MiFID")
The London Stock Exchange has responded to CESR's final consultation on proposed level 2 advice for the Markets in Financial Instruments Directive ("MiFID"). The consultation covered best execution and market transparency. In its response, the Exchange has called for clarification of the treatment of negotiated trades on regulated markets to avoid an unnecessary and potentially damaging migration of business away from regulated markets, and a more sensitive approach to the transparency arrangements for illiquid shares.
February 2005
Response to CESR's consultation on possible implementing measures for article 40 of MiFID
The London Stock Exchange has responded to CESR’s consultation on proposed implementing measures for article 40 of MiFID (admission of financial instruments to trading on regulated markets). We welcome steps taken by MiFID to meet our concerns to earlier draft advice on this issue, but we still believe that there is considerable scope to improve the draft advice.
Response to CESR's second consultation on possible implementing measures of the Transparency Directive
The London Stock Exchange has responded to CESR’s second consultation on proposed implementing measures of the Transparency Directive. The paper covers: notifications of major holdings of voting rights; half-yearly financial reports; equivalence of third countries information requirements; and procedural arrangements whereby issuers may elect their ‘Home Member State’.
Although we believe the consultation paper shows a detailed and thorough analysis of these important issues, our response highlights a key concern regarding equivalence of third countries information requirements.
January 2005
Response to the Commission Staff Working Document on the Application of the Lamfalussy Process to EU Securities Markets Legislation
The London Stock Exchange has responded to the Commission Staff Working Document on the application of the Lamfalussy process to EU securities markets legislation. We believe that in many respects the Lamfalussy process has worked extremely well. We fully support steps taken by the Commission to make Community financial services legislation more consistent with better regulation principles.
However, as the Working Document itself acknowledges, there is scope for the process to be further improved. For example, the quality of legislation must not be compromised in order to meet deadlines. Also Level 1 legislation should avoid excessive detail. We would caution against ambitious plans for supervisory convergence and regulatory codification. Instead the focus should be on implementation, enforcement and the correction of poor legislation.
Response to CESR's analytical paper "Which Supervisory Tools for the EU Securities Market?"
The London Stock Exchange has responded to CESR’s paper “Which Supervisory Tools for the EU Securities Market?” which analyses the role of securities regulators in ensuring full and consistent implementation and enforcement of the Financial Services Action Plan.
We are very supportive of the work that CESR has conducted so far and we believe that cooperation, open discussion and transparency amongst regulators across the EU is an essential part of making the Lamfalussy process work.
Response to CESR's consultation on Level 3 of the Market Abuse Directive
The London Stock Exchange has responded to CESR’s consultation paper regarding Level 3 of the Market Abuse Directive. We support CESR’s work at Level 3 which we believe is important for ensuring common approaches are taken, allowing for uniform application of the Directive across the EU. The three areas addressed in this consultation are: accepted market practices in relation to market manipulation; what CESR members consider constitutes market manipulation; and the reporting of suspicious transactions (including a common format for such reports).
Response to CESR's consultation on possible implementing measures of the Transparency Directive
The London Stock Exchange has responded to CESR’s consultation on proposed implementing measures of the Transparency Directive (Part I: Dissemination and storage of regulated information). We believe these implementing measures, in particular regarding information dissemination, are vital to the creation of a single market.
We fully support CESR’s proposals with regards to dissemination – we believe that the system of competing operators is the best practice model for Europe. In the UK the system of competing primary information providers (PIPs) - providing real time, electronic ‘push’ of regulatory information - has worked well since 2001.
December 2004
Response to European Commission consultation on shareholders' rights
The London Stock Exchange has responded to the European Commission's consultation on shareholders' rights. The Exchange has welcomed this initiative to ensure an appropriate regime for shareholders' rights but has urged the Commission to conduct a thorough impact analysis and minimise unnecessary costs to issuers."
Response to CESR's consultation on proposed advice on implementing measures for MiFID
The London Stock Exchange has responded to CESR's latest consultation on its proposed advice on implementing measures for the Markets in Financial Instruments Directive ("MiFID"). This was CESR's second consultation on implementing measures from the Commission's first mandate and dealt with a number of issues including transaction reporting arrangements.
Response to CESR's Concept Paper on how they intend to measure equivalence of certain third country GAAP and IAS
The London Stock Exchange has responded to CESR's Concept Paper on how they intend to measure equivalence of certain third country GAAP and IAS. We believe this issue is a very important one for both existing and prospective third country issuers and we see the establishment of a workable and practical methodology which can provide clarity to the market as a key priority.
November 2004
Response to CESR's call for evidence on modifications to the UCITS directive and the treatment of eligible assets
The London Stock Exchange has responded to CESR's call for evidence on modifications to the UCITS directive and the definitions of eligible assets. The Exchange calls on CESR top adopt a pragmatic and consistent approach to the treatment of structured products.
September 2004
Response to CESR's consultation on proposed advice on implementing measures for MiFID
The London Stock Exchange has responded to CESR's consultation on its proposed advice on implementing measures for the Markets in Financial Instruments Directive ("MiFID").
Response to the joint HM Treasury and FSA consultation on the UK implementation of the EU Market Abuse Directive
The London Stock Exchange has responded to the joint HM Treasury and FSA consultation on the UK implementation of the Market Abuse Directive. We welcome the introduction of a common EU framework for the prevention and detection of market abuse as this is fundamental to ensuring the integrity of Europe’s financial markets. However, we believe the Directive should be implemented in a manner that is effective, consistent and, in particular, proportionate. We urge HM Treasury and FSA not to gold plate the Directive - there needs to be demonstrable benefits if the UK regime is to be wider in scope or superequivalent to the EU Directive.
August 2004
Comments on the Securities Expert Group Report
The Exchange has responded to the online consultation held by the European Commission on the report of the Securities Expert Group. Our response supports the findings of the report, and identifies the key areas that we feel need further attention as: clearing and settlement, corporate governance, real time market monitoring, and dissemination of corporate information.
July 2004
Response to CESR's call for evidence on implementing measures concerning the Transparency Directive
The London Stock Exchange believes the implementing measures for the Transparency Directive, in particular the measure regarding regulated information dissemination, are important for the creation of a single market in Europe.
Response to CESR’s call for evidence on the equivalence between certain third country GAAP and IAS/IFRS
The London Stock Exchange welcomes the mandate give to CESR to determine 'equivalence' of accounting standards with IAS/IFRS.
Response to the European Commission's Communication "Clearing and Settlement in the European Union – The way forward"
The London Stock Exchange has responded to the Communication supporting the Commission's view that further attention is needed in the area of Clearing and Settlement in order to promote further integration of the financial services market across the EU.
Response to CESR's second request for advice on implementing measures on the Markets in Financial Instruments Directive (MiFID)
The London Stock Exchange has responded to a consultation by the Committee of European Securities Regulators requesting advice on implementing measures on MiFID.
June 2004
Comments on the CESR/ESCB consultation on Draft Standards for Securities Clearing and Settlement Systems in the European Union
The London Stock Exchange has responded to a joint consultation by the Committee of European Securities Regulators and the European Central Bank proposing draft standards for securities clearing and settlement systems in the EU. We are supportive of the development of these standards and believe that their appropriate implementation will promote genuine competition and a truly integrated market for financial services in the EU.
Comments on the European Commission's consultation on the role of (independent) non-executive or supervisory directors
The London Stock Exchange has responded to the European Commission's consultation on the role of (independent) non-executive or supervisory directors. This consultation sets out proposals for a forthcoming Recommendation to Member States, which is a measure arising from the Commission's Action Plan to modernise company law and enhance corporate governance in the EU.
Comments on CESR's consultation paper on its role at Level 3
The London Stock Exchange has responded to the CESR consultation paper on its role at Level 3 - which will become increasingly important as use of the Lamfalussy process continues.
Comments on HMT's review of FSMA
The London Stock Exchange has responded to HMT's consultation paper the Financial Services and Markets Act (FMSA) two year review.
April 2004
Comments on CESR's Consultative Concept Paper on the proposed Financial Instruments Directive (ISD2)
The London Stock Exchange has responded to CESR's consultation paper regarding articles 25, 56 and 58 of ISD2. CESR's consultation paper can be found at www.cesr-eu.org.
December 2003
Comments on Level 2 implementation measures for the EU's Market Abuse Directive
The London Stock Exchange has provided comments to the European Commission on the proposed Level 2 implementation measures for the Market Abuse Directive.
Impact of Prospectus Directive on non-EU issuers
The London Stock Exchange has written to all its issuers to raise awareness of the potentially significant impact that the Prospectus Directive will have on non-EU issuers from the date it is published in the Official Journal (expected to be 10 December 2003).
October 2003
Comments on Level 2 implementation measures for the EU's Prospectus Directive
The London Stock Exchange has provided comments to the European Commission on the proposed Level 2 implementation measures for the Prospectus Directive.
Bundled brokerage and Soft Commission
The Exchange has responded to the Financial Services Authority's consultation on proposed new treatment of bundled brokerage and soft commission.
September 2003
EU Transparency Directive submission update
The number of signatories to the Exchange-led campaign on the EU Transparency Directive continues to grow.
June 2003
Industry coalition lobbies EU on Transparency Directive
A broad industry coalition, including the Exchange, PR Newswire, Investor Relations Society, Association of British Insurers and Waymaker, has made a joint submission to the European Commission about news dissemination and the EU Transparency Directive.
April 2003
HM Treasury's Green Paper
The Exchange recently responded to HM Treasury's Green Paper on the desirability of legislation to cater for major operational disruption in the financial services industry.
March 2003
Transparent information
The European Commission recently published its proposed transparency directive. We welcomed some of the concessions in the new draft, but are seeking to raise the debate in other areas.
February 2003
Best Execution
We recently submitted our response to the Financial Services Authority (FSA) best execution consultation. 'Best execution' refers to the FSA rules and procedures that are in place to ensure that firms seek out the best deal for their customers. The consultation was released in October 2002 to examine how the FSA's approach could be modernised.
February 2002
Response to the first Report from the Giovannini Group on Clearing and Settlement in Europe
As part of our continuing programme of involvement in clearing and settlement developments in Europe, we have just released a response to the first report by the Giovannini Group of November 2001.
December 2001
Response to European Commission request for additional information on clearing and settlement
The London Stock Exchange has produced a formal response to the European Commission's request for additional information on the issue of clearing and settlement in Europe. Our view is that in order to maximise the efficiency of cross-border trading in securities in Europe, it is essential that trading platforms and market users have access on non-discriminatory terms to more efficient and cost effective clearing and settlement facilities.
November 2001
Best Execution
On 31 October 2001, we submitted a response to the Financial Services Authority's ("FSA") discussion paper on best execution. The paper discusses the need to change the current best execution regime. Our response highlights that investors are currently getting a fair deal and benefiting from natural competition in the market.
EU Investment Services Directive consultation
The European Commission is consulting on changes to the Investment Services Directive (ISD) which affect the rules governing the operation of exchanges and investment firms. We have submitted a response highlighting the impact of the proposals and suggesting alternatives where appropriate. We support the overall goal of the proposals to create a single market in European financial services, as this would reduce obstacles to trade and enhance competition between exchanges on a genuine pan-European basis.
August 2001
New European legislation
The London Stock Exchange has sent a submission to the UK Government detailing its response to a new directive proposed by the European Commission. We support the overall aim of giving companies easier access to pan-European capital, but are concerned that the Directive's 'one size fits all' approach could increase the cost of capital for smaller companies and place restrictions on the European capital market.