13.3.2004

Official Journal of the European Union

CE 65/97

(2004/C 65 E/110)

WRITTEN QUESTION E-1876/03

by Christopher Huhne (ELDR) to the Commission

(6 June 2003)

Subject: Prospectus- denomination of issues

Will the Commission estimate the number of bond issues, and the total volume of issuance, in denominations of EUR 5 000 or less, EUR 1 000 or less, EUR 500 or less and EUR 100 or less?

Answer given by Mr Bolkestein on behalf of the Commission

(14 July 2003)

The Commission has not sought to estimate the number of bond issues nor the total volume of issuance, in denominations of EUR 5 000 or less, EUR 1 000 or less, EUR 500 or less, and EUR 100 or less, because it does not believe this number will allow it to draw conclusions on the usefulness of a given threshold on individual denomination.

First, as background, it is important to note that the concept of high individual denominations for securities was introduced with the aim of making a clear separation between securities aimed at wholesale investors and those aimed at the retail market.

The Commission has knowledge of figures related to existing bonds' individual denominations (from the International Primary Market Association (IPMA) and also used by the European Banking Federation).

However, the Commission believes there is no added value in such figures for two main reasons:

—	Existing individual denominations are today defined at a low level for practical reasons. For example, it is common practice to have individual denominations of one euro because bonds are quoted in percentages.

—

Current statistics will not assist in estimating how bond issuers will define in the future the individual denomination of their issues, in the context of the envisaged legislation notably for debt securities aimed at wholesale investors. The Commission believes the choice between securities aimed at wholesale investors will be predominant compared to the option of determining the competent authority for each issue. In fact, it believes that issuers of bonds targeting retail investors (with individual denomination of less than 50 000 euro) will rarely make use of the flexibility of the determination of the home competent authority, because these offers of securities are mostly done by credit institutions only to their customers and generally not listed.