Private placement
Content
The European Commission has published in May 2007 a "call for evidence" regarding the proposal to introduce an European private placement regime.
The starting point of the above mentioned “call for evidence” was the EU White Paper on the enhancement of investment funds of November 2006 in which the European Commission, after investigating the matter, committed to: i) undertake a systematic analysis of national barriers to private placement of financial instruments with institutional investors and other eligible counterparties, in order to encourage the development of non-harmonized funds (e.g. private equity and hedge funds) and ii) assess whether a uniform EU framework should be created on the matter.
The European Commission suggested, inter alia, to introduce a prescriptive regime for private placement operations regarding securities listed on regulated markets.
ABI Position
ABI underlines that the lack of a single definition of private placement adopted by all countries - and their different national regimes - does not seem to discourage cross-border investment transactions. In particular, ABI doesn’t consider that is necessary to introduce a private placement regime for operations on listed securities, since there are already specific rules regarding disclosure of information to the market. Moreover, for what concerns the possibility of offering securities sold through private placement to retail investors, ABI points out that the matter has already been regulated in Italy, where the rules requires firms to prepare a prospectus in case of systematic sales to retail investors within 12 months of the security issue.
Some difficulties could instead arise on cross border private equity transactions and in particular on the creation of investment vehicles (usually non-harmonized investment funds) that hold securities of non-listed companies sold to institutional investors. In fact, the differences we found between EU countries’ national regimes regard the definition of private equity, the definition of qualified investors, the contents of the offer documents, the fact that the national authority’s authorization is required to create investment vehicles, and the tax regime applied to the vehicles. Thus, a single European regime could be useful at transnational level for non-harmonized funds, such as closed private equity funds.