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Europe fights on transparency (Finanza & Mercati p. 1).

The European Parliament is expressed today on the proposed reform of the Investment Services Directive (ISD), presented last November by the Commission. At stake are the future rules of organized execution of investor transactions by exchanges, other trading systems and investment firms. The new directive, passing the system of concentration of trade on regulated markets in other countries (in Italy, for example), aims to stimulate competition between traditional exchanges and other trading systems. In particular, the concentration exceeded the scheme would open the way for trading of securities carried out by the banks through the internalization of trade (internal matching of orders).

this perspective that, from the stage of gestation of the proposal, alarmed European stock markets: "We are not worried so much by competition and the effects that a widespread internalisation of trade could have on market liquidity and transparency and efficiency in price formation, "said a representative of the Federation of European stock exchanges. The Commission, to respond to these concerns, has included in its proposal, Article 25 of stringent pre-trade transparency obligations that would require the person making systematic internalisation of trade in shares admitted to trading on a regulated market, the public firm buying and selling. "They are obligations which may stifle competition that alternative trading channels can make the exchanges and as they would introduce a requirement for the concentration of trade even if does not exist today, to the detriment of competition and investors," said the rapporteur Theresa Villiers (British Conservative), by incorporating the demands of the City and investment banks.
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on 2 September, despite a strong mobilization of European stock exchanges, have obtained the first victory of the text adopted in committee economy the controversial article 25 was sweetened with the introduction of the CD or the price improvement opportunities for those who internalize trade, to apply a price equal to or better than (they, ed) listed. "It 's a mechanism to render meaningless the requirements of transparency, everyone knows that the City, which is also a bridgehead of U.S. investment banks, has a strong advantage in terms of internalization, other companies such as Deutsche Bank or ABN Amro have ambitious plans in that area, "said a French MEP (Just France and Italy have more expenses in defense of pre-trade transparency).

today an amendment to Article 25 will attempt to remove the possibility of price improvement. The outcome of the vote is very uncertain (in the economy committee majority in favor of price improvement has been only one vote) and the groups are breaking up borders. A parallel battle then cover the scope of the constraints on both the pre-trade transparency and best execution, investment banks that want to limit itself to non-business customers.

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EU directive on clearing the slide (Markets & Finance)

The clearing and settlement systems between different countries are "Too expensive"

slide the proposal for a directive to create an integrated market at European level in the clearing and settlement in securities transactions. The committee should publish a "road map" with the aim of solving the problem of excessive cost of clearing and settlement systems between the different member countries, that cost has a direct impact on investors. While continuing the consolidation trend that has recently affected the post-trading activities, and advancing the project that aims to create by the end of this year through the merger between the London Clearing House (LCH) and Clearnet, the largest company in the field of active European clearing of securities, the Commission takes time and opens the launch of the draft directive on clearing and settlement systems.
In its place, at the end of October, the Commission will publish a communication on the basis of the results of the consultation launched by the European executive in May 2002 and two reports of specially crafted, will trace the actions it intends to take in the coming months. "The clearing and settlement systems are the foundation of the financial markets and as long as we are not able to integrate them we will not be able to build a single European market for financial services," said Alberto Giovannini, who led the group of experts and practitioners mandated by the Commission to identify obstacles and propose technical solutions for higher rarli. The lack of integration in this field implies in fact that the cost and the risk of cross-border trading resulting in much higher than in the case of internal negotiations to a single national system. After the launching, under the "Financial Services Action Plan" launched by the Commission in 1999, a number of Directives (the most recent ones on insider dealing and market abuse, the Prospectus, the Funds retirement, while the next step should be the new Investment Services Directive) aimed at creating a single market in financial services, on what the issue is thorniest, Brussels still prefer not to put on the table the proposed legislation. Meanwhile, European markets the weather heats up: The London Stock Exchange, concerned that the weight of rival Euronext (which controls Clearnet) will take over the new company "LCH.Clearnet ', has sided against the proposed merger between LCH and Clearnet and LCH has threatened to leave to appeal to a rival system.

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Brussels rejected the rescue. Alstom corner (Markets & Finance)

Monti wand Paris, and freezing the capital increase of the French company's attempt fails
Mr Mer Within the month the infringement procedure

BRUSSELS. Instead of an announcement opening a formal investigation within the month. Has not ended as he had hoped the meeting in Paris yesterday between Competition Commissioner Mario Monti and French Economy Minister Francis Wed The EU's executive, after formally challenged the aid granted by the French 'samples national 'as EDF, France Telecom and Bull, is preparing to launch a new infringement proceedings against the restructuring plan for the mechanical industry giant Alstom.
world leader in the field of wind turbines for power stations (with a share of 25% of the world) in the rail transport sector (with the TGV and - after the acquisition in 2000 Fiat Train - Pendolino, holds 18% of the total market) and in the shipbuilding industry for cruise ships, Alstom, burdened with debt for about 5 billion in recent months has faced an increasingly serious financial crisis. To avoid the likely bankrupt the French government has developed a plan for an injection of resources to 2.8 billion through a capital increase to 600 million (of which 300 were signed by the government, which would increase its holding to 31, 5%), the issuance of convertible bonds, and provision for 900 million by a syndicate of 40 banks for loans by 1.3 billion. To meet immediate deadlines the government in Paris already open, through the Cassa, a line of short-term credit for 600 million. Last Friday, in the columns of Le Figaro, the Competition Commissioner had issued a stop right at the first Raffarin government stating that "the rules are clear: a State can not provide aid without the Commission has been informed and before have them approved, "and adding that" the Commission could compel France to suspend aid those who have not yet been performed. "
"I want to discuss this plan with Commissioner Monti so that everyone can be reasonably satisfied," said Francis Wed But things went differently. "It was not a solution," Tilman Leuder cut short, a spokeswoman for Monti, after the meeting. Not only that. Brussels has also asked the French government not to participate in capital increase of Alstom (scheduled for September 24) prior authorization of the Commission. "The operation should not be implemented - stated Tilman - without having obtained the go-ahead for the EU." Times are tight. The goal is to "reach an agreement before the end of the week."
Monti, said the spokesman, "put forward concrete proposals suited to reconcile those two interests, the committee and the French government." The procedure against France, however, will be launched in each case. Perhaps as early Sept. 17, at the next Commission meeting. It is not the first time that Paris practice the policy of fait accompli. Last fall there was the opening of a line of credit for 9 billion for France Telecom indebitatissima. Recently there was the short-term loan of 450 million paid by the government in favor of Group Bull, for which Paris has said that the repayment will not occur. Aid to France Telecom Brussels initiated an infringement procedure. Against non-repayment of the loan to Bull Mountain has announced the appeal to the Court of Justice. Now there is the case of Alstom. For a measure decided by the Commission would also like to Berlin, worried about the impact of restructuring on the domestic industry, particularly the Siemens group, which Alstom is the leading competitor both in the energy sector and in the rail. Italy, too, could give positive action by the Commission. Whether it is a direct competitor Alstom Ansaldo (in the railway sector) and Fincantieri (shipbuilding), and because the sale of Fiat in 2000 train (just Alstom) was also the result of the decision in Rome not to engage in those actions assistance offered by Paris today.

Stefano Mazzocchi

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European compromise on additional financing (Finance & Markets)

Way the new European directive on investment services (ISD) is now in its decisive phase and the European Parliament prepares to vote - today in the Committee on Economic and Monetary Union and September 24 in the plenary - its amendments to the text proposed by the Commission last November . The goal of DSI is to create an integrated market in securities trading and an effective "single passport" by which investment firms can operate throughout the EU. Member states will no longer be allowed to adopt, as in the Italian case, a system of concentration of trade on regulated markets, which should therefore be open to competition from multilateral trading systems and by those companies investment (particularly banks) that will implement the internationalization of trade.

The rapporteur, British Conservative Theresa Villiers, after an initial position in favor of unconditional liberalization of trading channels that sparked criticism of the main European exchanges and caused an avalanche of amendments (over 400), much softened its approach and propose next Tuesday in Strasbourg, a compromise text that seems to have a good chance of being accepted by MEPs.

However, it remains central to the outcome on the issue of pre-trade transparency: the art. 25 of the Commission's proposal aims to introduce compulsory charges pre-trade transparency for banks that execute transactions for the internalisation of trade, requiring them to announce the purchase prices and sales that are committed to effect the transactions in shares, even if they are traded on a regulated market. A requirement that, while it increases the transparency of prices determined on the market, secondly, by exposing those who internalize the risk of a trade position, it could nullify the excess of the concentration rule. The compromise proposed by Villiers (who initially proposed the deletion of the whole art. 25) accepts the pre-trade transparency, but also requires that companies internalisers to conduct transactions at a price "equal to or better "than anticipated. European shares are strongly against and are pressing on MEPs to obtain the cancellation of this standard." This mechanism of price improvement, "says a representative of the Italian Stock Exchange," a nonsense of the pre-trade transparency allowing you to spreads set deliberately wide in order to have more room for maneuver in setting a case by case, the price actually charged. "

She seems confident, however, the compact support of the liberals and the most popular (on this divided along national boundaries), even when on the front of the Council for consideration of the proposal is well advanced, the Italian presidency - which aims to reach an agreement by October - has proposed a compromise that eliminates the possibility of price improvement. Looming for the Italian Presidency therefore a delicate and difficult negotiations with the Assembly in Strasbourg.