Regulatory Strategy 2007

As one of Europe’s leading diversified exchange groups, London Stock Exchange Group is an active participant in international and domestic regulatory debates.

This page contains links to recent submissions and responses on behalf of the Group, or certain entitites within the Group.

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  London Stock Exchange Group 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  London Stock Exchange Group 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  London Stock Exchange Group 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. London Stock Exchange Gropup supports the broad proposals and believes they would be of value to both issuers and investors. In addition, London Stock Exchange Group 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 London Stock Exchange Group 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). London Stock 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  London Stock Exchange Group has responded to FSA's CP07/16 (Chapter 6) on Consequential Handbook Amendments: Post-Trade Transparency and Trade Data Monitors (TDMs).

London Stock 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 London Stock Exchange Group 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.

Response to FSA's Consultation Paper 07/10 - Notification Obligations under the Investment Exchanges and Clearing Houses Act 2006 London Stock Exchange Group 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". London Stock Exchange Group 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 EULondon Stock Exchange Group 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 London Stock Exchange Group 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 London Stock Exchange Group 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 London Stock Exchange Group 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 London Stock Exchange Group 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 London Stock Exchange Group 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 RulesLondon Stock Exchange Group 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.