ECMI Research Report

The report addresses the impact of the FSAP directives on listed Small and Medium-sized Companies. It also examines how long term investment in Small and Mid Caps be favored through improvements in visibility and liquidity.  Last, it questions how a more favorable listing environment for Small and Mid-sized Companies could be created in the EU.

"AN EU-LISTING SMALL BUSINESS ACT" report by Fabrice Demarigny.

The financial crisis has had a severe impact on European financial markets. Institutional and retail investors have suffered losses and, most notably, a diffused loss of confidence in the efficient functioning of the market. In its attempt to set out steps to restore investor confidence in European capital markets, the European Investors’ Working Group, organised by ECMI in partnership with the CFA Institute Centre for Financial Market Integrity, has recently launched its final report in Brussels with the European institutions.

This paper provides the first empirical evidence of fairness opinions in Europe. Legal requirements concerning the use of fairness opinions in mergers and acquisitions are significantly different in Germany, Switzerland and Austria. We examine the determinants of fairness opinions for target firms in these various regulatory settings, and moreover, investigate the impact of such opinions on the abnormal returns of target firms. While in Germany and Austria market participants do not deem fairness opinions important, they do create value for shareholders in Switzerland.

This paper argues that transparency-boosting measures specifically tailored to commodity and commodity derivatives markets are much needed. In particular, encouraging the creation of a clearing infrastructure for OTC commodity and commodity derivatives markets would be desirable. Moreover, EU regulators should consider setting up a new, more effective market abuse regime aimed at preventing manipulation in both the physical and financial commodities markets.

Abstract

Abstract

This paper presents the findings and preliminary conclusions of a study carried by GEF between March and May 2003 on the debate about the trading venue diversity which was triggered by the proposed update to the Investment Services Directive. The study covered the following topics: