A European directive that allows firms to publish a single prospectus for all E.U. countries will considerably reduce the costs and paper work required to distribute products outside of the country in which they were structured. "This will revolutionize the securitized products market," noted
, global head of structured and investment products at
in London. "It will lead to further consolidation of the market," added Groothaert. It is likely smaller players operating under a regional regulator will be pushed out, as the competitive advantage of being close to one regulator vanishes.
"My expectation is that by 2010 three quarters of all securitized products in Europe will be done by three strong, competitive houses," Groothaert predicted.
The directive, which will apply from July 2005, will allow a single prospectus to be used for all offerings within the E.U. Disclosure requirements across the E.U. will be standardized, which means a prospectus authorized in one country will automatically be accepted in others. The importance of the new prospectus directive has been underestimated by both banks and distributors, according to Groothaert.