Glossary
This glossary is only relevant to the Transparency Directive. For terms relevant to the whole of the Financial Services Action Plan see the full FSAP Glossary.
Debt securities/Non-equity securities
Debentures, debenture or loan stock, bonds and notes – whether secured or unsecured. Under the TD, debt securities are bonds or other forms of transferable securitised debts. The exception to this is securities that are equivalent to shares in companies, or which (if converted or if the rights conferred by them are exercised) give rise to a right to acquire shares or securities equivalent to shares.
See TD Article 2(1)(b), PD Article 2 (1)(c)
Home country; Host country
The directives refer to home Member States and host Member States. We use home country and host country for the purposes of this summary.
Under MiFID, the starting point is that the home country relates to the location of an investment firm's or regulated market's head office or registered office. The competent authority in this jurisdiction then has responsibility for authorising that entity. In the case of investment firms, this competent authority has responsibility for ensuring compliance with any relevant MiFID standards, both for firms' local and cross-border business. The exception to this is for some branch business, where the host country competent authority (e.g. the German regulator where a UK incorporated investment firm establishes a branch in Germany) has jurisdiction for business conducted within its territory.
See MiFID Articles 4(20) & (21) and 31-33.
Under the PD and the TD, the home country is defined as the location of the registered office of the issuer. This competent authority is responsible for approving prospectuses and ensuring compliance with continuing obligation standards. However, issuers of non-equity securities of a denomination of 1,000 euros or more have a choice of home country. An issuer from outside of the EU establishes its home country as the jurisdiction in which it first makes a public offer, after the directive [comes in force]. In the context of these directives, a host country is one where the issuer has had its financial instruments admitted to trading (other than the home country). Under the PD, the host country cannot impose additional standards because the PD is a maximum harmonisation directive to allow the passport to work without restrictions. The TD is a minimum harmonisation directive, but host authorities are nevertheless prevented from imposing additional standards in some areas.
See PD Article 2(m) & (n) and TD Article 2(i) & (j)
Issuer
Generally, the company that has issued securities for trading on an EU regulated market. It is defined under the TD as a legal entity governed by private or public law (including a State) whose securities are admitted to trading on a regulated market. In the case of depository receipts representing securities, the issuer must have issued the securities represented.
See TD Article 2(1)(d)
