2. Even before the introduction of L. 1806/1988 the goal of creating a common European capital market constituted the cause for introducing a series of legislative acts issued in compliance with secondary community law. These legislative acts were the core of the sub-system of commercial law then known as stock-exchange law and nowadays called capital markets law. These laws included:
i. Presidential Decree 348/1985 on “the designation of requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities (stocks, bonds) to the Athens Stock Exchange” (O.G.G. A’ 125). It was issued to harmonise the legislation on stock exchanges with the provisions of Council Directive 80/390/EEC of March 1980 “coordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing”.
ii. Presidential Decree 350/1985 on “the designation of requirements for the admission of securities (stocks, bonds) to the Athens stock exchange listing and the obligations of issuers of securities listed on the same Stock Exchange” (O.G.G. A’ 126). It was issued to harmonise the legislation on Stock Exchanges with the provisions of Council Directive 79/279/EEC of 5 March 1979 “on the coordination of the conditions for the admission of securities to official stock exchange listing”.
iii. Presidential Decree 360/1985 on “designating the financial information to be published on a regular basis by companies the shares of which have been admitted to the Athens stock-exchange listing” (O.G.G. A’ 129). It was issued in compliance with the provisions of Council Directive 82/121/EEC of 15 February 1982 on “information to be published on a regular basis by companies the shares of which have been admitted to official stock-exchange listing”.
iv. Presidential Decree 50/1992 on “mutual recognition of the listing particulars to be published for the admission of securities to official stock exchange listing in compliance with Council Directive 87/345/EEC” (O.G.G. A’ 22).
v. Presidential Decree 51/1992 on “the information to be published when a major holding in a listed company in the Athens Stock Exchange is acquired or disposed of in compliance with the Council Directive 88/627/EEC” (O.G.G. A’ 22).
vi. Presidential Decree 52/1992 on “the coordination of the requirements for the drawing-up, scrutiny and distribution of the prospectus to be published when transferable securities are offered to the public in compliance with Council Directive 89/298/EEC”
(O.G.G. A’ 22).
vii. Presidential Decree 53/1992 on “acts of persons possessing confidential information in compliance with Council Directive 89/592/EEC” (O.G.G. A’ 22).
Current legislative framework
1. The legislative initiative of the EU legislator towards the unification of capital markets and the creation of a uniform regulatory functional framework was more systematic after 1999. During this year the European Commission adopted the Financial Services Action Plan-FSAP targeting the acceleration of effective integration of the internal European marketconcerning its financial sector.“Lamfalussy process”was followed for new Directives to be issued, after the name of the chair of the EU advisory committee on the regulation of European markets of securities and is illustrated in the report of the committee above.
2. Four basic Directives were issued under Lamfalussy process. They constituted the core of the modern capital markets law and were integrated in the Greek legal order between 2005 and 2007 repealing the presidential decrees issued to integrate the earlier community Directives. In particular the following Directives were issued:
i. Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 “on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC”. The implementing measures of the Directive are included in European Commission’s Regulation 809/20041. The Directive provisions were integrated into the Greek legal order by L. 3401/2005 on “the prospectus of public offering of securities and admitted to trading”and by regulatory decisions of Hellenic Capital Market Commission repealing the provisions of P.D. 348/1985 and 52/1992 covering the same matters. The stipulations of the Directive and the respective Greek law provide uniform rules for the drawing-up, approval and distribution of the prospectus in view of public offering or admittance to trading. With these adjustments the prospectus becomes the uniform passport for the offering of securities or the admission to trade in capital markets of other member states or even third countries (host countries).
ii. Directive 2003/6/EC of the European Parliament and of the Council on “insider dealing and market manipulation (market abuse)”. The implementing measures of the Directive are included in Directives 2003/124/EC, 2003/125/EC, 2004/72/EC and Commissions’ Regulation 2273/2003. The Directive and the implementing measures were transposed into Greek law by L. 3340/2005 “on the protection of capital market from acts of persons possessing inside information and acts of market manipulation” and by regulatory decisions of the Hellenic Capital Market Commission, repealing P.D. 53/1992. The subject matter of the Directive and the respective Greek law is the abusive practices in the market which are divided into two core categories: those which constitute insider dealing or insider trading and those which constitute market manipulation.
iii. Directive 2004/109/EC of the European Parliament and of the Council on “the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC”. Commission’s Directive 2007/14/EC provides for the implementing measures of the directive above. Both directives’ provisions were introduced into the Greek legal order by L. 3556/2007 on “the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC” and by regulatory decisions of the Hellenic Capital Market Commission, repealing P.D. 360/1985 and 51/1990 regarding the same matters. The Directive stipulates ordinary and extraordinary transparency obligations for issuers of securities.
iv. Directive 2004/39/EC of the European Parliament and of the Council on “markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC”. Commission’s Directive 2006/73/EC and Regulation 1287/2006 provide for the implementing measures of the directive. Both directive provisions and implementing measures were introduced into the Greek legal order by L. 3606/2007 “on markets in financial instruments and other provisions” and by regulatory decisions of the Hellenic Capital Market Commission. This law abolished a great part of the earlier stock exchange legislation which was the core of stock exchange law regulating the framework of stock exchange transactions and of entities providing investment services, i.e. L. 3632/1928, L. 1806/1988, L. 2396/1996. The Directive and the respective Greek law introduces rules on regulated markets and other alternative places of trading by detaching markets in financial instruments from the traditional notion of stock exchanges, enhances the “passport” of investment services firms for them to provide services across EU and introduces strict organizational requirements and rules of conduct for investment firms.
v. Directive 2004/25/EC of the European Parliament and of the Council on “takeover bids”, integrated into Greek legislation by L. 3461/2006 “integration in national law of Directive 2004/25/EC”. Subject matter of the Directive and the respective Greek law is the rights of possessors of securities admitted and traded in a regulated market in case of change of control of the issuer.
3. The above laws, as amended and currently in force, by which the aforementioned directives were integrated regulate basic aspects of the capital market accompanied by scattered provisions in various national laws such as, principally, L. 3016/2002 on corporate governance which provides for corporate governance obligations for companies with listed shares or other securities, sections 39 et seq. of L. 2396/1996 which provide for the dematerialization of listed shares in Greek companies with liability limited by shares, provisions of sections 61 et seq. L. 2533/1997 on “The Athens Stock Exchange Members’Guarantee Fund”or “Guarantee Fund”which undertakes the payment of compensations to investors under specific requirements, provisions of sections 76 et seq. of L. 1969/1991 regulating the constitution of the Capital Market Commission, the provisions regulating the open-ended collective investment funds, until recently included in L. 3283/2004 and now in L. 4099/2012 and the provisions governing close-ended collective investment funds included in sections 28-30 L. 3371/2005, 21-31 L. 2778/1999.
4. It is anticipated that laws 3340/2005 and 3606/2007 will be amended in the context of legislative developments which took place at EU level mainly as a consequence of the financial crisis. More specifically the greater spectrum of investment services and investment instruments, advancements in technology, markets and in new investment products along with the financial crisis which unveiled loopholes in transparency standards and integrity of the markets leaded to the repeal of Directives 2004/39/EC and 2003/6/EC. Thus, two new Directives and two Regulations were issued which enter into force from 2015 onwards. Directive 2004/39/EC is replaced by Directive 2014/65/EU on “markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU” and by Regulation (EU) No 600/2014 “on markets in financial instruments and amending Regulation (EU) No 648/2012”. Directive 2003/6/EC is replaced by Regulation 596/2014 on “market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC”, while it was issued Directive 2014/57/EU “on criminal sanctions for market abuse (market abuse directive)”. A common feature of the new regulatory framework is its expansion in new trading places, new financial instruments and new behaviours.
Underlying rationale: investor protection v. market integrity
1. From the preambles of secondary community (now EU) law on capital markets as developed the last 25 years and being the source of Greek capital markets law, it is presumed that its goal apart from the integration of the European capital market is to secure the effectiveness and integrity of the market and to strengthen investors’ trust in it. This twofold target of capital markets law is not always depicted in the same way in the legislation especially concerning the correlation between the two goals and priority among themselves. The first community Directives clearly refer to protection of investors, strengthening their trust to the market and in the ensuing safeguarding of market’s integrity and effectiveness. It follows that in principle the protection of investors through the special obligations attached to specific acts carried out in the market and the enhancing of their trust in the market constitute the means for securing the effectiveness of the market which is the ultimate goal served. The latest Directives issued under Lamfalussy process forcefully refer to the goal of investor protection in their preamble in parallel with safeguarding the effectiveness and integrity of the market allowing the judgment that the two goals are of equal rank.
2. The Directives’ references on the two goals of the capital market regulation, on the one hand the safeguarding of the effectiveness and integrity of the market and on the other hand the strengthening of investors’ trust in it, cultivated the idea of developing various views concerning the equitable interest/good protected by modern capital markets law. Under a widely supported view, capital markets law aims to protect the orderly functioning of the market which is a public interest and only indirectly to protect investors. It follows that investors have no right to claim that their personal interest is violated by breaches of capital markets law provisions. Such an interpretation which is reinforced by the lack of specific regulations for the provision of legal protection to the investors, while protection of this kind exists in EU consumer law, cannot be unreservedly accepted and in any case it cannot be generally accepted irrespectively of the specific regulatory matter of each law. It would be more proper to approach the capital market law as servicing two goals and protecting two legal interests which are interrelated in such a degree that the protection of the one covers up the protection of the other while the lack of protection of the one disrupts the protection of the other. A properly functioning capital market strengthens the confidence of investors and becomes appealing for them. On the contrary, deficient protection costs in means of trust and is to the detriment of them and the market as well. In some cases it is possible that the servicing of one legal interest is of greater importance weakening or even excluding the protection of the other while there will be cases which will be equally protected. In any case the nature of a capital markets rule as protecting a public or private interest or both is impossible to be decided in abstracto but it depends on its specific content arising from the use of methodologically appropriate interpretation tools.
1. Commission Regulation (EC) No 809/2004 “implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements”
