Michael Ahern (Cork East, Fianna Fail)

I outlined the approach we were taking to offers of securities to the public. In essence, we are moving to a situation of accepting the threshold set out in the prospectus directive as the threshold that should determine whether a full prospectus must be prepared. Where securities are offered to the public or listed on a recognised stock exchange, the prospectus directive provides that where the offer is for securities of less than €2.5 million it is not necessary to prepare a prospectus.

Section 42 is designed to require the inclusion of certain warnings for potential investors. It is difficult to know what use will be made of the reduced requirements that this approach will generate. It removes bureaucracy for the company seeking to raise investment and to that extent it is a welcome reduction in regulation for entrepreneurs to raise capital. Investors do not have as much information as they would get in a full prospectus but they must be aware that such investment may be riskier. It can be costly to raise capital and for small entrepreneurs this could prove to be a significant step in their growth. This is an initiative that can be monitored and reviewed after it has been in operation for a number of years. I do not know how many people have invested.