European Union finance ministers last week signed off the new Prospectus Directive. The text agreed by the European Parliament on July 2 is now on the statute book and should be an important foundation stone in the EU's single market in financial services. If the directive delivers what is promised, there will increasingly be a single market in bonds and share offerings across 25 EU member states and more than 400 million people.

The directive will benefit businesses that want cheaper capital and give investors more choice. At present, any company wishing to market its shares or bonds to investors throughout the European Union needs 15 separate prospectuses with 15 regulatory approvals. In the new year, it will need one prospectus and one approval. When that approval is granted, it need only translate a summary into the national language of each country in which it wishes to sell. This will be a maximum of 2,500 words, and is not subject to separate approval.