Where it can be made comprehensible via a succinct piece of analysis in the introduction of a Prospectus, the Authority could require that. What I am suggesting would entail Listing Authorities and securities regulators more generally thinking about themselves somewhat differently and, if I may say so, being somewhat less bound by the traditions of public equity markets. This seems unavoidable given the growth in private offerings of complex securities and the involvement of banks in securities-market intermediation. It might require legislation in some jurisdictions to entitle securities regulators to take into account financial stability9. Prior to the crisis, that had hardly been debated anywhere, but IOSCO’s principles of securities regulation have recently been revised to identify reducing systemic risk as one of the three objectives of securities regulation.10 That innovation is big, but it needs to be incorporated into national regimes and practices. Second, is it always right to make a clear distinction between laws and rules governing “public” issues and private placements? Viewed against the historical objectives of securities regulation – fairness, transparency, and investor protection – the public market v. privatetransaction distinction does indeed seem valid. But we need to debate whether the separation is so neat when the public policy objective of financial stability is taken into account. That is because the creation and private placement of very large amounts of particular types of security can affect the amount of risk being borne by the system as a  8  Confusingly, the language and structures vary considerably across countries.
In some jurisdictions, such as the UK, the securities regulator is the listing authority. In others, such as the US, listing documentation is approved by exchanges, with minimum disclosure requirements set by the securities regulator. This is tied up with whether regimes retain an element of Self-Regulatory Organisations. 9  In the UK, although the FSA was given a “financial stability” objective in 2010, it did not apply to its functions as UK Listing Authority. The proposed objectives of the planned new securities and conduct regulator, the FCA, are intended to apply to the UKLA. 10  IOSCO Objectives and Principles of Securities Regulation (2010). 4  BIS central bankers’ speeches  whole in ways that are opaque to everyone. For example, in the USA, as the SEC has commented, a lot of structured-finance products, including pretty well all CDOs and AssetBacked CP, were issued privately and so were exempt from a panoply of disclosure requirements that apply to “registered” offerings.11 Reducing that opacity, and ensuring the integrity of these market mechanisms, could well be in the interests of investors in private placements themselves. This issue is not easy. On the one hand, it is reasonable for the regulatory regime to make allowance for private transactions amongst “consenting adults”. And the issuance of small amounts of any type of security cannot possibly jeopardise stability.