Definition of 'continuity'

How should the term ‘continuity’ or ‘continuing issue of bonds’ be defined?

Recital 14 of the Directive 2013/36/EU of the European Parliament and of the Council on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (here and after – CRD IV), states, that the scope of measures should therefore be as broad as possible, covering all institutions whose business is to receive repayable funds from the public, whether in the form of deposits or in other forms such as the continuing issue of bonds and other comparable securities and to grant credits for their own account. However, there is no harmonized definition of ‘continuity’. 'Continuity' itself is not directly defined in EU legal acts, however there are at least few relevant directives which might be used as a tool for interpretation in this case. Since the company in question intends to issue bonds which are debt securities it seems appropriate to define continuity using definition of ‘securities issued in a continuous or repeated manner’. However the definitions provided in different directives vary: 1. 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 states that ‘securities issued in a continuous or repeated manner’ means issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months (Article 2 Paragraph 1 subparagraph (l)); 2. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 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 states, that ‘securities issued in a continuous or repeated manner’ means debt securities of the same issuer on tap or at least two separate issues of securities of a similar type and/or class‘. A consumer credit company is intending to issue bonds for the second time already. The company argues, that there is no continuity, as Directive 2003/71/EC states, that securities issued in a continuous or repeated manner’ means issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months (Article 2 Paragraph 1 subparagraph (l)), therefore, there is no continuity when issue of such bonds is separated by the period longer than 12 months. As it is stated by the European Central Bank (opinion of the European Central Bank of 26 April 2006 on a proposal for a directive on payment services in the internal market (ECB/2006/21) observation No. 3.1), the relevant legislation (CRD IV), and relevant cases of the Court of Justice of the European Union (i. e. Case 366/97 Massimo Romanelli [1999] ECR I-855), the deposits or other repayable funds should be understood as all receipts of money if they involve repayment of the money received. The definition of 'continuity' should reflect not only the number of issues as the main criteria, but also the size of issue. There are cases when the only one issue is significant and should be evaluated, i. e. the 4finance issued 200 mln USD worth bonds ( http://www.ise.ie/Market-Data-Announcements/Debt/Individual-Debt-Instrum... ), to fund consumer lending.