FRENCH STOCK BILL TO BE PRESENTED BEFORE JUNE
The French government will present to
parliament a major bill within two months to overhaul the Paris
stock market, economics and finance minister Edouard Balladur
said.
    Balladur told an Economist conference that on the product
side, a series of new contracts, including share options and
forward contracts in European Currency Units (ECUs), would be
introduced shortly for trading on the Paris bourse.
    The scope of the new bill, however, was to transform the
organisation of equity trading, allowing participants both to
perform a banking role and to trade in equities, he said.
    "Currently, the French market is based on the Napoleonic
principle of separation of equity trading and banking. This
principle has become a dividing, and therefore a weakening,
factor for the market," Balladur said.
    He said under the planned new rules, stock brokers,
currently very specialised and undercapitalised, would be free
to link up with powerful financial institutions after a
five-year transition period.
    Stock brokerages would be subject to legislation similar to
that in the U.K. And U.S., He said, adding the Paris market
would actively attempt to attract foreign securities houses.
    Balladur said the French securities market had enjoyed
strong growth in the past 10 years, with new share and bond
issues totalling 430 billion French francs in 1986, compared
with 53 billion in 1976.
    New share issues alone totalled 63 billion francs in 1986,
up 230 pct from the 1985 level of 19 billion francs, he said.
    Total market capitalisation stood at 3,200 billion francs
at end-1986, compared with 400 billion 10 years earlier, while
stock and bond trades were valued at 2,200 billion francs last
year against 56 billion in 1976, he said.
    Balladur, who also had private talks with U.K. Prime
Minister Margaret Thatcher and Chancellor of the Exchequer
Nigel Lawson, said his government was also preparing a bill to
liberalise the French insurance sector.
    Under the proposed rules, an independent regulatory
insurance commission will be set up. The commission will be
endowed with powers similar to those of a body set up earlier
to monitor the banking sector, Balladur said.
    He said the new bill would also aim to adapt insurance
regulation to take account of the ever-closer integration of
all areas of finance.
 REUTER
