The European Securities and Markets Authority ("ESMA") has supplemented its Questions and Answers on the Prospectus Regulation document (the "Q&As") in order to provide clarification on the following aspects:
- Order of information in a prospectus;
- Financial information which only covers short periods;
- Use of the same prospectus to make several offers;
- Disclosure requirements concerning statements prepared by an expert;
- Application of an exemption in Article 1(5) of the Prospectus Regulation; and
- Which disclosure annexes should be applied when drawing up a prospectus.
For the purposes of this update, reference hereunder is being made to some of the more salient updates to the Q&As.
Order of information in a prospectus
Q.14.9 of the Q&As confirms that the order mandated by Articles 24 and 25 of Commission Delegated Regulation (EU) 2019/980 is compulsory and cannot be altered frivolously. In other words, a prospectus should begin with a table of contents followed by the summary, risk factors and other information referred to in the annexes Commission Delegated Regulation (EU) 2019/980, across the board. This said, should an issuer wish to attach an additional cover note containing general information about the issuer and the issue before the items prescribed in the mentioned Articles 24 and 25, this is possible.
Disclosure requirements concerning statements prepared by an expert
Q14.8 on valuations and statements prepared by an expert clarifies that reference made in Item 21.1(b) of Annex I of Commission Delegated Regulation (EU) 2019/980 to the inspection of "all reports, letters, and other documents, valuations and statements prepared by any expert at the issuer's request" (emphasis added) should not be interpreted in a restrictive manner (i.e. that solely documentation prepared by an expert at the request of the issuer will need to be made available for inspection). The Q&As clarify that the statement "prepared by any expert at the issuer's request" attaches exclusively to "valuations and statements" - thus meaning that reports, letters and other documents referred to in the registration document are expected to be put on display electronically regardless of whether or not they are prepared by an expert at the issuer's request.
Application of an exemption in Article 1(5) of the Prospectus Regulation
Q15.3 focuses on a hypothetical situation whereby a particular issuance qualifies for an exemption from publication of a prospectus under both Article 1(5)(a) of the Prospectus Regulation (i.e. where the securities constitute less than 20% of the number of securities already admitted to trading on the same regulated market) and Article 1(5)(f) of the Prospectus Regulation (i.e. where securities are offered, allotted or to be allotted in connection with a merger or a division, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2) thereto) (emphasis added). ESMA has confirmed that in such a scenario, provision of the document referred to in Article 1(5)(f) no longer remains a prerequisite to availing of the exemption set out in Article 1(5), since all exemptions listed therein are stand-alone, and if one of them applies there shall be no obligation to publish a prospectus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.