30 November 2015 – The European Commission has today proposed an overhaul of the prospectus rules to improve access to finance for companies and simplify information for investors. A short overview of the most important changes proposed by the European Commission:
- Scope: There will be a higher threshold (in terms of the offer’s total consideration) to determine when companies must issue a prospectus.
- Prospectus summary: A new prospectus summary is suggested, modelled after the Key Information Document (KID) for PRIIPs.
- Universal registration document: The proposal introduces an optional shelf registration mechanism for “frequent issuers”.|
- Specific disclosure regimes: Alleviated disclosure regimes are introduced for secondary issuances and SMEs.
- Risk factors: Issuers are required to only mention risk factors that are material and specific to the issuer and its securities.
- Incorporation by reference: The scope of documents that can be incorporated by reference is enlarged.
- Publication: ESMA is mandated to develop a online storage mechanism with a search tool that EU investors may use for free.
The proposal will now be discussed by the co-legislators, the European Parliament and Council, who both have the right to propose amendments. The proposed regulation, if adopted, will replace the current Prospectus Directive.