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Consultation on amendments to the Prospectus Directive

On 18 February 2015, the European Commission published a consultation paper seeking responses to a number of questions concerning the effectiveness of the Prospectus Directive.

The Commission is currently reviewing the effectiveness of the regime, and the current consultation forms part of this wider review.  The objective of the review is to reform and reshape the Prospectus Directive regime in order to make it easier for companies to raise capital throughout the EU and to lower the associated costs, while maintaining effective levels of consumer and investor protection.

The consultation seeks views on a number of matters in relation to the Prospectus Directive, including the following:

  • Is the principle, whereby a prospectus is required whenever securities are admitted to trading on a regulated market or offered to the public, still valid?  Should a prospectus be required for both these purposes? Should a different treatment be applied to the two purposes?
  • Should the current exemption thresholds be adjusted so that a larger number of offers can be carried out without a prospectus?
  • Would more harmonisation be beneficial in areas currently left to Member States' discretion, such as the flexibility given to Member States to require a prospectus for offers of securities with a total consideration below EUR 5m?
  • Is there a need to include in the scope of the Directive a wider range of securities than "transferable securities"?
  • Following an Initial Public Offering with a full prospectus, could the obligation to draw up a prospectus be mitigated or lifted for any subsequent secondary issuances of the same securities, providing relevant information updates are made available by the issuer?
  • Should a prospectus be required when securities are admitted to trading on a multi-lateral trading facility (such as AIM)?
  • Has the proportionate disclosure regime met its original purpose to improve efficiency and to take account of the size of issuers?  Is it used in practice?  Should it be modified?
  • Should a maximum length of prospectus be imposed?
  • Are there any material differences in the way national competent authorities assess the completeness, consistency and comprehensibility of the draft prospectuses that are submitted to them for approval?
  • Is the EU passporting mechanism of prospectuses functioning in an efficient way?
  • Should a single, integrated EU filing system for all prospectuses produced in the EU be created?
  • Should the following terms be better defined: "offer of securities to the public", "primary market" and "secondary market"?
  • Are there other areas or concepts in the Directive that would benefit from further clarification?

Responses to the consultation should be submitted by 13 May 2015.

The consultation itself can be found here.

Ed Westhead is a Senior Associate in Fieldfisher's Corporate Group in London.

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