On April 3, 2018 the European Securities and Markets Authority (ESMA) published its final report on technical advice under the Prospectus Regulation. The technical advice has been published in response to a mandate from the European Commission in February 2017 and has been developed further following three public consultations. The technical advice covers the format and content of a prospectus, the EU growth prospectus and the scrutiny and approval of prospectuses.
Format and content of prospectus
ESMA sets out a number of changes aimed at easing requirements for issuers, with a view to reducing the cost and administrative burden in using a prospectus, as well as a number of additional disclosure requirements that are deemed necessary for investor protection. This includes limiting the number of sections and annexes to the existing prospectus structure.
In the final report ESMA has made changes to its consultation proposals in relation to:
- the format of the prospectus, the base prospectus and the final terms;
- the content of the share registration document;
- the content of the securities note;
- the content of the registration document for securities issued by third countries and their regional and local authorities;
- the content of the building block for pro forma financial information;
- the list of specialist issuers;
- the content of the universal registration document; and
- the content of the secondary issuance regime.
Content, format and sequence of the EU growth prospectus
The final report identifies the minimum disclosure requirements for the EU Growth prospectus, the order in which the parts of it should be presented, and the format and content of the specific summary required. Changes have also been made to the format of the EU Growth prospectus, the content of the EU Growth registration document, the content of the EU Growth securities note and the content of the EU Growth summary.
Scrutiny and approval of prospectus
ESMA proposes that standard criteria for scrutiny of the completeness, comprehensibility and consistency of the prospectus should be adopted. Beyond the standard criteria, national competent authorities should be afforded a certain level of flexibility as ESMA believes this is necessary to ensure investor protection. ESMA has made changes to the scrutiny of the prospectus, the scrutiny and review of the universal registration document, approval of the prospectus, approval and filing of the universal registration document, as well as the conditions for losing the status of frequent issuer.
The final report has been delivered to the European Commission. Subject to endorsement by the European Commission, the technical advice will form the basis for the delegated acts to be adopted by the European Commission by January 21, 2019.
(ESMA, Final report on technical advice under the Prospectus Regulation, 03.04.18)