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Four things you need to know about the Prospectus Regulation

Sep 29, 2019

The Prospectus Regulation is in full force and replaces Directive (2003/71/EC) (as amended). Garry Wynne breaks down what you should know.

The Prospectus Regulation ((EU) 2017/1129) has been in full force since Sunday 21 July 2019 and replaces Directive (2003/71/EC) (as amended). Broadly, it requires issuers of transferable securities to the public to obtain approval of their prospectus from the Central Bank of Ireland. It also introduces a new Universal Registration Document, summary requirements, a simplified disclosure regime and a Growth Prospectus.

According to the Central Bank, the Regulations apply to people:

  • seeking admission of securities to trading on an EEA regulated market, including the Irish Stock Exchange plc, trading as Euronext Dublin; or
  • making an offer of securities to the public within the EEA, albeit not seeking admission to trading on an EEA regulated market.

Four things you should know

Universal Registration Document

An issuer of securities admitted to an EU-regulated market or recognised multilateral trading facility can now make use of a Universal Registration Document. The Universal Registration Document forms part of the prospectus and must contain legal, business, financial, accounting and shareholding information on the issuer. Once the Central Bank of Ireland approves the Universal Registration Document for two consecutive years, a subsequent Universal Registration Document does not require further approval. 

Summary requirements

Under the new summary requirements, an issuer's prospectus must contain a concise and plain language summary of the key information pertaining to the issuer, securities and offering. It must not be any longer than seven A4 pages and cannot list more than fifteen risks. The requirement to disclose only material information provides greater flexibility to issuers than under the previous law. 

Simplified Prospectus

Secondary issuers that have their securities listed on an EU-regulated or an SME growth market for at least eighteen months can avail of a simplified prospectus. This requires the issuer to publish a summary, a specific registration document, a specific securities note, the risk factors, information pertaining to the Market Abuse Regulations and financial information from the previous year.

Growth Prospectus

SME and other qualified issuers can issue an EU Growth prospectus: a proportionate disclosure document, written in plain language that contains a summary, specific registration documentation and a specific securities note. The Growth prospectus aims to make it easier for these companies to raise capital in the EU. 

Garry Wynne is on the financial services team at LK Shields.