Ireland: Good News For SMEs Accessing Financing On Capital Markets?

EU Regulation 2017/1129 (the Prospectus Regulation) came into force in July 2017. It relates to the publication of prospectuses when either an offer of securities is made to the public or securities are admitted to trading on a regulated market. The Prospectus Regulation repeals and replaces Prospectus Directive 2003/71/EC and the old Prospectus Regulation 809/2004. The majority of the provisions of the new Prospectus Regulation will apply with direct effect from 21 July 2019. This means that it does not necessarily need any national transposing measures to be effective.

The old prospectus regime attracted criticism from various commentators, particularly from small and medium enterprises (SMEs) seeking to raise capital. It was said to impose significant administrative burdens for companies. Prospectuses are usually costly and onerous to produce. Prospectuses can also prove too complex for investors who have to process and consider excessively detailed information.

The main objectives of the Prospectus Regulation are:

  1. the reduction of the administrative burden for issuers when drawing up a prospectus, in particular for SMEs, frequent issuers of all types of securities and secondary issuances
  2. making the prospectus a more relevant disclosure tool for potential investors, especially when investing in SMEs
  3. avoiding overlaps between the EU prospectus and disclosure rules

Key provisions of the Prospectus Regulation 

Minimum monetary thresholds where a prospectus is required

The obligation to publish a prospectus will not apply to capital raisings and crowdfunding projects, from an offer of securities to the public, where the total consideration in the EU is less than €1 million, calculated over a 12 month period. Additionally, each member state will have the discretion to exempt offers of securities to the public where the total consideration in the EU is less than €8 million, calculated over a 12 month period. This is provided it is not subject to notification under Article 25 of the Prospectus Regulation. 

These exemptions will apply from 21 July 2018.

Issuers with securities already admitted to trading

The obligation to publish a prospectus will not apply to an admission to trading on a regulated market where:

  1. a regulated market issuer wants to admit further securities, or
  2. shares are issued on conversion or exchange of exchangeable securities. This is provided that in both cases the new securities/shares, as the case may be, represent less than 20% of the number of securities/shares already admitted to trading on the same regulated market

These exemptions apply as of 20 July 2017.

Prospectus summary

The summary must contain key information such as details on the issuer, securities and the offer of securities to the public and/or the admission to trading on a regulated marker. The summary should be clear and concise and contain specified categories including the most relevant 15 risk factors. The new simplified prospectus will benefit companies by providing more flexibility and less paperwork.

Risk factors

The list of required risk factors is simplified. A prospectus must contain a limited selection of risks which are deemed material and specific to the issuer and its securities. Issuers will be required to assess the materiality of the risk factors based on the probability of their occurrence and the expected magnitude of their negative impact. The risk factors will need to be categorised and, in each category, presented in order of their material risk.

The European Securities and Markets Authority (ESMA) has been tasked with developing guidelines to assist competent authorities in their review of the specificity and materiality of risk factors. The guidelines will also assist in reviewing the presentation of risk factors across categories depending on their nature.

Minimum disclosure

A simplified and standardised prospectus, known as the "EU Growth Prospectus", will be available to SMEs, small issuances by unlisted companies and for non-SMEs where the securities are being admitted to an SME growth market. Issuers making offers to the public of less than €20 million in any 12 month period can avail of this simplified regime.

By 21 January 2019, the EU Commission must adopt delegated acts to supplement the Prospectus Regulation. The delegated acts will specify the reduced content and standardised format and sequence for the EU Growth Prospectus.

Universal Registration Document (URD)

This is a new concept which will allow issuers that draw up a URD each year to benefit from a fast track approval period of five days when seeking approval of a prospectus consisting of separate documents.

Issuers who have a URD approved by the competent authority every financial year for two consecutive years can file subsequent URDs without prior approval, provided one is filed every financial year.

Next Steps

The EU Commission is required to develop and adopt delegated acts and technical standards in a number of areas within 18 months of the Prospectus Regulation coming into force. It has formally requested technical advice from ESMA to prepare these delegated or supplemental acts. ESMA has published three consultation papers:

  1. Consultation Paper on the format and content of the prospectus (ESMA31-62-532)
  2. Consultation Paper on EU Growth prospectus (ESMA31-62-649)
  3. Consultation Paper on scrutiny and approval (ESMA31-62-650)

Consultations on these papers will close on 28 September 2017. ESMA is scheduled to deliver the technical advice to the European Commission by 31 March 2018.


It is hoped that the technical detail adopted in the delegated acts does not add unnecessary complexity to the provisions of the new prospectus regime. Until these delegated acts are adopted and published, it remains to be seen whether the Prospectus Regulation will achieve its objectives to make it cheaper for companies, and in particular SMEs, to access capital and improve prospectus accessibility for investors.

However, the reduction in complexity and reduced specified maximum lengths for prospectuses will be likely to drive production of more focused and clearer documents which will benefit both issuers and market participants generally.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions