In our last
PLC Update (November 2011), we commented on the UK's early
introduction of the 150 persons exemption and the €5
million threshold requirement for producing a prospectus, plus the
final technical advice published by the European Securities and
Markets Authority (ESMA) on possible delegated
acts concerning the Prospectus Directive (Directive 2003/71/EC)
which included advice on the format, content and length of the
prospectus summary and the proportionate disclosure regime to be
introduced for rights issues and offers by SMEs and small caps.
Following the technical advice that it received from ESMA, the
European Commission (Commission) published a draft
delegated regulation (Amending Regulation) on 30
March 2012 amending the Prospectus Regulation (Regulation
809/2004/EC). The implementation of the Amending Regulation will
have the effect of incorporating the proposals provided by ESMA at
the EU level. Specifically, the proposals regarding the following
are to be adopted:
The format and content (i.e. the mandatory key information) of
The proportionate disclosure regime regarding rights issues
(including certain "near identical rights" in the
definition of "rights issue"); and
The proportionate disclosure regime for SMEs and issuers with
reduced market capitalisation (it should be noted that the Amending
Regulation applies the proportionate disclosure regime in this
regard to all public offers, including IPOs and initial admissions
to regulated markets – which was not the case in the
technical advice provided by ESMA).
The Commission is required to adopt the Amending Regulation by 1
At the UK level, the Financial Services Authority
(FSA) and HM Treasury published (on 13 December
2011) a joint consultation paper relating to the proposed
implementation of the remaining amendments to the Prospectus
Directive into domestic law (specifically, to the Financial
Services and Markets Act 2000 (FSMA) by way of the
Prospectus Regulations 2012) and into the FSA Handbook (primarily
to the Prospectus Rules). Having sought and received feedback on
the consultation paper, the FSA and HM Treasury published a joint
policy statement on the main issues arising from the consultation
paper on 25 May 2012.
The policy statement sets out the responses received to
questions raised in the consultation paper and the subsequent
decisions that the FSA and HM Treasury have made following their
consideration of the responses. A number of consequential
amendments have been made to the draft statutory instrument that HM
Treasury will lay before Parliament to amend FSMA in order to meet
the implementation deadline of 1 July 2012. The key changes that
have been made as a consequence of feedback to the consultation
paper are as follows:
Clarification of the content of the prospectus summary and
amendments to the definition of "key information";
Amendments to the cost saving estimates related to the
proportionate disclosure regime for SMEs and small caps; and
Amendments to the definition of "qualified investor"
so that it ties in fully with MiFID.
It is envisaged that the draft statutory instrument will be made
by Parliament without the need for any significant further changes.
It is not possible to give a date on which the statutory instrument
will be made; however, the FSA and HM Treasury are conscious that
it must be made by 1 July 2012 in order to comply with the deadline
for implementation. Following the making of the statutory
instrument, the FSA will then adopt the draft amendments to the FSA
Handbook to ensure that it too complies with the required
amendments to the Prospectus Directive, with such amendments to
take effect from 1 July 2012. The FSA Handbook will reflect any
consequential changes necessary if any further amendments are
required to the draft statutory instrument before it is
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