In November 2020, the European Securities and Markets Authority ("ESMA") conducted a series of updates to its Q&A documents, issuing updated versions of its Q&A on the Prospectus Regulation (Regulation (EU) 2017/1129) and its Q&A on the Transparency Directive (2004/109/EC) on the 9th November 2020.
Updated Q&A on the Prospectus Regulation
Questions 16.1 and 16.2 relating to Brexit have now been added to this Q&A document in order to reflect issues relating to:
- The status of a prospectus which was approved by the UK's Financial Conduct Authority ("FCA") and passported into the European Union while the UK was a member of the European Union or before the end of the UK's transition period, once this transition period comes to an end on the 1st January 2021;
- How issuers having an FCA-approved prospectus should proceed with respect to continuing an offer of securities to the public; the maintenance of an admission to trading on an EU-regulated market; the making of a new offer to the public in an EU Member State, and seeking new admission to trading on an EU-regulated market after the end of the UK's transition period; and
- The requirement for non-EU issuers having the UK as their home Member State in terms of the Transparency Directive to identify an alternative home Member State at the end of the UK's transition period.
Furthermore, ESMA has also updated questions and answers relating to:
- The identification of profit forecasts in prospectuses and the determination as to whether a profit forecast has, in fact, been made in a prospectus; and
- The application of Article 1(5)(a) of the Prospectus Regulation relating to the exemption from the obligation to issue a prospectus where the securities being admitted to trading on a regulated market represent less than 20% of securities of the same class already admitted to trading. This latest update covers how this exemption may be applied in practice as well as adjustments to the basis of calculation of the 20% threshold in the event of legal measures affecting the number of securities admitted to trading, such as a share split.
A copy of the updated ESMA Q&A on the Prospectus Regulation is available here.
Updated Q&A on the Transparency Directive
Linked to point (iii) above, ESMA has updated one question relating to the choice of home Member State in terms of the Transparency Directive after the end of the UK's transition period. ESMA has now clarified that with effect from 1st January 2021, an issuer having the UK as its home Member State and having its securities admitted to trading on one or more EU-regulated markets must determine its home Member State and disclose such home Member State according to the rules set out in the Transparency Directive and this without delay following 1st January 2021. In the event that such determination and disclosure is not made within three months from the end of the transition period, that is by 31st March 2021, ESMA has set out a number of default positions in this regard.
A copy of the updated ESMA Q&A on the Transparency Directive is available here.
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