On 28 October 2019, ESMA published advice provided by the Securities and Markets Stakeholder Group (SMSG) on 3 October 2019. The advice responded to ESMA's consultation on draft disclosure guidelines under the Prospectus Regulation ("Draft Guidelines"). The Draft Guidelines update the CESR's recommendations for capital markets to take into account the Prospectus Regulation and subsequent developments. The Draft Guidelines aimed to ensure a uniform understanding of disclosure requirements in the Commission Delegated Regulation (2019/980/EU), assist the assessment of prospectus information by competent authorities and promote consistency of interpretation of the Commission Delegated Regulation.

The SMSG generally welcomed the draft Guidelines, particularly the following: using other information than pro forma information and which events to cover with pro forma information (Guidelines 24 and 25); rules for calculation of working capital (Guideline 31); credit institutions and (re)insurance undertakings (Guidelines 34 and 35); and statement of indebtedness (Guideline 39).

SMSG did note some areas that it considers need to be addressed by ESMA, including principles and content of the Operating and Financial Review (Guidelines 2 and 3), due care and diligence (Guideline 9), pro forma financial information (Guideline 18), accountant/auditor reports (Guideline 25) and related party transactions (Guideline 41).

View ESMA's advice here.

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