On 24 November 2010, the European Parliament and the Council of the European Union adopted Directive 2010/73/EU amending, inter alia, Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading (‘Prospectus Directive’).
While formerly the Prospectus Directive did not apply to securities and non-equity securities where the consideration for the offer was respectively less than EUR 2 500 000 and EUR 50 000 000, the amendments have increased these thresholds respectively to EUR 5 000 000 and EUR 75 000 000. Moreover, no prospectus is required to be published when securities are offered to the public in the following cases:
- an offer of securities addressed solely to qualified investors;
- an offer of securities addressed to fewer than 150 persons per Member State, other than qualified investors (formerly: fewer than 100 persons);
- investors acquire securities for a total consideration of at least EUR 100 000 per investor, for each separate offer (formerly: EUR 50 000);
- an offer of securities whose denomination per unit amounts to at least EUR 100 000 (formerly EUR 50 000); or
- an offer of securities with a total consideration of less than EUR 100 000, which should be calculated over a period of 12 months.
Furthermore, the powers of the European Commission to adopt delegated acts are extended with a view to better adapting legislation to changes that have occurred on the financial markets. Though such powers are conferred on the European Commission for a fixed term (until 31 December 2014), the European Parliament and the European Council will reserve the right to revoke delegation of the power at any time. The Commission continues to have, inter alia, the competence to adjust these thresholds, which presumably allows for faster adaptation of legislation to the actual needs of the financial markets.
Under the Directive, the amendments must be transposed into domestic legislation at the latest by 1 July 2012. Therefore, if a company is planning to offer securities to the public or list them on the exchange, these considerations should be taken into account.
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What to take into account when securities are offered to the public – amendments to the prospectus directive
On 24 November 2010, the European Parliament and the Council of the European Union adopted Directive 2010/73/EU amending, inter alia, Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading (‘Prospectus Directive’).
While formerly the Prospectus Directive did not apply to securities and non-equity securities where the consideration for the offer was respectively less than EUR 2 500 000 and EUR 50 000 000, the amendments have increased these thresholds respectively to EUR 5 000 000 and EUR 75 000 000. Moreover, no prospectus is required to be published when securities are offered to the public in the following cases:
Furthermore, the powers of the European Commission to adopt delegated acts are extended with a view to better adapting legislation to changes that have occurred on the financial markets. Though such powers are conferred on the European Commission for a fixed term (until 31 December 2014), the European Parliament and the European Council will reserve the right to revoke delegation of the power at any time. The Commission continues to have, inter alia, the competence to adjust these thresholds, which presumably allows for faster adaptation of legislation to the actual needs of the financial markets.
Under the Directive, the amendments must be transposed into domestic legislation at the latest by 1 July 2012. Therefore, if a company is planning to offer securities to the public or list them on the exchange, these considerations should be taken into account.