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April 03, 2018

ESMA is publishing the first Part of its technical advice under the Prospectus Regulation. The technical advice covers the areas of format and content of prospectus, the EU growth prospectus, and the scrutiny and approval of prospectus. Through its technical advice, ESMA proposes simplifications to the format and content of prospectuses. Subject to endorsement by EC, the technical advice will form the basis for the delegated acts to be adopted by EC by January 21, 2019.

The Prospectus Regulation was published in the Official Journal of the European Union on June 30, 2017 and entered into force on July 20, 2017. The regulation requires EC to adopt delegated acts in a number of areas within 18 months of its entry into force.The final report on technical advice has been published in response to an EC mandate of February 28, 2017. It has been developed following extensive consultation with the public through three consultation papers, which were published on July 06, 2017. ESMA submitted the Technical Advice to EC on March 28, 2018, in line with the deadline indicated in the mandate. ESMA proposed the following changes in the three areas:

  • Format and content of prospectus. The advice takes the existing prospectus regime as a starting point. It largely proposes to maintain what has proved to be a set of requirements that works well. ESMA sets out a number of changes to ease issuer requirements, along with a number of additional disclosure requirements that are deemed necessary for investor protection. In addition, ESMA has developed the content of the new Universal Registration Document (URD), a new registration document for issuers of securities that are listed on a regulated market or an MTF. In terms of secondary issuance, the technical advice proposes alleviated disclosure requirements by better taking into account the publicly available information.
  • Format and content of the EU Growth prospectus. The technical advice identifies the minimum disclosure requirements for the EU Growth prospectus, the order in which they should be presented, and the format and content of the specific summary. To ensure a proportionate regime for small and medium enterprises, ESMA has adapted the disclosure requirements to the size of the issuer and the complexity of its operations and balanced them against the needs of investor protection.
  • Scrutiny and approval of the prospectus. The final set of technical advice sets out criteria for scrutiny and procedures for approval and filing of the prospectus. ESMA proposes that standard criteria for scrutiny of the completeness, comprehensibility, and consistency of the prospectus should be adopted. Beyond these standard criteria, national competent authorities should be afforded a certain level of flexibility, which in the view of ESMA is necessary to ensure investor protection. Regarding approval and filing, ESMA proposes procedures that are largely based on the existing provisions of Commission Delegated Regulation 2016/301, with a number of amendments to reflect changes in the Level 1 text.


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Keywords: Europe, EU, Securities, Prospectus Regulation, Technical Advice, Proportionality, ESMA

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