The new Prospectus Regulation (Regulation (EU) 2017/1129) entered into force on 20 July 2017, replacing the existing Prospectus Directive (Directive 2003/71/EC) . Most of the new provisions will apply as from 21 July 2019. The Prospectus Regulation also provides for various delegated acts by the European Commission to supplement certain aspects of the new rules in the coming months.
Some provisions apply in the EU Member States immediately, without additional national legislation being required.
These provisions relate to the 10% exemption threshold for admission to trading, which has been increased to 20%. The same 20% threshold will also apply to shares resulting from the exercise or conversion of other instruments (whereas no such threshold existed under the Prospectus Directive). Both types of transactions need to be taken into account in calculating whether or not the 20% threshold has been reached.
As from 21 July 2018, the European harmonisation level for public offerings of securities will decrease from EUR 5 million to EUR 1 million (Article 1.3 of the Prospectus Regulation). Below that threshold, Member States are free to decide on rules for public offerings on their territory, it being understood that they may not impose the same prospectus obligation as that required above the threshold. Member States will, however, be able to lay down (more) limited information obligations, as long as no disproportionate and unnecessary burden is imposed on the issuer.
As from the same date, Member States will also be able to exempt public offerings up to an amount of EUR 8 million over a twelve-month period from prospectus obligations.
For a more detailed discussion of the new Prospectus Regulation, we refer to our previous analysis (Eubelius Spotlights March 2017).