Prospectus Directive

The Prospectus Directive is the EU framework for the preparation of prospectuses in public offers of securities and where securities are admitted to trading on a regulated market. The purpose of the Directive is to harmonise requirements for the drawing up, approval and distribution of the prospectuses that are published when securities are offered to the public or admitted to trading on a regulated market.

The Prospectus Directive seeks to enhance investor protection and improve the efficiency of the single market. Its key innovation is that a prospectus approved in one Member State is valid across the EU, giving issuers a ‘passport’ across the EU capital markets. The Directive came into force on 1 July 2005.

Developments

The Government has successfully implemented the changes to the Prospectus Directive, which have been made by Amending Directive 2010/73/EC. These changes come into effect across member states on 1st July 2012.

On 31 July 2011, the Government brought into effect two provisions early. These changes are deregulatory, raising the amount of capital and number of investors to whom an offer can be made before a prospectus is required. This is of particular benefit to small companies undertaking smaller offers, giving them more efficient access to capital on the public markets.

On 13 December 2011, HM Treasury and FSA issued a joint consultation on implementing the remaining changes to the Prospectus Directive in to domestic law and the FSA’s Prospectus Rules.

On the 25th May 2012, HM Treasury published a joint Policy Statement in conjunction with the FSA, reporting on the main issues from our joint Consultation Paper, and publishes a draft statutory instrument and FSA near-final rules.

Prospectus Directive: timetable

1 July 2005: The Prospectus Directive comes into force;
23 September 2009: The European Commission publishes a proposal to amend the Prospectus Directive;
24 November 2010: The Amending Directive is agreed in Council and the European Parliament;
11 December 2010: The Amending Directive is published in the Official Journal of the European Union, making changes to the Prospectus Directive and complementary changes to the Transparency Directive;
17 March 2010: The Government issues a consultation to implement deregulatory measures in the Prospectus Directive approximately one year early;
31 July 2011: Early implementation deregulatory measures come into force in the UK;
13th December 2011: HM Treasury and FSA issue a joint consultation paper on implementing the remaining changes to the Prospectus Directive;
1 July 2012: The Amending Directive, making changes to the Prospectus Directive, comes into effect across Member States.

Prospectus Directive

Developments

Prospectus Directive: timetable

Relevant documents & links

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