01 May 2015

ICMA responds to EC consultation document on a Review of the Prospectus Directive

Some of the main points comprised by the ICMA response include:

The PD Regulation Annexes currently require issuers to include information in their prospectuses that investors do not necessarily need, which represents a cost to issuers with little or no benefit for investors. Re-interpreting Article 5 and amending the PD Regulation Annexes in a manner which allows issuers to include only relevant information would reduce costs for issuers and would benefit investors, because the prospectus would not be cluttered with information they do not need.

A simple change to enable incorporation by reference of specified future information would limit the need for so many base prospectus supplements to be produced to incorporate interim financial information, thereby improving market efficiency and reducing costs. There are various ways in which the current statutory "withdrawal right", if retained for non-exempt offers, could be addressed under such a new regime, including via a market announcement or special supplement.

Requiring a prospectus for non-exempt offers of securities in the secondary market is unnecessary because, once the securities are admitted to the regulated market, the on-going disclosure regimes under MAD and the TD provide the necessary information for secondary market purchasers.

Full response

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