Directive 2003/71/EC set the prospectus requirement at €5 million, but left Member States free to set out national rules below that amount. To ensure legal clarity as to the lower threshold, Article 1(3)(d) provides that no prospectus is required under the regulation for 'an offer of securities with a total consideration in the Union of less than €500 000 ... calculated over a period of 12 months', because the cost of producing the prospectus in this case would be disproportionate to the proceeds.
Similarly, Article 3(2) provides that a Member State may also choose to exempt an offer of securities to the public from the prospectus requirement if (a) the offer is made only in that Member States, and (b) the total amount of the offer is less than €10 million, calculated over a period of 12 months.
The proposal seeks to remove the incentives to issuing debt securities in large denominations. This translates into two measures:
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removing the prospectus exemption for offers of non-equity securities with a denomination above €100 000,3 in order to increase secondary liquidity on bond markets. However, issuers offering non-equity securities solely to qualified investors or requiring a minimum commitment of €100 000 per investor will still benefit from a prospectus exemption;
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replacing the dual (retail/wholesale) standard of disclosure for non-equity securities admitted to trading on a regulated market by a single unified prospectus template.
The proposal contains two non-obligatory sets of specific disclosure rules which replace the proportionate disclosure regime introduced by Directive 2010/73/EU:
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a secondary issuances regime that applies to offers or admissions concerning securities issued by companies already admitted to trading on a regulated market or an SME growth market for at least 18 months.4 In this case, the prospectus has to contain only minimal financial information covering the last financial year;
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an SME regime, which will allow SMEs to draw up a distinct type of prospectus, in the case of an offer of securities to the public where the SMEs have no securities admitted to trading on a regulated market. In this situation, minimum disclosure will consist of a specific registration document and a specific securities note, with the information being adapted to the size and length of the track record of such companies. In addition, under certain specific conditions,5 there will be an optional format for SMEs in the form of a 'question and answer' disclosure document.
Full briefing
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