Prospectus For The Public Offering of Securities in Europe Vol2

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Prospectus for the Public Offering of Securities in Europe

The Prospectus Directive of 4 November 2003 and the Prospectus Regulation of 29 April 2004 permits a single European passport for a prospectus that has been approved by the competent authority of a Member State to be used for the public offering of securities in other Member States without the need to obtain approval in each State. The Prospectus Directive sets forth the general rules and requirements for the preparation, approval and distribution of prospectuses and defines the content, format and publication of the prospectus, while the Prospectus Regulation defines the minimum information that must be included in the prospectus and its related documents. This second volume contains reports of the implementation of the Prospectus Directive in those EU and EEA Member States not included in the first volume. Together, both volumes give the reader an overview of the implementation throughout the European Union and the European Economic Area. Dirk Van Gerven is a Brussels partner with the Benelux law firm of NautaDutilh and a member of the Brussels and New York Bars. He has extensive experience in all areas of corporate and financial law, including securities regulation. He is in charge of continuing legal education for the Dutch-speaking Bar Association of Brussels and has published widely in the fields of corporate and financial law. Since 2003, he has been a member of the Supervisory Board of Belgiums Banking, Finance and Insurance Commission.
Law Practitioner Series

The Law Practitioner Series offers practical guidance in corporate and commercial law for the practitioner. It offers high-quality comment and analysis rather than simply restating the legislation, providing a critical framework as well as exploring the fundamental concepts that shape the law. Books in the series cover carefully chosen subjects of direct relevance and use to the practitioner. The series will appeal to experienced specialists in each field, but is also accessible to more junior practitioners looking to develop their understanding of particular fields of practice. The Consultant Editors and Editorial Board have outstanding expertise in the UK corporate and commercial arena, ensuring academic rigour with a practical approach. Consultant Editors Charles Allen-Jones, retired senior partner of Linklaters Mr Justice David Richards, Judge of the High Court of Justice, Chancery Division Editors Chris Ashworth Lovells LLP Professor Eilis Ferran University of Cambridge Stephen Hancock Herbert Smith Judith Hanratty BP Corporate Lawyer, retired Keith Hyman Clifford Chance Keith Johnston Addleshaw Goddard Vanessa Knapp Freshfields Bruckhaus Deringer Charles Mayo Simmons & Simmons Andrew Peck Linklaters Timothy Polglase Allen & Overy Richard Snowden QC Erskine Chambers William Underhill Slaughter & May Sandra Walker Rio Tinto Books in the Series Stamp Duty Land Tax Michael Thomas; Consultant Editor David Goy QC Accounting Principles for Lawyers Peter Holgate The European Company, Volume 1 General editors: Dirk Van Gerven and Paul Storm The European Company, Volume 2 General editors: Dirk Van Gerven and Paul Storm Capital Markets Law and Compliance: The Implications of MiFID Paul Nelson Reward Governance for Senior Executives Edited by Carol Arrowsmith and Rupert McNeil Prospectus for the Public Offering of Securities in Europe, Volume I: European and National Legislation in the Member States of the European Economic Area General editor: Dirk Van Gerven Prospectus for the Public Offering of Securities in Europe, Volume II General editor: Dirk Van Gerven Common Legal Framework for Takeover Bids in Europe General Editor: Dirk Van Gerven Accounting Principles for Non-Executive Directors Peter A. Holgate and Elizabeth Buckley

Volume II
General Editor D I R K VA N G E RV E N
CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, So Paulo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521880718 Cambridge University Press 2009 This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published in print format 2009
ISBN-13 ISBN-13
978-0-511-53992-3 978-0-521-88071-8
eBook (EBL) hardback
Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
Contents
Contributors vii Preface ix dirk van gerven, NautaDutilh
Part II Application in the EU Member States 1 Austria florian khol and viktoria ebner Binder Grsswang Rechtsanwlte OG Bulgaria raina dimitrova and angel angelov Borislav Boyanov & Co. Cyprus alexandros tsadiras European University, Cyprus Finland mikko heinonen and klaus ilmonen Hannes Snellman, Attorneys-at-law Ltd France jean-marc desach Gide Loyrette Nouel Germany dr andreas wsthoff and boris klsener SJ Berwin LLP Ireland michael a. greene and cian mccourt A & L Goodbody 3
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Contents
Italy francesco gianni, andrea marani and gaudiana giusti Gianni, Origoni, Grippo & Partners Malta louis de gabriele Camilleri Preziosi Advocates Romania iuliana craiciu Musat & Asociatii Republic of Slovenia eva pergarec, jurij dolan and mitja vidmar Odvetniki Jurij Dolan, Mitja Vidmar & Igor Zemljaric
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10
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11
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12 Spain ramiro rivera and augusto piel Ura Menndez 13 Sweden jan andersson Jnkping International Business School, Linkping University Application in the EEA Member States
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Part III
14 Iceland lafur arinbjrn sigur sson hdl. Logos Legal Services 15 Liechtenstein andreas schurti and alexander appel Walch & Schurti
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Part IV Annexes Annex I Annex II Annex III Index

vi
233 260 365 372
Contributors
austria Florian Khol Viktoria Ebner Binder Grsswang Rechtsanwlte OG bulgaria Raina Dimitrova Angel Angelov Borislav Boyanov & Co. cyprus Alexandros Tsadiras European University Cyprus finland Mikko Heinonen Klaus Ilmonen Hannes Snellman, Attorneys-at-law Ltd france Jean-Marc Desach Gide Loyrette Nouel germany Andreas Wsthoff Boris Klsener SJ Berwin LLP ireland Michael A. Greene Cian McCourt A&L Goodbody italy Francesco Gianni Andrea Marani
Gaudiana Giusti Gianni, Origoni, Grippo & Partners malta Louis de Gabriele Camilleri Preziosi Advocates romania Iuliana Craiciu Musat & Asociatii slovenia Jurij Dolan Eva Pergarec Mitja Vidmar Odvetniki Dolan, Vidmar & Zemljaric spain Ramiro Rivera Augusto Piel Ura Menndez sweden Jan Andersson Jnkping International Business School Linkping University iceland lafur Arinbjrn Sigursson hdl. Logos legal services liechtenstein Andreas Schurti Alexander Appel Walch & Schurti vii
Preface
This is the second volume of the book on the Prospectus Directive. The first volume, containing a general report on the Prospectus Directive and national reports from those Member States which had already adapted their legislation, was published by Cambridge University Press in 2008. The purpose of this book is to provide a comprehensive analysis of the European legal framework and the legislation implementing the Prospective Directive in all Member States of the European Union (EU) and the European Economic Area (EEA). Indeed, the Prospectus Directive has been made applicable by Treaty to the EEA, and public offerings of securities in the EEA can, thus, also benefit from the European passport. The first volume included reports from Belgium, the Czech Republic, Denmark, Estonia, Greece, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Slovakia, the United Kingdom and Norway. Volume II contains reports from the remaining countries of the EU and the EEA, i.e., Austria, Bulgaria, Cyprus, Finland, France, Germany, Ireland, Italy, Malta, Romania, Slovenia, Sweden, Spain, Iceland and Liechtenstein. In total, volumes I and II contain reports on the implementation of the Prospective Directive in all twenty-seven EU Member States, as well as Iceland, Liechtenstein and Norway. This book is, thus, a useful tool for companies seeking to finance their activities through the issuance of securities to the European public and for their advisers and intermediaries involved in such financings. This book was made possible thanks to contributions by distinguished law firms in the EEA and EU member countries. A list of contributors appears at the beginning of each volume. Finally, I wish to thank not only the contributors but also those whose names are not mentioned herein, in particular Bianca Porcelli, Katherine Raab and many others from NautaDutilh, for their continuing support in helping this second volume become a reality. Dirk Van Gerven Brussels, 30 July 2008 ix
PA RT I I Application in the EU Member States
1 Austria
F l or i a n K hol a n d V i k t or i a E bn e r
Binder Grsswang Rechtsanwlte OG
Introduction 3 Competent authority 4 Procedure of prior approval and appeal 6 1 Offer of securities to the public 6 A Procedure 6 B Exemptions 7 C Appeal 8 2 Admission to trading on a regulated market 9 IV Content and format, language and supplements of the prospectus 9 1 Content 9 2 Summary 9 3 Format 10 4 Supplements 10 5 Language 11 V Publication and advertisements 11 1 Method of publication 11 2 Advertisements 13 VI Use of prospectus approved in other (non-EU and non-EEA) countries 13 VII Sanctions 13 VIII Prospectus liability 14 IX Rules applicable to transactions and securities not subject to the Prospectus Directive and Regulation 15 X Conclusion 16
I II III
I
1.1
Introduction
In Austria, the Prospectus Directive was implemented by a comprehensive amendment1 of the Capital Market Act2 (the CMA). The CMA applies to all public offers3 of securities or investments within Austria and governs the necessity, content and publication requirements of a prospectus in the event of a public offer of securities or investments, as well as the content and publication requirements of 3
1.1
a prospectus for admission to trading on a regulated market of an Austrian stock exchange. The amended CMA entered into force on 10 August 2005. 1.2 Until the implementation of the Prospectus Directive in August 2005, as in most other Member States, different rules applied in Austria for prospectuses in connection with the public offer of securities or investments and in connection with the listing admission of securities on an Austrian stock exchange: (i) The CMA provided, inter alia, for the publication of a prospectus in any case of an initial public offer of securities or assets or investments in Austria; and (ii) the Stock Exchange Act4 as amended, provided, inter alia, for the publication of a prospectus for the listing admission of securities or investments on the official and semi-official market of an Austrian stock exchange. Since the implementation of the Prospectus Directive in August 2005, the content and publication requirements for prospectuses are exclusively governed by the CMA. The Stock Exchange Act governs, inter alia, the rules for listing admission of securities, insider trading and transparency. In addition to the CMA and the Stock Exchange Act, the competent national supervisory authority (the Financial Market Authority (FMA)) issued several regulations and circular letters on specific topics, mainly to clarify the CMA and Stock Exchange Act .5
1.3
1.4
II
1.5
Competent authority
In Austria, until the implementation of the Prospectus Directive in August 2005, the Vienna Stock Exchange (Wiener Brse) was competent for the approval of prospectuses for the admission to trading but not for the approval of prospectuses for public offers without admission to trading. As the Vienna Stock Exchange during the discussion of the implementation of the Prospectus Directive refused to become competent for the approval of all prospectuses, the competence for such approvals has been allocated to the FMA (Art. 8a CMA). The FMA is an independent, autonomous and supervisory authority for the Austrian financial market, established as an institution under public law. It is responsible for the supervision of credit institutions, insurance undertakings, pension funds, staff provision funds, investment funds, investment service providers, companies listed on the stock exchange, as well as stock exchanges themselves. The FMA monitors both stock market and over-the-counter (OTC) trades. To supervise the Austrian financial market, the FMA takes any measures necessary to ensure compliance with provisions of law; defines minimum standards and publishes regulations putting legal provisions into concrete terms; works out, in discussions with market participants, proposals to ensure
1.6
1.7
Austria
1.10
that the Austrian financial market permanently adheres to high standards; represents Austrias interests in EU and other international bodies; and supports cooperation with other supervisory authorities, such as the International Organisation of Securities Commissions (IOSCO), the Committee of European Securities Regulators (CESR) and in the expert groups of the European Commission. 1.8 With respect to public offers of securities and admissions to trading the FMA is especially competent for: (i) the public offer of securities in the territory of Austria; (ii) approval of prospectuses for public offers in Austria and admissions to trading on Austrian regulated (official and semi-official) markets; and (iii) admissions to trading on a regulated market of another Member State of the EEA in the event that Austria is the home Member State6 of the issuing company . 1.9 In addition to the FMA, Oesterreichische Kontrollbank Aktiengesellschaft (OeKB) serves as Austrias main financial and information service provider for the export industry and the capital market. In this function, OeKB is the competent notification office (Meldestelle), which acts as a depository for the prospectuses to be issued in compliance with the CMA and the Investment Fund Act.7 The notification office examines prospectuses, submitted as required for the admission to trading on a regulated market and for public offers of securities and investments as defined in the CMA, as to whether the liability of drawing up a prospectus has been formally complied with. A further task is the safekeeping of prospectuses for a period of fifteen years from the date of submission of the prospectus to ensure preservation of evidence in case of possible future compensation claims. The notification office has to answer inquiries regarding compliance with the formal publication regulations according to the CMA within three working days, and provides, upon request, copies of prospectuses filed (Art. 12(2) CMA). Further, within the framework of implementing the EU Transparency Directive8 in Austria , OeKB was assigned to establish a system for central storage of regulated information on Austrian issuers (see no. 40 of this chapter). OeKB acts as the officially appointed storage system and operates this system named IssuerInformationCenter Austria. The purpose of the IssuerInformationCenter Austria is to receive, store and make available on an anonymous basis regulated information on Austrian issuers, whose securities are admitted to trading on a regulated market. Issuers can quickly and easily transfer regulated information via OeKBs web-based EmittentenPortal Austria (IssuersPortal) within a secure environment, i.e., via electronic upload of the documents, either in pdf- or txt-format. Subsequently, the documents are forwarded to the IssuerInformationCenter. All documents are filed in their original format and are available for download in their original format free of charge.9 5
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1.11
1.11
The competence of the FMA is interrelated with the question of whether Austria may be considered the home Member State as set forth in the CMA (Art. 1(1)(12) CMA). It depends on a number of circumstances whether the FMA is competent to approve a prospectus: (i) the issuers place of business in accordance with applicable law or its articles of association (i.e., situated in Austria, in another Member State or outside the European Union); (ii) the type of securities which are offered (i.e., equity or non-equity securities); (iii) the place where the offer of securities is made. In the most relevant cases the competence of the FMA further depends on whether the offer includes equity securities or non-equity securities with a nominal value per security of less than 1,000 by an issuer with a registered office in Austria .
1.12
If Austria is not the home Member State, the FMA can transfer its authority to approve a prospectus to the Member State where the offer or admission to trading takes place (Art. 8(6) CMA). Such transfer of authority will only occur when the link with Austria is remote and the FMA considers another regulatory authority to be better qualified to examine the prospectus. Likewise, the FMA can in similar circumstances also accept a transfer of power from the national regulatory authority of another Member State provided that this authority agrees with the transfer to the FMA (Art. 8(6) CMA) .
III 1
A
Procedure of prior approval and appeal Offer of securities to the public

Procedure
1.13
A public offer of securities and assets shall be permissible within Austria only if a prospectus that has been prepared and approved in accordance with the CMA by the FMA (or by a competent authority of another EU Member State) is published at least one working day in advance (Art. 2 CMA). A public offer is a declaration of the intention to sell securities or assets or investments addressed to the general public. Such declaration of intention addressed to the general public is in any case deemed to be given if the identity of the persons to whom the offer is addressed has not been specified by the offeror before submitting the declaration (Art. 1(1)(1) CMA). To receive the approval for a prospectus an application has to be filed with the FMA with, inter alia, the following documents attached: (i) a signed prospectus; and (ii) a cross-reference list if the prospectus is not drawn up exactly
1.14
Austria
1.17
in the manner as provided for pursuant to the relevant Annexes of the Prospectus Regulation. 1.15 Within ten working days of receipt of the application for approval of a prospectus, the FMA shall announce whether it needs more information or if the prospectus is approved. This period is statutorily extended to twenty working days if the prospectus is filed for an initial public offer. If the FMA does not react within the said time periods the prospectus shall not be deemed approved (Art. 8a(3) and (4) CMA). The FMA shall approve the prospectus if it is complete, coherent, clear and complies with the CMA. In practice, the draft prospectus as well as the timetable for the offer are filed and discussed with the FMA prior to the formal application to ensure approval in time. Private placements are not subject to the prospectus requirement as they do not qualify as public offers of securities or investments. In case of a private placement, the offeror is entitled to publish an offering memorandum or any other information without the approval of the FMA to the extent that this memorandum and/or information concerns a private placement addressed only to a limited circle of persons (for further exemptions see nos. 17 to 18 of this chapter). In this case, the content and publication requirements of the Prospectus Directive and Prospectus Regulation will not apply. However, certain notification requirements have to be considered (see V. Publications and Advertisements of this chapter) .
Exemptions
1.16
1.17
The CMA provides exemptions from the obligation to publish a prospectus for certain public offers (Art. 3 CMA). The exemptions correspond more or less with the exemptions set forth in Article 4(1) of the Prospectus Directive (for details see chapter 1, no. 15). In practice, the most relevant exemptions from the obligation to publish a prospectus are: (i) offers of securities addressed only to Qualified Investors (see no. 18 of this chapter);10 (ii) offers of securities addressed to fewer than 100 persons in a given Member State, other than qualified investors; (iii) offers of securities addressed to investors who acquire the securities for a total consideration of at least 50,000 per investor for each separate offer; (iv) offers of securities whose denomination per unit amounts to at least 50,000; and/or (v) offers of securities having a total consideration of less than 100,000, calculated over a period of twelve months. The above described offers do not qualify as public offers of securities and can be marketed without a prospectus. Moreover, any publication of information 7
1.17
about the offer, so long as it remains within the above limits, will not be subject to prior approval by the FMA and the content and publication requirements for prospectuses will not apply (see V. Publications and Advertisements of this chapter). Any subsequent resale of the securities shall be considered as a separate offer subject to the prospectus obligation if it does not fall within one of the above exemptions. 1.18 Qualified investors are deemed not to require the protection of a prospectus as they are thought to have sufficient expertise and knowledge to ascertain the risks attached to the securities offered. The following entities/persons are considered qualified investors: (i) legal entities regulated or authorised to operate in the financial markets, including credit institutions, investment firms, other authorised or regulated financial institutions, insurance companies, collective investment vehicles and their management companies, pension funds and their management companies, commodities dealers, and entities not authorised or regulated for this purpose whose sole object is to invest in securities; (ii) national and regional governments, central banks, international and transnational institutions such as the International Monetary Fund, the European Central Bank, the European Investment Bank and similar international organisations; (iii) legal entities that do not qualify as small-and medium-sized enterprises (SMEs);11 (iv) natural persons who reside in Austria and who expressly apply to be deemed a Qualified Investor by the FMA to be so characterised if they meet at least two of the following criteria: (1) the person has carried out an average of at least ten transactions of significant value on the securities markets per quarter during the past four quarters; (2) the value of that persons securities portfolio exceeds 500,000; and (3) the person works or has worked for at least one year in the financial sector in a position that requires knowledge of securities investments .
C Appeal
1.19
Any decision of the FMA can only be appealed before the Austrian Administrative Court (Verwaltungsgerichtshof) or under certain circumstances before the Austrian Constitutional Court (Verfassungsgerichtshof) within six weeks as from the notification of the decision. In principle, such appeal has no suspension effect with regard to the decision of the FMA unless suspended execution is granted by the Administrative Court or Constitutional Court. In addition, the courts may under certain circumstances grant interim measures to safeguard interests of the parties .
1.20
Austria
1.26
2
1.21
Admission to trading on a regulated market

As mentioned above, securities may not be admitted to trading on a regulated market unless a prospectus has been approved by the FMA or the competent regulator of another Member State and was duly published. In this case, the procedure to request approval of the prospectus is the same as the procedure applicable to a public offer (see nos. 13 through 18 of this chapter) .
IV 1
1.22
Content and format, language and supplements of the prospectus Content

A prospectus shall contain all information that is needed in order to enable investors to reach an informed decision on the financial situation of the issuer, in particular on its assets and liabilities, the earnings situation, future prospects and rights attached to the securities or investments (Art. 7(1) CMA). Specifically, a prospectus has to be drawn up pursuant to the information referred to in Article 3 to Article 24 of the Prospectus Regulation and the Annexes thereto (for details see chapter 1, nos. 29 to 33). In case the final amount of securities or investments to be offered or the final offer price or exchange ratio is not known at the beginning of the public offer, which is usually the case in initial public offerings (IPOs), such information must not be included in the approved prospectus. However, the final amount of securities to be offered or the final offer price has to be filed with the FMA and published accordingly (see no. 33 of this chapter) (Art. 7(5) CMA). Thus, the main rule for contents of the prospectus contained in Article 5 of the Prospectus Directive is almost literally implemented into Austrian law.
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2
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Summary
As a general rule, each prospectus should contain a summary.12 The summary must briefly convey the essential characteristics and risks associated with the issuer, any guarantor and the securities (Art. 7 CMA). Further, the summary must contain a warning (Art. 7(2) CMA) that: (i) it should be read as an introduction to the prospectus; (ii) any decision to invest in the securities should be based on the prospectus as a whole; (iii) if a claim with respect to the information contained in the prospectus is brought before the courts, the issuer has to bear the cost of translating the prospectus before the commencement of legal proceedings; and (iv) those persons who have prepared the summary, including any translation thereof, and applied for its notification, shall be held civilly liable but only if the summary is misleading, inaccurate or inconsistent when read together with the rest of the prospectus. 9
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The summary must be drawn up in the language in which the prospectus was originally prepared. The CMA neither provides for a translation of the summary into German13 if the prospectus is drawn up in English or another language accepted by the FMA in a regulation (see no. 32 of this chapter) nor for a limit of 2,500 words as recommended by the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 35) .
3
1.28
Format
At the offerors/issuers discretion the prospectus can be drawn up as a single document or as multiple separate documents. A prospectus consisting of multiple separate documents shall allocate the content to: (i) a registration document (with information relating to the offeror or the issuer); (ii) a securities note (with information relating to the securities to be offered or admitted to trading); and (iii) a summary note (Art. 7(3) CMA).
1.29
Using a tripartite prospectus may be useful if the issuer intends to make multiple offers of different types of securities within one year (being the term within which the approval by the competent authority of a registration document remains valid) . For the public offer or admission to trading of certain types of securities (such as non-equity securities, including warrants in any form issued under an offering programme, or non-equity securities issued in a continuous or repeated manner by credit institutions), the prospectus can, at the discretion of the issuer, offeror or person requesting admission to trading on a regulated market, consist of a base prospectus containing all relevant information about the issuer and the securities offered or to be admitted (Art. 7(4) CMA). Using a base prospectus may be useful in the event the issuer intends to offer non-equity securities in the framework of a debt issuance programme. The final terms of the offer can be omitted from the base prospectus and can be published and deposited with the FMA at the time of each individual offer of debt securities. These final terms do not need to be approved by the FMA. It is important to note that the FMA will see to it that final terms are only used to communicate information to the market which has already been provided for as an option in the base prospectus .
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4
1.31
Supplements
In the event that a significant new factor arises or a material mistake or inaccuracy of the approved prospectus occurs in the period between approval of the prospectus and the close of the offer or the admission to trading, the issuer shall prepare a supplement to the prospectus. This supplement must be
10
Austria
1.34
immediately published in the same way as the prospectus has been published (see no. 33 of this chapter) and simultaneously filed with the FMA. The FMA has to approve the supplement within a maximum period of seven working days (Art. 6(1) CMA) .
5
1.32
Language
The prospectus for public offers in Austria or an admission to trading on an Austrian stock exchange shall be prepared in German and English.14 The summary must be drawn up in a generally understandable language. In practice, English is commonly accepted as a generally understandable language. Nevertheless, it may be argued from a consumer protection point of view that only German qualifies as a generally understandable language. Therefore, it is common practice that, for example, terms of conditions of a bonds offer are drawn up in both the English and the German language irrespective of whether the other parts of the prospectus are drawn up in English only .
V 1
1.33
Publication and advertisements Method of publication

The German version of Article 14(1) and (2) of the Prospectus Directive was more or less literally copied into the CMA (Art. 10(2) and (3) CMA). The prospectus is therefore deemed to have been duly published if: (i) it is (entirely) published in the Amtsblatt zur Wiener Zeitung (Austrias official gazette) or in a newspaper distributed throughout Austria;15 or (ii) is made available free of charge in printed form at the market where the securities will be admitted for trading or at the registered office of the issuer or16 at the offices of the financial intermediaries, including paying agents; or (iii) is published in electronic form on the issuers website and as the case may be on the website of the financial intermediaries including paying agents; or (iv) in electronic form on the website of the regulated market where the admission to trading has been applied for; or (v) in electronic form on the website of the FMA or a website of a third party retained by the FMA, provided that the FMA has decided to provide such services .17
1.34
In a circular letter (the Circular Letter),18 the FMA stated that for publication to be deemed valid in Austria the prospectus must be available in Austria or may be obtained within Austria. This statement implies that for the purpose of a public offer in Austria it may not be sufficient to make the prospectus available solely at a registered office of an issuer outside of Austria without at the 11
1.34
same time making it available at the registered seat of financial intermediaries within Austria . 1.35 Further, the FMA must be informed in advance on how the prospectus is being published and where it will be available (Art. 10(3) CMA). In the Circular Letter, the FMA has clarified that this requirement, however, only applies to prospectuses approved by the FMA and not to prospectuses passported into Austria . Austria does not require issuers, which publish their prospectus in a newspaper or in printed form in accordance with Article 14(2)(a) or (b) of the Prospectus Directive, to publish their prospectus in an electronic form over the internet in accordance with Article 14(2)(c) of the Prospectus Directive . Austria exercised the option provided for in Article 14(3) of the Prospectus Directive and thus requires the publication of a notice stating how the prospectus has been made available and where it can be obtained by the public. Accordingly, such notice may be published either in a newspaper or in electronic form on the website (Art. 10(4) CMA) . However, this provision is in contradiction of Article 31 of the Prospectus Regulation, which requires such notice to be published in a newspaper only. Given the direct applicability of the Prospectus Regulation in Austria, the means of publication as provided for in the CMA is, therefore, limited to publication in newspapers only. With regard to the required content and timing for the publication of such notice, see Chapter 1, vol. I, of this book, no. 56. According to the Circular Letter, the obligation to publish such notice only applies to a prospectus or the base prospectus, but not to the publication of the final terms or supplemental information to the prospectus according to Article 5(4) and Article 8(1) of the Prospectus Directive (Art. 7(4) CMA) . According to Article 14(4) of the Prospectus Directive, the FMA publishes a list of all prospectuses approved by it over its website.19 A hyperlink to the published prospectus on the website of the issuer is currently not available . OeKB in its capacity as notification office (see nos. 9 to 10 of this chapter) has to be provided, without undue delay, with regulated information on the securities or investments, which are offered for the first time in Austria. Further offers of the same securities do not have to be notified. The following details about the offer in Austria have to be submitted to OeKB: issuer, prospective date of the issue, total volume, minimum denomination, maturity, information on the identification of the investment (ISIN or other identification) and, if applicable, the reasons for the exemptions to publish a prospectus. The information will be included in the so-called issuing calendar, which is administered by OeKB to monitor issues of securities and other investments as defined in the CMA (Art. 13 CMA) in Austria to provide an insight into the extent and manner of the expected capital market utilisation. Public as well as private placements
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1.38
1.39
1.40
12
Austria
1.44
are subject to this notification requirement . An exemption only exists for offers of investment fund units within the meaning of Article 1(2)(a) and (c) of the Prospectus Directive, offers of certain participation certificates,20 offers of shares within the meaning of Article 4(1)(d), Article 3(2)(e) of the Prospectus Directive, and certain shares offered to existing or former employees .
2
1.41
Advertisements
The advertisement restrictions of Article 15(1) to (6) of the Prospectus Directive were almost literally copied into the CMA (Art. 4(1) CMA). For details see Chapter 1, vol. I, of this book, nos. 60 to 63.
VI
1.42
Use of prospectus approved in other (non-EU and non-EEA) countries

Prospectuses approved by the home Member State of a foreign offeror/issuer and supplements thereto are valid for a public offer or admission to trading in Austria provided that the FMA was appropriately notified in accordance with Article 18 Prospectus Directive (Art. 8b CMA). Austria does not require a German translation of the summary for the public distribution in Austria (see no. 27 of this chapter) . Further, a notice must be published in an Austrian newspaper stating how the prospectus or base prospectus has been made available and where such documents can be obtained by the public (Art. 14(3) Dir.; see no. 35 of this chapter). In addition, OeKB must be provided with certain information for the issuing calendar on the securities offered in Austria (see no. 40 of this chapter).
1.43
VII
1.44
Sanctions
In connection with public offers of securities or other investments that require a prospectus everyone who: (i) offers securities or other investments without timely publication of a prospectus or supplements to the prospectus; (ii) provides wrongful information in a published prospectus or a supplement thereto or conceals relevant information; (iii) does not publish financial reports as required by the CMA; or (iv) includes untruthful data or conceals relevant information in financial reports; may face a maximum penalty of up to two years imprisonment or a monetary fine of up to an amount equal to the individuals income for 360 days (360 Tagesstze Ersatzfreiheitsstrafe), provided that the offence is not subject to more severe sanctions according to other applicable laws (Art. 15 CMA). 13
1.44
The perpetrator under certain circumstances will not be penalised for acts mentioned in (i) and (ii) above if he or she voluntarily prevents the sale of the securities or investments (Art. 15(2) CMA). 1.45 Further, the CMA provides for a fine of up to 50,000 for the following acts committed in connection with public offers of securities or other investments which require a prospectus: (i) offers of securities or investments, if the prospectus, any supplements or publications do not comply with the provisions of the CMA or the issuer provides or publishes incorrect financial reports; (ii) if the issuer or prospectus auditor provides wrongful information in a prospectus or supplements thereto or an auditor provides wrongful information in the financial reports or signs off a prospectus without having obtained the required insurance coverage ;21 (iii) violations of the advertisement rules (see no. 41 of this chapter); (iv) if offerors of debt securities that are required to publish their ratings do not publish the rating or do not deliver the rating information to the notification office in due time (see no. 40 of this chapter); (v) if offerors do not provide OeKB with the required information for the issuing calendar (see no. 40 of this chapter) even if not relating to a public offer; (vi) if offerors do not provide the notification office with the prospectus and its supplements in a timely manner; (vii) the offer of debt securities without a required licence ; (viii) if an auditor signs off a prospectus, supplement thereto or financial reports while being barred from doing so (e.g., based on a conflict of interest); or (ix) non-compliance with certain orders of the FMA, failure to immediately forward the auditors check mark for prospectus supplements to the notification office, non-compliance with certain information requirements or violation of the advertisement or publication rules pursuant to Chapter V of the Prospectus Regulation (Art. 16 CMA) .
VIII
1.46
Prospectus liability
The CMA provides for a special joint and several liability of persons who have assumed responsibility for the prospectus or parts of it for the correctness and integrity of the prospectus (prospectus liability Prospekthaftung) (Art. 11 CMA). According to the prospectus liability investors shall have the right to claim damages arising out of placing their trust in the correctness or integrity of the information contained in the prospectus or any other information required to be published pursuant to the CMA that is relevant for assessing securities or investments from:
1.47
14
Austria
1.51
(i) the issuers for any incorrect or incomplete information for which they are responsible themselves or for which their staff or any other persons whose services were used to draw up the prospectus are responsible; (ii) the prospectus auditors for any incorrect or incomplete information due to their own gross negligence or of their staff or of any other persons whose services were used to audit the prospectus; (iii) any persons who, either in their own name or for third parties, have accepted the investors purchase declaration, and from the mediator of the contract if the person acting as intermediary is professionally engaged in trading or mediating securities or investment transactions and these persons or their staff knew of the incorrectness or incompleteness of the information pursuant to (i) or of the audit, or were unaware of this due to gross negligence; (iv) the auditor of the annual accounts, who, knowing of the incorrectness or incompleteness of the information in the meaning of (i) above and knowing that the annual accounts confirmed by him or her form part of the prospectus, has given the annual accounts an audit opinion . 1.48 In case securities or investments of a foreign issuer are offered the party making such offer, which is subject to the obligation to publish a prospectus within Austria, shall also be liable pursuant to (i) above. The liability towards investors may not be restricted or excluded in advance and is, if not intentionally caused, limited to each investor to the purchase price including fees and interests. Further, claims based on this prospectus liability have to be filed with the court within five years after the public offer was made .
1.49
IX
1.50
Rules applicable to transactions and securities not subject to the Prospectus Directive and Regulation
The CMA not only governs securities or investments subject to the Prospectus Directive and the Prospectus Regulation, but also contains special rules for the public offer of other investments. Such other investments comprise property rights for which no securities are issued, but also certain money market instruments with a duration of less than twelve months.22 Prospectuses of other investments are not subject to authorisation by the FMA. Rather, such offers require the publication of a prospectus fulfilling specific minimum content requirements provided for in schedules C to E of the CMA. The prospectus has to be audited either by a credit institute or an auditor. Certain other requirements applicable to securities are not applicable to other investments either, such as the maximum duration of a prospectus or certain language requirements. 15
1.51
1.52
1.52
Public offers of investment funds are subject to the Austrian Investment Fund Act23 (governing the public distribution of Austrian as well as foreign UCITS and non-UCITS funds, respectively) to the Austrian Real Estate Investment Fund Act.24
X
1.53
Conclusion
After more than two years of practice with the implemented Prospectus Directive and Prospectus Regulation in Austria, the FMA has established a good and efficient practice of handling the new prospectus regime, especially in regard to the passporting of prospectus and all regulatory aspects of prospectus approvals for public offers of securities or admissions to trading on regulated markets. Thus, the approval process as well as the coordination and communication between all market players has become easier, which is a benefit especially in cross-border public offers .
Notes
1. Bundesgesetz, mit dem das Kapitalmarktgesetz, das Brsegesetz, das Investmentfondsgesetz, das Wertpapieraufsichtsgesetz und das Finanzmarktaufsichtsbehrdengesetz gendert werden; BGBl I 78/2005 of 28 July 2005. 2. Bundesgesetz ber das ffentliche Anbieten von Wertpapieren und anderen Kapitalveranlagungen und ber die Aufhebung des WertpapierEmissionsgesetzes (Kapitalmarktgesetz KMG) sowie ber die Abnderung des Aktiengesetzes 1965, des Genossenschaftsgesetzes, des Nationalbankgesetzes 1984, des Kreditwesengesetzes und des Versicherungsaufsichtsgesetzes; BGBl. Nr. 625/1991 of 6 December 1991. 3. Certain notification requirements provided for in the CMA also apply to private offers; see no. 40 of this chapter. 4. Bundesgesetz vom 8. November 1989 ber die Wertpapier-und allgemeinen Warenbrsen und ber die Abnderung des Brsesensale-Gesetzes 1949 und der Brsegesetz-Novelle 1903 (Brsegesetz 1989 BrseG); BGBl. I Nr. 555/1989 of 29 November 1989. 5. Available via www.fma.gv.at. 6. As defined in Art. 1(1)(12) CMA. 7. Bundesgesetz ber Kapitalanlagefonds (Investmentfondsgesetz InvFG 1993), Official Gazette I No. 532/1993 as of 30 July 1993. 8. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC; Official Journal L 390 as of 31 December 2004. 9. The IssuerInformationCenter is available under http://issuerinfo.oekb.at. 10. As defined in Art. 1(1)(5a) CMA.
16
Austria
1.53
11. Small- and medium-sized enterprises are companies which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: (i) an average of less than 250 employees during the last financial year; (ii) a balance sheet total not exceeding 43,000,000; and (iii) net annual turnover not exceeding 50,000,000 . 12. A summary is not required if the prospectus relates to the admission to trading on a regulated market of non-equity securities having a denomination of at least 50,000 (high-denomination non-equity securities); see Art. 7(2) CMA . 13. See Art. 19(2) and (3) Dir., and, for details, Chapter 1, vol. I, of this book, no. 50. 14. Pursuant to a circular letter of the FMA, currently only German and English qualify as accepted languages; see Rundschreiben der Finanzmarktaufsicht of 29 March 2007 zu Fragen der Umsetzung der Prospektrichtlinie in Kapitalmarktgesetz und Brsegesetz, available at www.fma.gv.at. 15. A prospectus may only be published in a newspaper other than the Amtsblatt zur Wiener Zeitung, which fulfils the conditions stipulated in section 5 of FMAs minimum-content, publication and language regulation (Verordnung der Finanzmarktaufsicht ber die Mindestinhalte von Prospekte ersetzenden Dokumenten, ber die Verffentlichung von Prospekten in Zeitungen und ber die Sprachenregelung, Official Gazette II No. 236/2005), i.e., a newspaper that is published on working days and is regularly available throughout Austria and exceeds the following thresholds on average per year: (i) 100,000 pieces print run; and (ii) 75,000 newspapers distributed in Austria . 16. The English version of Article 14(2)b of the Prospectus Directive states that a printed form of the prospectus shall be made available at the registered office of the issuer and at the offices of the financial intermediaries, including paying agents. The German version, however, contains a translation error and thus provides that the prospectus shall be made available at the registered office of the issuer or at the offices of the financial intermediaries, including paying agents. As a result of the copy and paste method applied by the Austrian legislator this error was also incorporated in section 10(2)(2) of the CMA . 17. So far the FMA has neither decided to operate such a website itself nor to delegate such services to a third party. 18. Rundschreiben der Finanzmarktaufsicht of 29 March 2007 zu Fragen der Umsetzung der Prospektrichtlinie in Kapitalmarktgesetz und Brsegesetz, available at www.fma.gv.at. 19. Currently accessible via https://webhost.fma.gv.at/fmaprospekt/liste/gebilligte_Prospekte.pdf. 20. The exemption applies to participation certificates within the meaning of 6 Bundesgesetz of 18 February 1982 ber die Errichtung und Verwaltung von Beteiligungsfonds (Beteiligungsfondsgesetz), Official Gazette I No. 111/1982, as amended. 21. For the auditing of prospectuses relating to securities or other investments, auditors have to obtain insurance indemnity in the amount of 3.65 million per year. For the auditing of prospectuses relating to real estate funds
17
1.53
(Veranlagungsgemeinschaft in Immobilien), auditors have to obtain insurance coverage in the amount of 18.2 million per year. 22. Article 1(1)(3) CMA defines other investments as property rights for which no securities are issued arising out of direct or indirect investments of the capital of several investors for their collective account and collective risk or for collective account or risk together with the issuer if the administration of the capital invested is not overseen by the investor him or herself; other investments shall also comprise all fungible rights for which securities are issued, which do not qualify as transferable securities pursuant to Article 1(4) of Directive 93/22/EEC with the exemption of money-market instruments with a duration of less than twelve months. 23. Bundesgesetz ber Kapitalanlagefonds (Investmentfondsgesetz InvFG 1993), Official Gazette I No. 532/1993 as of 30 July 1993. 24. Bundesgesetz ber Immobilienfonds (Immobilien-InvestmentfondsgesetzImmoInvFG), Official Gazette I No. 80/2003 as amended. This statute contains regulatory provisions for Austrian real estate investment funds only, whereas foreign real estate investment funds are subject to the (general) Investment Fund Act.
18
2 Bulgaria
R a i na Di m i t rova a n d A nge l A nge l ov
Borislav Boyanov & Co.
Introduction 19 The Commission 21 General principles 22 1 Exemptions 22 IV The prospectus 26 1 Contents of the prospectus 26 2 Base prospectus 27 3 Prospectuses consisting of separate documents 28 4 Omission of information 28 5 Updates, amendments and supplements 29 6 Language 30 7 Liability 31 V Approval of the prospectus 31 1 Competency 31 2 Application 32 3 Examination 33 4 Refusal 33 5 Validity 34 6 Offer or admission to trading in more Member States VI Publication 35 VII Powers of the Commission 37 VIII Disclosure of information 38 1 General 38 2 Language 42 3 Supervision requirements 42 IX Competence of the Commission 43 X Judicial control 44
I II III
34
I
2.1
Introduction
With Bulgarias aim of becoming a Member State of the European Union (EU), the acceptance of the acquis communautaire started. Thus, most of the national legislation effective nowadays corresponds to the regulations and 19
2.1
directives in force within the EU. Bulgarias accession to the EU on 1 January 2007 was just the step needed to ensure Bulgarian legislation conformed with EU legislation. The Prospectus Directive, as well as other pieces of legislation of the acquis communautaire, which are related to issues such as public companies, trading of securities and prospectuses, have been transposed into national law by either the enforcement of wholly new pieces of legislation or by amending and supplementing existing laws. 2.2 In compliance with the Prospectus Directive, Bulgarian legislation has fully accepted and implemented the substance of all of the main terms and definitions used in the Prospectus Directive, i.e., securities, equity securities, nonequity securities, offer of securities to the public, qualified investors, home and host Member State, and small- and medium-sized enterprises. The Bulgarian legislature has recently adopted special laws for the implementation of the Prospectus Directive and the other applicable acquis communautaire, and other existing pieces of legislation have been amended and supplemented, respectively. In Bulgaria, issues regarding publicly offered and traded securities, offerors, regulated markets, prospectuses, and authorities having supervisory functions over the process of trading with securities are regulated mainly by the following laws: (i) The Public Offering of Securities Act of 1999, as amended (POSA) it regulates the legal status and special requirements applicable to publicly traded joint stock companies, publicly traded securities, the public offers of securities and the admission of securities to trading on regulated markets, etc. (ii) The Measures Against Market Abuse with Financial Instruments Act of 2006, as amended (MAMAFI) it regulates issues relating, among other matters, to market abuse prevention and detection, heightening of public confidence in the financial instruments market, provision of prompt and complete disclosure of information to investors, creation of conditions for the development of a fair, transparent and effective financial instruments market. (iii) Markets in Financial Instruments Act of 2007 (MFIA) it regulates the activity of investment intermediaries and regulated markets in financial instruments, the requirements applicable to persons managing and controlling such entities, as well as the requirements applicable to persons with a qualified stake in the capital of such entities, and the state supervision over the said entities and persons. (iv) Ordinance No. 2 of 17 September 2003 of the Financial Supervision Commission on the Prospectuses in Case of Public Offering and Admission for Trade on a Regulated Market of Securities and on the 20
2.3
Bulgaria
2.6
Disclosure of Information by the Public Companies and the Other Issuers of Securities, as amended (the Ordinance) it regulates the requirements applicable to the initial disclosure of information in case of public offering of securities, the subsequent disclosure of information by the public companies and the other issuers of securities, as well as the other requirements to the contents of a prospectus.
II
2.4
The Commission
For the purpose of exercising control and supervision in the financial sector,1 a special governmental body has been established by virtue of the Financial Supervision Commission Act named the Financial Supervision Commission (the Commission). The Commission is independent from the Bulgarian Government and reports its activities to the National Assembly (the Parliament) of Bulgaria only. The Commission exercises control through: (i) issuance of authorisations (licences) and confirmations, as well as refusals to issue such authorisations and confirmations; (ii) conduct of off-site and on-site inspections on the operations of the persons supervised; (iii) implementation of administrative measures and imposition of administrative sanctions.
2.5
Three directorates have been established within the Commission: Supervision of Investment Activities; Insurance Supervision; and Social Insurance Supervision. Each of the said divisions is managed by a Deputy Chairman of the Commission. Among the powers of the Commission, the following shall be taken into consideration: (i) adoption and enforcement of ordinances when so provided by the legislation; (ii) issuance of instructions in writing for the execution and interpretation of different pieces of legislation such as the POSA, MFIA, MAMAFI, etc.; (iii) issuance or refusals of the respective licences as provided by the POSA, the MFIA, etc.; (iv) adoption of resolutions for granting or refusal of confirmation to prospectuses.
2.6
Considering the rights and obligations of the Commission, it is the authority which has to monitor and supervise all the issues with respect to the offering and trade of securities under the meaning of acquis communautaire and the Prospectus Directive in particular. 21
2.6
With the purpose of monitoring, supervising and enforcing the legislation applicable in the financial sector, the Commission has the right to take different types of administrative measures (such as ban of trade and the appointment of administrators), to demand information and to impose sanctions in case of violations of the legislation.
III
2.7
General principles
Under the Bulgarian legislation, the public offering of securities as well as their trading on a regulated market is prohibited and illegal if the offeror of the said securities has not published a prospectus. The prospectus itself can be published only if the Commission has issued a confirmation of the prospectus in writing. In the case of subscription or sale of securities before publication of the prospectus (preceded by its approval) as well as in the case that information in the prospectus is untrue or material information has not been revealed within the prospectus, the investor who has subscribed/purchased securities shall have the right to claim the transaction effected as null and void, save as where the said investor has acted in bad faith. The term for exercising such right is three months as of ascertaining of the relevant circumstances but shall not exceed one year as of subscription/sale and purchase of the securities.
1
2.8
Exemptions
The provisions of the legislation on the procedures for offering of securities or admission of securities to trading on regulated market shall not apply to: (i) units issued by collective investment undertakings other than the closedend type; (ii) non-equity securities issued by the Republic of Bulgaria or by another Member State, by the regional or local authorities thereof, by international organisations whereof the Republic of Bulgaria or another Member State is a member, by the European Central Bank, by the Bulgarian National Bank or by the central banks of the other Member States; (iii) shares in the capital of the central banks of the Member States; (iv) securities unconditionally and irrevocably guaranteed by the Republic of Bulgaria or by another Member State or by their regional or local authorities; (v) securities issued by non-profit organisations, recognised in a Member State, with a view to their obtaining the means necessary to achieve their objectives; (vi) non-equity securities issued in a continuous or repeated manner by banks, provided that the said securities: (a) are not subordinated, convertible or exchangeable; (b) do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative financial instrument;
22
Bulgaria
2.10
(c) represent reception of repayable deposits; (d) are covered by the Bank Deposit Insurance Fund-Bulgaria or by a similar deposit guarantee scheme in another State; (vii) non-fungible shares of capital whose main purpose is to provide the holder thereof with a right to occupy an apartment, or other form of immovable property or a part thereof, and where the shares cannot be sold on without this right being given up; (viii) non-equity securities issued in a continuous or repeated manner by banks, where the total consideration of the offer is less than the BGN2 equivalent of 50,000,000, which limit shall be calculated over a period of one year, provided that the said securities: a. are not subordinated, convertible or exchangeable; b. do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative financial instrument. In the cases referred to in items (ii), (iv) and (viii), the issuer, the offeror or the person asking for admission to trading on a regulated market may draw up a prospectus in accordance with the requirements of the legislation and the instruments for the application thereof, when the securities are offered to the public or admitted to trading. 2.9 In compliance with POSA, the obligation to publish a prospectus shall not apply to the following types of offers: (i) an offer of securities addressed solely to qualified investors; (ii) an offer of securities addressed to fewer than 100 natural or legal persons in the Republic of Bulgaria or to fewer than 100 natural or legal persons in each other Member State; (iii) an offer of securities addressed to investors who acquire securities for a total consideration of the BGN equivalent of at least 50,000 per investor for each separate offer; (iv) an offer of securities whose denomination per unit amounts to the BGN equivalent of at least 50,000; (v) an offer of securities with a total consideration of the BGN equivalent of less than 100,000, which limit shall be calculated over a period of one year. Any subsequent resale of securities, which were previously the subject of one or more of the types of offer covered under items (i) through (v) above, shall be regarded as a separate offer with respect to the assessment of an offer as a public offer under the meaning of the POSA.3 The placement of securities through investment intermediaries shall be admitted after publication of a prospectus if any of the conditions covered under items (i) to (v) above are not met. 2.10 The obligation to publish a prospectus shall not apply to offers of securities to the public of the following types of securities: 23
2.10
1. shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase of capital; 2. securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the persons containing information which is regarded by the Commission as being equivalent to the information contained in the prospectus; 3. securities offered, allotted or to be allotted in connection with a merger, provided that a document is made available to the persons containing information which is regarded by the Commission as being equivalent to the information contained in the prospectus; 4. shares offered, allotted or to be allotted free of charge to existing shareholders, as well as dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available to the persons containing information on the reasons for the offer of the shares, on the number and nature of the shares, on the rights conferred by the shares and the manner of exercise of the said rights, on the terms and procedure for acquisition of the shares, as well as other details of the offer; 5. securities offered, allotted or to be allotted to existing or former members of the management and supervisory bodies and/or factory and office workers by the employer thereof, which has securities already admitted to trading on a regulated market, or by a person related thereto, provided that a document is made available to the persons containing information on the reasons for the offer of the securities, on the number and nature of the securities, on the rights conferred by the securities and the manner of exercise of the said rights, on the terms and procedure for acquisition of the securities, as well as other details of the offer. 2.11 The obligation to publish a prospectus shall not apply to the admission to trading on a regulated market of the following types of securities: 1. shares representing, over a period of one year, less than ten per cent of the number of shares of the same class already admitted to trading on the same regulated market; 2. shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, if the issuing of such shares does not involve any increase of capital; 3. securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the persons containing information which is regarded by the Commission as being equivalent to the information contained in the prospectus; 4. securities offered, allotted or to be allotted in connection with a merger, provided that a document is made available to the persons containing 24
Bulgaria
2.11
5.
6.
7.
8.
information which is regarded by the Commission as being equivalent to the information contained in the prospectus; shares offered, allotted or to be allotted free of charge to existing shareholders, as well as dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available to the persons containing information on the reasons for the offer of the shares, on the number and nature of the shares, on the rights conferred by the shares and the manner of exercise of the said rights, on the terms and procedure for acquisition of the shares, as well as other details of the offer; securities offered, allotted or to be allotted to existing or former members of the management or supervisory bodies and/or factory and office workers by the employer thereof or a person related thereto, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available to the persons containing information on the reasons for the offer of the securities, on the number and nature of the securities, on the rights conferred by the securities and the manner of exercise of the said rights, on the terms and procedure for acquisition of the securities, as well as other details of the offer; shares resulting from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market; securities already admitted to trading on another regulated market, provided that: (a) these securities, or securities of the same class, have been admitted to trading on that other regulated market for more than eighteen months; (b) the admission to trading on that other regulated market was preceded by confirmation of a prospectus and the publication thereof for securities first admitted to trading on a regulated market after 31 December 2003; (c) except where (b) applies, for securities first admitted to listing after 30 June 1983, a prospectus for admission to trading was confirmed; (d) the ongoing obligations for trading on that other regulated market have been fulfilled; (e) the person asking for the admission of securities to trading on a regulated market in the Republic of Bulgaria, invoking this exemption, makes a summary document available to the public in a language accepted by the Commission, and the said summary document was published in the Republic of Bulgaria, and the contents of the said 25
2.11
summary document is responsive to the requirements of the legislation and the instruments for the application thereof and the said document states where the most recent prospectus can be obtained and where the financial information published by the issuer according to his ongoing disclosure obligations is available. 2.12 In the cases where no prospectus has been published, the investors shall have the right to claim the transaction affected as null and void if the other information regarding the offer to the public or the admission of securities to trading on a regulated market, as circulated by the issuer or the offeror or the person asking for admission of securities to trading on a regulated market, is untrue or if material information has been withheld, save as where the said investor has acted in bad faith. The term for exercising such right is three months as of ascertaining the relevant circumstances but shall not exceed one year as of subscription/sale and purchase of the securities. Should more than one issue of securities of the same class be issued within the relevant calendar year and each of the said issue be offered to fewer than 100 persons but the total number of offerees of the said issues exceeds 100 persons, to the issue exceeding this limit the general rules for publishing of prospectus and its confirmation shall apply.
IV
2. 13
The prospectus
The Ordinance implementing the POSA explicity provides that the Prospectus Regulation applies to the requirements of the prospectus and its format, its publication and its contents. Furthermore, the Ordinance contains Annexes exactly specifying the information which shall be provided with a prospectus. These Annexes, as well as the provisions of the Ordinance itself, have identical contents as the Annexes to the Prospectus Directive.
1
2. 14
Contents of the prospectus

The prospectus shall contain all information which, according to the particular nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, is necessary to enable investors to make an accurate assessment of the economic situation and financial position, assets and liabilities, profits and losses, and prospects of development of the issuer and of the guarantors of the securities, as well as of the rights attached to such securities. A prospectus may not contain untrue, misleading or deficient particulars. The prospectus shall contain information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market, and shall also include a summary. There is no requirement for a summary note to be provided where the prospectus relates to the admission to trading on a regulated market of non-equity securities having a denomination per
26
Bulgaria
2.17
unit of at least the BGN equivalent of 50,000, except when the Commission or the competent authority of a relevant Member State requests the provision of such summary note. 2.15 The issuer, the offeror or the person asking for the admission of the securities to trading on a regulated market may draw up the prospectus as a single document or separate documents. A prospectus composed of separate documents shall contain all the information required under the legislation and the instruments for the application thereof, divided into three documents: (i) a registration document, containing information relating to the issuer; (ii) a securities note, containing information concerning the securities offered to the public or to be admitted to trading on a regulated market; (iii) a summary note. 2. 16 The prospectus shall be considered to contain the relevant information even when the said information is incorporated in the prospectus by reference to one or more documents which have been confirmed by or submitted to the Commission, provided that the information contained in the said documents is the latest available and a detailed cross-reference list is drawn up in order to enable investors to identify easily specific items of information referred to. Should any particulars of the required contents of a prospectus prove inapplicable to any specific issuer by reason of the corporate objects or legal form of business organisation thereof or the securities to which the prospectus relates, the said particulars shall be replaced by equivalent information. The information contained in a prospectus must be provided in an easily analysable and comprehensible form for the investors.
2
2.17
Base prospectus
In compliance with the Prospectus Directive under the POSA, the issuer, offeror or person asking for admission of the securities to trading on a regulated market may draw up the prospectus as a base prospectus where the following types of securities are offered to the public or are to be admitted to trading on a regulated market: (i) non-equity securities, including warrants in any form, issued under an offering programme; (ii) non-equity securities issued in a continuous or repeated manner by banks4 where: (a) the sums deriving from the issue of the said securities are placed in assets which provide sufficient coverage for the liability deriving from securities until the maturity date thereof; (b) in the event of bankruptcy of the issuer bank, the sums referred to in (ii)(a) above are intended, as a priority, to repay the principal and interest falling due. 27
2.18
3
2.18
Prospectuses consisting of separate documents

Where an issuer already has a registration document confirmed by the Commission, when securities are offered to the public or admitted to trading on a regulated market, only a securities note and a summary note may be drawn up. In such cases the securities note shall furthermore provide the latest available information that would normally be provided in the registration document if, since the registration document was last updated or supplemented, there has been a material change in the particulars contained or new circumstances have occurred, which could affect investors assessments. The Commission shall pronounce on the securities note and the summary note according to the procedures established for confirmation of a prospectus. Where the issuer has a registration document, which has been submitted to the Commission without being confirmed, the Commission shall decide on the entire prospectus, including any updated information.
4
2.19
Omission of information
In compliance with the possibility under Article 8(2) of the Prospectus Directive, the Commission may authorise the omission from the prospectus of certain information if the Commission considers that: (i) disclosure of such information would be contrary to the public interest; (ii) disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead investors with regard to facts and circumstances essential for the latter; (iii) such information is of minor importance only for a specific offer or admission to trading on a regulated market and is not such as will influence the assessment of the financial position and prospects of the issuer, offeror or guarantor of the securities. Where information on the final offer price and on the final amount of securities that will be offered cannot be included in the prospectus, the maximum price or the criteria and/or the conditions in accordance with which the final price and the final amount of securities will be determined shall be disclosed therein. If such information is not disclosed in the prospectus, the persons who have subscribed for or purchased securities, as the case may be, may withdraw the acceptances of the subscription or purchase within two working days or within another longer time limit as provided for in the prospectus after submission to the Commission of the information on the final price and the final amount of the securities which will be offered by means of a written declaration at the places where the securities were subscribed for or purchased, as the case may be. The person shall not be liable for the withdrawal of the acceptance thereof, save as where the said person has acted in bad faith.
28
Bulgaria
2.21
The issuer, offeror or person asking for admission of the securities to trading on a regulated market is obliged to inform the Commission of the final price and the final amount of securities which will be offered and to publish this information through its publication in the press, in the form of a leaflet or in another appropriate manner not later than the initial date of the public offering or the admission of the securities to trading on a regulated market.
5
2.20
Updates, amendments and supplements

Issuers5 whose securities are admitted to trading on a regulated market in Bulgaria shall be obliged, at least annually, to provide a document that contains or refers to all information that they have published or otherwise made available to the public over the preceding twelve months. Where such a document refers to a particular item of information, the said document shall state where the said information can be obtained. The document shall be submitted to the Commission not later than within one month after publication of the annual financial statement of the issuer. During the period commencing with the submission of an application for confirmation of a prospectus and ending with the making of decision by the Commission, the issuer, offeror or person asking for admission of the securities to trading on a regulated market must notify the Commission of any intervening changes as may necessitate amendments to the prospectus within three working days after occurrence or learning of the said changes, as the case may be, and must amend the prospectus accordingly. During the period between the time when confirmation of the prospectus is granted and the final closing of the offer to the public or the time when trading on a regulated market begins, the issuer, offeror or the person asking for admission of the securities to trading on a regulated market must draw up a supplement to the prospectus and submit the said supplement to the Commission before the lapse of the next succeeding working day after the occurrence or the learning, as the case may be, of every significant new factor, material mistake or inaccuracy relating to the information contained in the prospectus, which is capable of affecting the assessment of the securities offered. The summary, as well as any translations thereof, shall also be supplemented, if necessary, to take into account the new information included in the supplement to the prospectus. In such cases the person who has already subscribed for or, respectively, purchased securities before the supplement to the prospectus is published, shall have the right to withdraw the acceptance thereof of the said securities within two working days or within another longer time limit as provided for in the prospectus after publication of the notice of the supplement, without being liable, save where the said person has acted in bad faith. The withdrawal of acceptance shall be effected via a written declaration at the place where the securities were subscribed for or purchased, as the case may be. 29
2.21
2.21
The Commission shall pronounce on the supplement to the prospectus within seven working days after receipt of the said prospectus, or, where additional particulars and documents have been requested, within seven working days after receipt of the said particulars and documents. The Commission shall refuse to approve the supplement to the prospectus if the requirements under the legislation and the instruments for the application thereof are not complied with. In such a case, the Commission may discontinue the public offering or the trading in the securities. 2.22 The issuer, offeror or person asking for admission of the securities to trading on a regulated market must give public notice of any such supplement and shall make the supplement available to the public within seven days after the decision of the Commission to confirm the supplement to the prospectus.
6
2.23
Language
If an offer to the public is made or admission to trading on a regulated market is demanded only in Bulgaria and the home Member State is Bulgaria, the prospectus shall be drawn up in the Bulgarian language. In the event that an offer to the public is made or admission to trading on a regulated market is demanded in one or more Member States excluding Bulgaria and the home Member State is Bulgaria, the prospectus shall be drawn up either in a language accepted by the competent authorities of those Member States or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission of the securities to trading on a regulated market. For the purposes of confirmation of the prospectus by the Commission, the prospectus shall be drawn up in the Bulgarian or the English language, at the choice of the issuer, offeror or person asking for admission of the securities to trading on a regulated market. If an offer to the public is made or admission to trading on a regulated market is requested in more than one Member State including Bulgaria and the home Member State is Bulgaria, the prospectus shall be drawn up in the Bulgarian language. In such cases, the prospectus shall also be made available to the public either in a language accepted by the competent authorities of each host Member State or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission of the securities to trading on a regulated market. Where admission to trading on a regulated market of non-equity securities whose denomination per unit amounts to at least BGN equivalent of 50,000 is requested in one or more Member States, the prospectus shall be drawn up either in a language accepted by the competent authorities of the home and host Member States or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission of the securities to trading on a regulated market.
30
Bulgaria
2.27
7
2.24
Liability
The prospectus shall be signed by the issuer and the offeror or by the person asking for admission of the securities to trading on a regulated market, as well as by the guarantor of the securities, who shall declare that the prospectus conforms to the statutory requirements. The members of the management body of the issuer and the procurator (if any), as well as the offeror, the person asking for admission of the securities to trading on a regulated market and the guarantor of the securities shall be jointly liable for any detriment as may be inflicted by reason of any untrue, misleading or deficient particulars in the prospectus. The drawers of the financial statements shall be jointly liable with the persons mentioned above for any detriment as may be inflicted by any untrue, misleading or deficient particulars in the financial statements of the issuer, and the registered auditors shall be jointly liable with the said persons for any detriment as may be inflicted by the financial statements thereby audited. Such liability may not arise solely on the basis of the summary note, including any translation thereof, unless the information contained therein is misleading, untrue or inconsistent when read together with the other parts of the prospectus. The prospectus shall clearly identify the persons who shall be liable by name and position or, respectively, by business name, registered office and address of the place of management, who shall declare that, to the best of their knowledge, the information contained in the prospectus is true and full. In the cases where no prospectus has been published, liability shall be carried with respect to the other information circulated by the issuer, the offeror or the person asking for admission of the securities to trading on a regulated market in connection with the public offering or the admission to trading on a regulated market.
2.25
2.26
V 1
2.27
Approval of the prospectus Competency

The Commission is competent to decide on applications for approval of prospectuses in the following cases: (i) the home Member State of the issuer is Bulgaria; or (ii) the Commission is called to approve the prospectus further to a request by a competent authority of a Member State. Where the Republic of Bulgaria is a home Member State, the Commission may, because of the type of the issuer and the securities offered or the peculiarities of the public offer, subject to the agreement of the relevant competent authority 31
2.27
of another Member State, transfer the approval of a specific prospectus to the said competent authority. In such case, the Commission shall notify the issuer, the offeror or the person asking for admission of the securities to trading on a regulated market within three working days from the date of the decision taken by the Commission to assign the approval. The time limit for pronouncement by the relevant competent authority, as the case may be, shall apply as from the date of the decision for the said assignment. Where the Republic of Bulgaria is not a home Member State, the Commission may assume the approval of a prospectus from the competent authority of another Member State.
2
2.28
Application
A person who requests approval of a prospectus shall file with the Commission a hard copy application in writing as well as a registration form in the form of a soft file (both forms approved by the Deputy Chairman of the Commission responsible for the directorate of Supervision of Investment Activity). The applicant can be: (a) in the case of a public offering of securities: the issuer, the offeror and the investment intermediary; (b) in the case of admission of securities to trading on a regulated market: the issuer and the person who requests admission of the securities but is not the issuer.
2.29
In case an applicant or an issuer is a foreign entity, all the requirements with respect to the documents needed to be presented with the request shall be applied mutatis mutandis. Both the application and the registration form shall be in the Bulgarian language. In case the documents that have to be provided are in a language different from Bulgarian, these shall be translated into the Bulgarian language and legalised in conformity with the Bulgarian legislation in force. In the case of discrepancies between the Bulgarian and non-Bulgarian language, the Bulgarian translation shall prevail. With the application for approval of a prospectus the following documents shall be submitted: 1. the prospectus; 2. documents with respect to the applicant, which include: (i) a certified copy of the certificate for entering into the Commercial Register, certificate of current legal status; (ii) a certified copy of the deed of incorporation/the statutes of the company; and (iii) the resolution for public offering of securities or the admission of securities to trade on a regulated market and for the adoption of a prospectus by the competent body of the company;
2.30
2.31
32
Bulgaria
2.33
3. documents under 2(i) and (ii) above with respect to the issuer of the securities offered in case it is different from the applicant; 4. the issuers last annual financial statement, as audited by a registered auditor; 5. documents certifying guarantees granted by third parties for securing of obligations of the issuer as well as any other documents necessary for confirmation of the information provided with the prospectus; 6. a receipt proving the payment of the tax due.
3
2.32
Examination
The Commission shall establish whether the requirements for issuance of the requested confirmation are met. If the particulars and documents provided are incomplete or inconsistent or additional information or evidence of the veracity of data is necessary, the Commission shall send a notification of the established incompleteness and inconsistencies and/or of the requested information and documents within ten working days of receipt of the application. The Commission shall pronounce on the application within ten working days of receipt thereof or, where additional particulars and documents have been requested, within ten days of receipt of the said particulars and documents. In the cases where the public offer involves securities issued by an issuer which does not have any securities admitted to trading on a regulated market and which has not previously offered securities to the public, the time limit shall be twenty working days instead of ten working days.
4
2.33
Refusal
The Commission shall refuse to grant confirmation of the prospectus by a decision in writing on any of the following grounds: 1. where the prospectus does not satisfy the statutory requirements; 2. where the issue price of the shares is lower than the balance sheet value per share before the increase of capital, calculated at the time of passage of a resolution on an increase of capital, and the interests of shareholders are thus impaired; 3. on account of the special rights attached to the shares, or for any other reason the interests of investors are not safeguarded. The Commission may only refuse to grant confirmation if the applicant has failed to rectify non-conformities or failed to submit the documents as required within the time limit set by the Commission, which may not be shorter than one month. 33
2.34
5
2.34
Validity
A prospectus shall be valid for a period of twelve months after its publication. A registration document shall be valid for a period of twelve months. In such cases, the registration document, accompanied by the securities note, updated if applicable, and the summary note shall be considered to constitute a valid prospectus. In the cases of an offering programme, the base prospectus shall be valid for a period of twelve months.
6
2.35
Offer or admission to trading in more Member States

If an offer to the public is made or admission to trading on a regulated market is demanded within the territory of one or more host Member States, the issuer or the person responsible for drawing up the prospectus must notify the Commission of this in advance. The notification shall indicate the host Member State or States. The prospectus shall be attached to any such notification unless confirmed by the Commission. Where Bulgaria is a home Member State, securities may be offered to the public or admission of securities to trading on a regulated market may be demanded within the territory of one or more host Member States on the basis of a prospectus confirmed by the Commission, after the competent authorities of the host Member States are notified with a notification in advance. Within three working days after the receipt of the notification or, respectively, within one working day after the confirmation of the prospectus, if the prospectus has been submitted for confirmation together with the notification, the Commission shall dispatch to the competent authority of the host Member State a certificate attesting that the prospectus has been drawn up in accordance with the requirements of the Prospectus Directive, as well as a copy of the prospectus. The Commission shall notify forthwith the issuer or, respectively, the person responsible for drawing up the prospectus, of the dispatch of the documents. If the Commission has authorised the omission of certain information from the prospectus, this shall be stated in the certificate. If the Commission is informed by the competent authority of the host Member State of any violations of the effective legislation of that Member State committed by the issuer or by the persons commissioned to carry out the offer to the public, or of any breaches of the obligations attaching to the issuer by reason of the fact that the securities are admitted to trading on a regulated market, the Commission shall apply all relevant measures and shall notify the host Member State of the measures taken. In case the Republic of Bulgaria is a host Member State, securities may be offered to the public or may be admitted to trading on a regulated market within the territory thereof after the Commission receives from the relevant competent authority of the home Member State:
2.36
2.37
34
Bulgaria
2.41
1. a certificate attesting that a confirmed prospectus exists for the securities, which has been drawn up in accordance with the requirements of the Prospectus Directive, as well as information whether any particulars have been omitted from or substituted in the prospectus, the particulars which have been omitted or substituted, as well as justification of the omission or substitution of the said particulars; 2. a copy of the approved prospectus. 2.38 The issuer, the offeror or the person asking for admission of the securities to trading on a regulated market shall be obliged to make the prospectus available to the public. Where the prospectus has not been drawn up in the Bulgarian language, the issuer, the offeror or the person asking for admission of the securities to trading on a regulated market shall be obliged to make a translation of the summary into the Bulgarian language available to the public together with the prospectus. In case the Commission finds out any significant new information, material mistake or inaccuracy in the prospectus, the Commission shall draw the attention of the competent authority of the host Member State to the need of a supplement to the prospectus. Such notification shall also be made in case the Commission finds that the issuer or the persons commissioned to carry out the offer to the public in Bulgaria violates the applicable legislation and/or its obligations. If, despite the measures taken by the competent authority of the home Member State, or because such measures have proved inadequate, the issuer or the person commissioned to carry out the offer to the public in Bulgaria persists in committing violations, the Commission may, after informing the competent authority of the home Member State, take the appropriate measures in order to protect investors. The Commission shall inform the European Commission of the measures taken within seven days after the application of the said measures. Where Bulgaria is the home Member State of an issuer having its registered office in a third country, the Commission may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up in accordance with the legislation of a third country, provided that: 1. the prospectus has been drawn up in accordance with international standards set by international securities commission organisations; 2. the information requirements, including information of a financial nature, are equivalent to the requirements under the POSA and its secondary legislation.
2.39
2.40
VI
2.41
Publication
The issuer or offeror shall give public notice of the public offering, the earliest and latest date for the subscription or the earliest and latest date for the sale, 35
2.41
as the case may be, the registered number of the confirmation as granted by the Commission, and the place, time and manner of inspection of the prospectus, as well as other particulars and information as may be prescribed by the Ordinance. Any notice for the information above shall be promulgated in the State Gazette and shall be published in one national daily newspaper not less than seven days prior to the earliest date for the subscription or the commencement of the sale. Furthermore, the Ordinance explicitly states that the prospectus shall be deemed as made public if it is: 1. published in one or more central newspapers; or 2. printed in sufficient number of copies, which are freely distributed in the places where the securities are offered for subscription or trade, the office premises of the issuer, the offeror, the investment intermediaries and banks included; or 3. published via the internet on the website of the issuer and, if possible, on the websites of the investment intermediaries and banks; 4. published via the internet on the website of the regulated market on which the securities are to be offered/traded. In addition, in the register of public companies and other issuers of securities to the Commission, all confirmed prospectuses shall be published for a term of at least twelve months. 2.42 According to the Ordinance, all the requirements of acquis communautaire with respect to the publishing of a prospectus, on the internet included, shall be directly applicable. The earliest date as stated in the notice, whereon the issuers securities can be subscribed for or purchased, as the case may be, shall be deemed as commencement of the subscription or sale, as the case may be. The issuer, the offeror or the person asking for admission of the securities to trading on a regulated market shall be obliged to make the prospectus available to the public via its publication in the press, in the form of a leaflet or in another appropriate manner not later than the initial date of the public offering or the admission of the securities to trading on a regulated market. In the case of an initial public offer of a class of shares not already admitted to trading on a regulated market and whose admission to trading is to be demanded for the first time, the prospectus shall be made available to the public at least six working days before the end of the offer. Any advertisement and publication in connection with a public offer of securities or admission of securities to trading on a regulated market shall state that the prospectus is or will be made available to the public, as well as the manner in which investors can inspect the said prospectus. Such an advertisement
2.43
2.44
36
Bulgaria
2.46
and publication may not contain any untrue or misleading information, or any information inconsistent with the information contained in the prospectus as submitted to the Commission. The Commission shall exercise supervision as to the conformity of the advertisements and publications with the requirements of the legislation and the instruments on the application thereof. 2.45 The issuer, the offeror and the person asking for admission of the securities to trading on a regulated market are not allowed to make any statements which are inconsistent with the information contained in the prospectus as submitted to the Commission or which contain any material information which is not available in the prospectus.
VII
2.46
Powers of the Commission

In order to ensure compliance with the provisions of the legislation regarding the confirmation/refusal of a prospectus, the Commission shall be empowered to: 1. require from the issuers, offerors or persons asking for admission to trading on a regulated market to include in the prospectus specific information, if necessary for investor protection; 2. require from the issuers, offerors or persons asking for admission to trading on a regulated market, and the persons that control them or are controlled by them, to provide specific information and documents; 3. require the auditors, the members of the management and supervisory bodies and the managers of the issuers, offerors or persons asking for admission to trading on a regulated market, as well as the persons commissioned to carry out the offer to the public or to ask for admission to trading, to provide specific information; 4. suspend a public offer or admission to trading for a maximum of ten consecutive working days on any single occasion if there are reasonable grounds for suspecting that the provisions of the applicable legislation have been infringed; 5. prohibit or suspend a specific advertisement for a maximum of ten consecutive working days on any single occasion if there are reasonable grounds for suspecting that the provisions of the applicable legislation have been infringed; 6. prohibit the carrying out of a public offer if there are reasonable grounds for suspecting that the provisions of the applicable legislation have been or would be infringed; 7. make public the fact that a specific issuer is failing to comply with its obligations under the applicable legislation. The Commission may disclose to the public each measure applied and sanction imposed for infringement of the provisions of the applicable legislation, unless such disclosure would seriously jeopardise the stability of the financial markets or cause disproportionate damage to the parties involved. 37
2.47
VIII 1
2.47
Disclosure of information General

The POSA establishes requirements for disclosure of information by issuers for which Bulgaria is a home country and whose securities are admitted to trading on a regulated market as well as by issuers who have conducted public offering of securities in the Republic of Bulgaria. For the purposes of the Regulations of the disclosure of information 1. home country shall be: a) for an issuer of shares or debt securities with single nominal value of less than the BGN equivalent of 1,000 or equivalent amount in another currency in which the securities are denominated at the date of issue thereof: aa) for an issuer from a Member State the Member State where its registered office is located; bb) for an issuer from a third country the Member State in which the issuer is obliged to provide to the relevant competent authority a document which contains or makes reference to all the information it has published or has made public otherwise over the last twelve months in accordance with the requirements of Article 10 of the Prospectus Directive; b) apart from the cases under a, the Member State where the registered office of the issuer is located or in which its securities are admitted to trading on a regulated market, at the option of the issuer; the issuer may specify only one home country and its choice shall be valid for a period of no less than three years, unless the securities are already traded on a regulated market in Bulgaria or in another Member State; 2. host country shall be the Member State in which the securities are admitted to trading on a regulated market where this country is different from the home country; The provisions for disclosure of information shall not apply to: 1. units of collective investment undertakings other than the closed end type, or for units acquired or transferred within such collective investment undertakings; 2. money market instruments with a maturity of less than twelve months.
2.48
All the reports, notifications and the other information that shall be made public according to the disclosure of information rules, shall contain information as investors may need to make a reasonable investment decision. Any such reports, notifications and information may not contain untrue, misleading or deficient particulars.
38
Bulgaria
2.50
The management body of the issuer shall be responsible for the preparation and public disclosure of the financial statements. The members of the management body of the issuer as well as its procurator (if any) shall be jointly liable for any detriment as may be inflicted by reason of any untrue, misleading or deficient particulars in the reports, notifications and any other information disclosed. The drawers of financial statements shall be jointly liable with the persons referred above for any detriment as may be inflicted by any untrue, misleading or deficient particulars in the financial statements of the issuer, and the registered auditors shall be jointly liable with the said persons for any detriment as may be inflicted by the financial statements thereby audited. 2.49 Any issuer shall disclose publicly its annual financial report within ninety days after the end of each financial year. Any issuer who is obligated to prepare consolidated financial statements shall disclose publicly its annual consolidated financial statements on its activity within 120 days after the end of each financial year. The issuer shall be obligated to ensure that the annual financial statements and the consolidated financial statements remain publicly available for a period of at least five years. The annual financial report shall contain: 1. annual financial statements under the Accountancy Act of 2001 as amended, audited by a registered auditor as well as an audit report; 2. an annual report; 3. a programme for application of the internationally recognised standards of good corporate governance, as prescribed by the Deputy Chairman of the Commission; 4. declarations by the responsible persons within the issuer, specifying their names and functions, certifying that to the best of their knowledge: a) the financial statements, prepared in accordance with the applicable accounting standards, present correctly and fairly the information about the issuers assets and liabilities, financial standing and profit or loss and of the companies included in the consolidation; b) the activity report shall contain a truthful review of the development and results from the activity of the issuer, as well as the condition of the issuer and the companies included in the consolidation, together with a description of major risks and uncertainties faced thereby; 5. any other information as explicitly specified by the Ordinance. 2.50 Where the issuer is obligated to prepare consolidated financial statements, the financial statements shall be prepared in accordance with the International Accounting Standards and shall be presented together with the annual audited financial statements of the parent company, prepared in accordance with the national legislation of the Member State at the registered office of the 39
2.50
parent company. In case the issuer is not obligated to prepare consolidated financial statements the audited financial statements shall be prepared in accordance with the national legislation of the Member State at its registered office. 2.51 The annual activity report shall include in addition to the information under the Accountancy Act information about: 1. implementation of the programme for application of internationally recognised standards of good corporate governance, as well as information about the compliance of management and supervisory bodies of the issuer with these standards during the year; 2. the reasons for non-compliance of management and supervisory bodies of the issuer with the programme or the standards under item 1, as the case may be, if such non-compliance exists; 3. the measures taken for eliminating the reasons under item 2 and for implementation of the programme for good corporate management; 4. revision of the programme and proposal for changes thereof to ensure better application of the standards of good corporate governance in the company; 5. any other information, as explicitly specified by the Ordinance. 2.52 Any issuer shall make public a three-month report on its activity within thirty days after the end of each quarter. Any issuer who is obligated to prepare annual consolidated financial statements shall make public its consolidated financial statements within 60 days after the end of each quarter. The issuer shall be obligated to ensure that the quarterly financial report and the quarterly consolidated financial statements remain publicly available for a period of at least five years. Exclusions exist with respect to some of the provisions regarding the disclosure of information when an issuer is from a third country and if the Commission deems that the law of such third country stipulates requirements equivalent to the requirements of the legislation and the statutory instruments for application thereto. The Commission publishes on its website a list of the countries in respect of which it considers that their laws set out requirements equivalent to the requirements of the Bulgarian legislation. Other group of entities to which the rules for disclosure of information (with respect to provision of accounting balances and reports on the activity) shall not fully apply are as follows: 1. Bulgaria, district or local authorities in Bulgaria, public international organisations in which at least one Member State is a member, the European Central Bank, the Bulgarian National Bank and the central banks of the other Member States regardless of whether they are issuers of shares or other securities; 40
2.53
Bulgaria
2.57
2. issuers of shares who only issue debt securities admitted to trading on the regulated market with a nominal value of no less than the BGN equivalent of 50,000 or in the cases of debt securities denominated in currency other than euro, with a nominal value at the date of their issue of no less than the BGN equivalent of 50,000. The provisions of the legislation with respect to the reports on the activities shall not apply to banks whose shares are not admitted to trading on a regulated market and which have issued only debt securities issued by them on a continuous basis or periodically, provided that: 1. the total nominal value of the debt securities is lower than the BGN equivalent of 100,000,000; 2. they have not published a prospectus. 2.54 The issuer of securities other than shares shall disclose publicly without delay: (i) any changes in the rights of the holders of securities other than shares, including changes in the time limits and conditions of such securities, which could affect indirectly such rights, resulting from a change in the conditions of the loan or the interest rate; (ii) information about issuance of a new issue of debt securities and any related guarantees and collateral. This requirement shall not apply to international institutions or other similar organisations in which at least one Member State is a member thereof. The issuer or the person who has requested, without the consent of the issuer, admission of the securities to trading on a regulated market shall disclose the regulated information to the Commission and to the public at the same time. The issuer who has conducted only a public offering of securities shall disclose this information first on the territory of Bulgaria. This requirement shall also apply to issuers whose securities are admitted to trading on a regulated market in Bulgaria but are not admitted to trading on a regulated market in the home country. In this case the regulated information shall meet the minimum conditions of EC Directive 2004/109/EC. The regulated information shall be disclosed to the public in such a manner so as to cover simultaneously as wide a circle of people as possible and in a nondiscriminating manner. The issuer shall use a news agency or another media to ensure the efficient dissemination of the regulated information to the public in all Member States. The issuer or the person who has requested admission of the securities to trading on a regulated market may not collect charges from investors for access to the regulated information. The Commission has created and keeps a centralised storage database of the regulated information received from issuers whose securities are admitted to trading on a regulated market and whose home country is the 41
2.55
2.56
2.57
2.57
Republic of Bulgaria. The information is made public and access is free of charge.
2
2.58
Language
In case the securities are admitted to trading only on a regulated market in Bulgaria and Bulgaria is the home country, the information shall be disclosed in Bulgarian. The same rule applies if the securities are publicly offered on the territory of Bulgaria. Where the securities are admitted to trading on a regulated market in one or more Member States simultaneously, including Bulgaria, and Bulgaria is the home country, the regulated information shall be disclosed in Bulgarian and in a language adopted by the competent authority of such Member States, or in the customary language in the sphere of international finance, at the option of the issuer. In case the securities are admitted to trading on a regulated market in one or more Member States simultaneously, Bulgaria excluded, and Bulgaria is the home country, the regulated information shall be disclosed in a language adopted by the competent authority of such Member States, or in the customary language in the sphere of international finance, at the option of the issuer. For the purposes of the Commissions supervisory functions the information shall also be disclosed either in Bulgarian or in English, at the option of the issuer. In case the securities with a single nominal value of at least the BGN equivalent of 50,000 or debt securities with a nominal value in a currency other than euro of at least the BGN equivalent of 50,000 at the date of their issue are admitted to trading on a regulated market in one or more Member States, the regulated information shall be disclosed in a language adopted by the home and the host Member States or in a customary language in the sphere of international finance, at the option of the issuer or of the person who has requested the securities to be admitted to trading on a regulated market.
3
2.59
Supervision requirements
The issuer shall notify the Commission of: (i) any changes in its articles of association (statutes) (ii) any changes in its management and supervisory bodies; (iii) the decision on transformation of the company; and (iv) other significant circumstances. The obligation shall be performed by the issuer by close of the working day following the day of taking the decision or having knowledge of the specific circumstance, and where it is subject to entry in the commercial register, by the close of the working day following the day of having knowledge of the entry but no later than seven days after the entry.
42
Bulgaria
2.60
IX
2.60
Competence of the Commission

With the purpose of ensuring compliance with POSA provisions regarding the disclosure of information, the Deputy Chairman of the Commission may: 1. require from auditors, the issuer and the persons controlling or which are controlled to provide specific information and documents; the auditor shall be exempt from the limitations on disclosure of information set out in law, by-law or a contract thus not liable for disclosure of information to the Commission and the Deputy Chairman; 2. require from the issuer to disclose publicly the information under item 1 in a manner and within a time limit as set out by the Deputy Chairman; 3. publish, after presentation of an explanation by the issuer, the information under item 1 at his own initiative in the cases where the issuer or the persons that control it or are controlled by it have not fulfilled their obligation under item 2; 4. require from the members of the management and supervisory bodies and the procurators of the issuer (if any) to provide information and where necessary, additional information and documents; 5. ban trading in specific securities on a regulated market for a period not exceeding ten days if he has reasonable grounds to assume that the provisions regarding the disclosure of information are violated; 6. ban trading on a regulated market if the provisions regarding the disclosure of information are violated or there are reasonable grounds for him to assume that they are violated; 7. oblige the issuer to take specific measures for timely disclosure of information to ensure public access to it simultaneously in all Member States in which the issuers securities are admitted to trading; 8. inform the public that a particular issuer does not meet its obligations; 9. oblige the issuer within a reasonable time limit set by it to remove any deficiencies or non-conformities with the applicable legislation, including the International Accounting Standards, established in the financial statements, records and other accounting documents. The Commission may disclose any measure taken or penalty imposed, save where such disclosure would seriously jeopardise the stability of financial markets or cause disproportionate damage to the parties involved. In case Bulgaria is a host country and the Commission establishes that an issuer violates the legislation it shall notify the competent authority in the home country thereof. If, despite the measures taken by the competent authority in the home country or where such measures prove inadequate, the issuer persists in infringing the legislation, the Commission may, after informing the competent authority of the home country, take all the appropriate measures in order to protect investors. The Commission shall notify the European Commission of the measures taken within seven days after their implementation. 43
2.61
X
2.61
Judicial control
One of the main principles of the Bulgarian legal system is the possibility of the acts of the administration being subject to judicial control. With this respect, the POSA and the other pieces of legislation explicitly state that: the individual administrative acts of the Commission (such as denials for granting confirmation of prospectuses) can be appealed before the Supreme Administrative Court; the individual administrative acts of the Deputy Chairman of the Commission can be appealed under the procedure established with the Administrative Procedures Code before the Chairman of the Commission and the decision of the Chairman of the Commission before the Supreme Administrative Court. It shall be noted that the Court can decide on the legality of the appealed act but not on its objective (unless unlawful). However, in case an act is not wellreasoned the Court may abrogate it on these grounds. The appeal of an act of the Commission does not stop its execution automatically but such request may be filed too. As mentioned above the Commission may impose sanctions for breaches of the legislation. The procedure is regulated by the Administrative Violations and Sanctions Act. The sanctioned entity has the right to appeal the sanction imposed before the Court too.
Notes
1. According to the Financial Supervision Commission Act, financial supervision includes the supervision over:
(i) activities of the regulated securities markets, the Central Depository, investment intermediaries, investment and management companies, natural persons who are directly engaged in securities transactions and investment consultancy, public companies and other issuers of securities under the Public Offering of Securities Act and the Markets in Financial Instruments Act; (ii) activities of insurers, insurance brokers and insurance agents according to the Insurance Act and of health insurance companies according to the Health Insurance Act; (iii) activities of supplementary social insurance companies and of the funds managed thereby according to the Social Insurance Code.
2. The Bulgarian official currency; 1 BGN equals 1.95583 by virtue of a fixed exchange rate. 3. Under the POSA, Public offering of securities shall be a communication on offer of securities addressed to 100 or more persons or to an unrestricted circle of persons in any form whatsoever and by any means whatsoever, presenting
44
Bulgaria
2.61
sufficient information on the terms of the offer and the securities to be offered, so as to enable investors to decide to subscribe to or purchase the said securities. The placing of securities through a financial intermediary shall likewise be treated as public offering if it fulfils the conditions under the previous sentence. 4. Under the Bulgarian POSA, the exception applies only to the banks, i.e., not to all financial institutions. 5. This is not applicable to issuers of non-equity securities whose denomination per unit amounts to at least the BGN equivalent of 50,000.
45
3 Cyprus
A l ex a n dro s T sa di r a s
European University, Cyprus
Introduction 46 Competent authority 47 Prior approval and appeal procedures 48 1 Offering of securities to the public 48 A Procedure 48 B Exemptions 49 2 Admission to trading on a regulated market 50 A Procedure 50 B Exemptions 50 IV Content and format, language and supplements of the prospectus 50 1 Content 50 2 Format 52 3 Supplements 52 4 Language 53 V Publication and advertisements 53 1 Method of publication 53 2 Advertisements 55 VI Use of a prospectus approved in other (non-EU and non-EEA) countries 56 VII Sanctions 56 VIII Prospectus liability 57 IX Rules applicable to transactions and securities not subject to the Directive and Regulation 58 X Conclusion 58
I II III
I
3.1
Introduction
The Prospectus Directive was transposed into Cypriot law by way of Law 114(I)/2005 (the Public Offer and Prospectus Law or Law), which was published on 9 September 2005 and took effect on the same day.1 In addition to implementing the Prospectus Directive, the Public Offer and Prospectus Law facilitates the empirical application of the Prospectus Regulation. The Cyprus Securities and Exchange Commission (the CySEC), which, as will shortly be
46
Cyprus
3.3
noted, is designated as the competent national supervisory authority, has the power to issue directives with a view to regulating a variety of matters pertaining to the function of the Public Offer and Prospectus Law in practice .2 No such directives have been adopted to date.3 3.2 The Public Offer and Prospectus Law repeals the Investments Invitation to the Public Law of 2002.4 The latter is still valid in respect of: (i) sanctions regarding its infringement; and (ii) offers to the public which took place up until the coming into force of the Public Offer and Prospectus Law (Art. 47 Law) .
II
3.3
Competent authority
The competent authority for the approval of prospectuses in Cyprus is the CySEC. That is a public corporate body established and operating pursuant to the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law.5 The provisions of the foregoing legislative instrument governing the CySECs authority, including investigative powers, remedial competence and cooperation with regulatory entities abroad, are also applicable to matters treated by the Public Offer and Prospectus Law (Art. 36 Law). The CySEC is competent inter alia to: (a) require issuers, offerors or persons asking for admission to trading on a regulated market to include in the prospectus supplementary information if necessary for the protection of the investors; (b) require external auditors and managers of the issuer, offeror or person asking for admission to trading on a regulated market, as well as investment firms commissioned to carry out the offer to the public or ask for admission to trading, to provide information required for the examination of the application for approval of a prospectus; (c) prohibit or suspend advertisements of a public offer or admission of securities to trading for a maximum of ten consecutive working days on any single occasion if it has reasonable grounds for believing that the provisions of the Public Offer and Prospectus Law have been infringed; (d) prohibit a public offer if it finds that the provisions of the Public Offer and Prospectus Law have been infringed or if it has reasonable grounds for suspecting that they are infringed; (e) suspend or ask the relevant regulated markets to suspend trading on a regulated market for a maximum of ten consecutive working days on any single occasion if it has reasonable ground for believing that the provisions of the Public Offer and Prospectus Law have been infringed; (f) prohibit trading on a regulated market if it finds that the provisions of the Public Offer and Prospectus Law have been infringed; (g) make public the fact that an issuer is failing to comply with his obligations (Art. 37(1) Law and 21(3) Dir.). 47
3.4
3.4
The CySEC may transfer its competence to approve a prospectus to any competent regulatory authority of another Member State subject to the agreement of that authority. The criteria that the CySEC should apply when exercising that discretion are not indicated. The decision to transfer must be notified to the offeror or the person asking for admission of securities to trading within three working days starting from the date when the decision was taken. In those cases any applicable time limits commence from the date of the notification of the decision (Art. 26(8) Law) .
III 1
A
Prior approval and appeal procedures Offering of securities to the public

Procedure
3.5
No offer of securities to the public can be made in Cyprus without the publication of a prospectus which meets the prior approval by the CySEC or by the competent regulatory authority of another Member State pursuant to the Prospectus Directive (Art. 4(1) Law). That restriction also applies to the placement of securities through market intermediaries, including investment firms, provided that the placement falls under the definition of public offer and is not exempted from publication (Art. 4(1)(2) Law). The approval procedure contemplated in the Public Offer and Prospectus Law basically mirrors that set forth in Article 13 of the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 25). It is useful to recall the main steps of the procedure. The decision of the CySEC regarding the approval or rejection of the prospectus is notified to the issuer, the offeror or the person asking for admission of securities to trading on a regulated market, as the case may be, within ten working days of the submission of the draft prospectus (Art. 26(3) Law). The time limit is extended to twenty working days if the public offer involves securities issued by an issuer who does not have any securities admitted to trading on a regulated market and who has not previously offered securities to the public (Art. 26(6) Law). If the CySEC does not respond within the aforementioned time limits, the draft prospectus will not be deemed approved (Art. 26(3)(2) Law). In case the CySEC finds that the documents submitted to it are incomplete, it notifies the issuer within ten working days of the submission of the application (Art. 26(4) Law). The same authority may require that reasonable adjustments or corrections in the draft prospectus be made with a view to securing the transparency in the capital market and may subject the approval to the compliance of those responsible for the drafting of the prospectus to its instructions (Art. 26(5) Law) . In every public offer that takes place in Cyprus, an underwriter must participate. His duties include the collection of the purchase value of the securities
3.6 48
Cyprus
3.8
offered, the safe keeping of the moneys paid by the participants to the public offer and the making of the moneys available to the offeror at the soonest simultaneously with the allotment of the offered securities to the investors who participated in the public offer (Art. 22 Law) . 3.7 The Public Offer and Prospectus Law does not contain any provisions pertaining to the administrative or judicial challenge of the CySECs decisions to approve or reject, either explicitly (through a negative decision) or implicitly (through the expiry of the statutory time limit), the draft prospectus. The general substantive and procedural rules of administrative proceedings and litigation in Cyprus will therefore apply .6
Exemptions
3.8
Two categories of exemptions from the obligation to publish a prospectus for offers to the public or to any other placement are contemplated. On the one hand, Article 4(3) of the Public Offer and Prospectus Law introduces a number of exemptions which relate to the type of the intended offer and replicate those included in Article 3(2) of the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 11). That category comprises for example: (a) offers of securities addressed solely to qualified investors; (b) offers of securities addressed to a limited number of persons; (c) offers of securities addressed to investors who acquire securities for a consideration of at least 50,000 per investor, for each separate offer; (d) offers of securities whose denomination per unit amounts to at least 50,000, provided that the same unit cannot be acquired by more than one investor . Any resale of securities which were previously the object of one or more types of offer mentioned above will be considered as a separate offer and it will be examined with a view to ascertaining whether it constitutes a public offer of securities (Art. 4(4) Law and Art. 3(2)(2) Dir.). On the other hand, Article 5 of the Public Offer and Prospectus Law exempts certain types of securities, which are basically those provided for in Article 4(1) of the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 13). That category includes inter alia: (a) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued share capital; (b) securities offered in connection with a takeover by means of an exchange offer, provided that, in the framework of the takeover, a document is made available to the public containing information, which is regarded by the CySEC as being equivalent to that of the prospectus, taking into account the requirements of the relevant legislation in force; 49
3.8
(c) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available to the public containing information on the number and nature of the shares and the reasons for and details of the offer, or any other form of placement. The CySEC is entrusted with the issuance of directives to tackle any matters relating to the implementation of the above exemptions (Art. 5(2) Law) .
2
A

Procedure
3.9
No admission of securities on the Cyprus Stock Exchange or any other regulated market operating in Cyprus can be made without the approval of a prospectus by the CySEC. The procedure is identical to that which applies to public offerings (see no. 5 of this chapter) (Art. 6 Law).
Exemptions
3.10
Article 7 of the Public Offer and Prospectus Law sets out the exemptions to the obligation to publish a prospectus for the admission to trading on the Cyprus Stock Exchange or any other regulated market operating in Cyprus of certain types of securities. The list faithfully reproduces the textual content of Article 4(2) of the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 15). The following are, for example, exempted: (a) shares representing, over a period of twelve months, less than ten per cent of the number of shares of the same class already admitted to trading on the same regulated market; (b) securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the public containing information which is regarded by the CySEC as being equivalent to that of the prospectus, taking into account the requirements of the relevant legislation in force. The CySEC is empowered to issue directives with a view to regulating any special matters pertaining to the application of the above exemptions (Art. 7(2) Law) .
IV 1
3.11 50

The requisite content of the prospectus is set out in Article 8 of the Public Offer and Prospectus Law, which stipulates that the prospectus must contain
Cyprus
3.12
all the information which, according to the particular nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities.7 The information contained in the prospectus must be presented in an easily analysable and comprehensible form (Art. 8(2) Law). It is obvious that the requirements of the Prospectus Regulation must also be complied with. The prospectus issued for a public offer must in principle include the final offer price and the amount of securities that will be offered. In the event that this is not possible the prospectus must indicate the maximum offer price and the criteria and/or conditions pursuant to which the number of offered securities will be determined. Investors have the right to withdraw the acceptance of the purchase or cancel their registration for the purchase of the securities for not less than two working days after the date of designation and publication of the final offer price and/or the amount of securities which will be offered to the public. That right should be expressly stated in the prospectus. The final offer price and the amount of securities offered to the public must be filed with the CySEC and published in the same manner as the prospectus (Art. 13 Law and Art. 8(1) Dir.). 3.12 Following an application by the issuer, offeror or person asking for the admission of securities to trading on a regulated market, the CySEC may authorise the omission from the prospectus of certain information contemplated in the Public Offer and Prospectus Law and any subordinate directives, if it considers that any of the following scenarios apply: (a) the disclosure of such information would be contrary to the public interest; or (b) the disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer, offeror or guarantor, if any, and of the rights attached to the securities to which the prospectus relates; or (c) such information is of minor importance, only for a specific offer or admission to trading on a regulated market and is not such as will influence the assessment of the financial position and prospects of the issuer, offeror or guarantor, if any (Art. 15(1) Law and Art. 8(2) Dir.). Where, exceptionally, certain information that ought to have been included in the prospectus pursuant to the Prospectus Regulation is omitted as it is inappropriate to the issuers sphere of activity or to the legal form of the issuer or to the securities to which the prospectus relates, the prospectus must contain information equivalent to that which is required with a view to ensuring the proper information of the investors (Art. 15(2) Law and Art. 8(3) Dir.) . 51
3.13
3.13
The prospectus may incorporate information by reference to one or more previously or simultaneously published documents that have been approved by the CySEC or filed with it. The information referred to in the prospectus must be the latest available to the issuer and continue to be accurate. When information is incorporated by reference, a cross-reference list must be provided in order to enable investors to identify easily specific items of information (Art. 18 Law and Art. 11 Dir.) .
2
3.14
Format
It is at the discretion of the issuer, the offeror or the person asking for the admission to trading on a regulated market to draw up the prospectus as a single document or as separate documents (Art. 9(1) Law and Art. 5(3) Dir.). The prospectus which is drawn up as a single document consists of: (i) the main body, containing information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market and (ii) a summary note (Art. 9(2) Law) . The prospectus which is drawn up as separate documents comprises: (i) a registration document, containing the information relating to the issuer; (ii) a securities note, containing the information concerning the securities offered to the public or to be admitted to trading on a regulated market; and (iii) a summary note (Art. 9(3) Law and Art. 5(3) Dir.) . The precise content of the single and separate document prospectus is prescribed in Annex Two and Three of the Public Offer and Prospectus Law, respectively, which comply with the provisions of the Prospectus Regulation . For specific types of securities, such as non-equity securities, including warrants in any form, issued under an offering programme or non-equity securities issued in a continuous or repeated fashion by credit institutions the issuer, offeror or person requesting admission to trading on a regulated market may opt for a prospectus which consists of a base prospectus and contains all relevant information concerning the issuer and the securities offered to the public or to be admitted to trading on a regulated market (Arts. 11 and 12 Law and Art. 5(4) Dir.) .
3
3.15
Supplements
In case of a significant factor or a material mistake or inaccuracy relating to the information included in the prospectus which is capable of affecting the assessment of the securities offered and which arises or is noted in the period between approval of the prospectus and the final closing of the offer to the public or, as the case may be, the time when trading of the securities on a regulated market begins, the issuer, the offeror or the person asking for the admission of securities to trading must prepare a supplement to the prospectus (Art. 14(1) Law and Art. 16(1) Dir.). The CySEC approves the supplement within a maximum period of seven working days beginning from the day of its submission.
52
Cyprus
3.17
The procedures for the approval and the publication of the supplement are identical to those that are applicable to the original prospectus (Art. 14(3) and (4) Law and Art. 16(1) Dir.). The summary note and any translations thereof must also be amended, if necessary, with a view to taking into account the new information included in the supplement to the prospectus (Art. 14(5) Law and Art. 16(1) Dir.). In the event a supplement to the prospectus is issued which contains significant new elements as to the issuer or as to the securities or reveals material mistakes or inaccuracies relating to the information included in the prospectus, investors who have agreed or have been bound in any manner prior to the publication of the supplement to purchase or acquire by registration securities, in respect of which the prospectus refers to, based on the information therein, may withdraw and be released with no liability for them in respect of the promise and commitment they have undertaken. The withdrawal must be exercised within three working days starting from the publication of the supplement (Art. 14(6) and (7) Law and Art. 16(2) Dir.) .
4
3.16
Language
Article 34 of the Public Offer and Prospectus Law faithfully reflects Article 19 of the Prospectus Directive and regulates in detail the language in which the prospectus must be drafted (see Chapter 1, vol. I, of this book, no. 51). The requisite language depends on whether or not Cyprus is the home and/or the host Member State. The languages accepted by the CySEC are the two official languages of the Republic of Cyprus, namely Greek and Turkish.8 English, but not French or German, qualifies as a language customary in international financial circles and will also be accepted. In the event the prospectus is drawn up in English, the CySEC may require that the summary note be translated in either Greek or Turkish .
V 1
3.17

Once approved by and registered with the CySEC, the prospectus must be published by the offeror, the person asking for admission to trading on a regulated market or the underwriter who is responsible for the drawing up of the prospectus as soon as practicable and in any event at a reasonable time (i) in advance of, or, at the latest, at the beginning of the offer to the public of the securities involved; or (ii) prior to their admission to trading on the Cyprus Stock Exchange or other regulated market operating in Cyprus or, at the latest, upon their admission to it, as the case may be (Art. 27(1) Law). In the event of an initial public offer of a class of shares not already admitted to trading on a regulated market that is to be offered to the public for the first time, the 53
3.17
prospectus must be made available at least six working days before the end of the offer, provided that any commitment of investors to acquire that class of shares is forbidden before the prospectus is made available to the public (Art. 27(2) Law and Art. 14(1) Dir.) . 3.18 Article 27(3) of the Public Offer and Prospectus Law draws heavily upon Article 14(2) of the Prospectus Directive and provides different ways of publication (see Chapter 5, vol. I, of this book, no. 57). The prospectus is deemed to be published when it is made available in at least one of the following forms: (a) by insertion in one or more newspapers circulated throughout Cyprus; (b) in a printed form to be made available, free of charge, to the public: (i) at the offices of the Cyprus Stock Exchange or of the other regulated market on which the securities are being admitted to trading; or (ii) at the registered office of the issuer and at the registered offices of the underwriters and the investment firms placing, by sale or registration, the securities, including all those that have been authorised to accept the moneys of the investors deposited for the acquisition of the securities; (c) in an electronic form, on the internet site of the issuer and the internet site of the underwriters of the issuing, placing or offering to the public, including the investment firms placing or selling the securities, as well as those that have been authorised to accept the moneys of the investors deposited for the acquisition of the securities, if they exist; (d) in an electronic form, on the internet site of the Cyprus Stock Exchange or the other regulated market where their admission to trading is asked for; or (e) in an electronic form, on the internet site of the CySEC . The offeror or the person asking for admission of securities to trading on a regulated market is free to choose between the foregoing ways of publication and must notify the CySEC accordingly at the latest at the beginning of the offer to the public or the admission to trading (Art. 27(4) Law). Cyprus has exercised the options contained in Articles 14(2) and 14(3) of the Prospectus Directive and that has a twofold consequential implication. First, the issuers publishing their prospectus in the manner prescribed in the above paragraphs (a) and (b) are also obliged to publish their prospectus in an electronic form in accordance with paragraph (c) (Art. 27(3) Law). Second, the offeror or the person asking the admission of securities to a regulated market, is required to publish an announcement in which he states in which form the prospectus has been made available and where the public may obtain it (Art. 27(4) Law) . The published prospectuses as well as their supplements must at all times be identical to the original versions approved by the CySEC (Art. 27(6) Law and Art. 14(6 Dir.). That authority is under the obligation to publish on its website over a period of, at least, twelve months from the date of the first 54
Cyprus
3.19
publication (i) the full text of every prospectus it has approved or (ii) the list of the prospectuses approved with an explicit and specific reference to the website of the Cyprus Stock Exchange or of the other regulated market, as well as of the issuer and/or the underwriter responsible for the drawing up of the prospectus, where the full text of the approved prospectuses is published, provided that it has ensured that the full text of prospectuses will be published in the suggested website for a period of at least twelve months from the date of the first publication of the prospectus. In case of admitted securities to trading on the Cyprus Stock Exchange or on other regulated market in Cyprus, a full text of the prospectus must be published on the website of the Cyprus Stock Exchange or of the other regulated market for the same period (Art. 28 Law and Art. 14(4) Dir.) . The prospectuses are valid for a period of twelve months following their publication, provided they are duly supplemented (Art. 16(1) Law and Art. 9(1) Dir.) .
2
3.19
Advertisements
Any type of advertisement relating to an offer of securities to the public in Cyprus or to an admission to trading on the Cyprus Stock Exchange or on other regulated market must comply with Article 30 of the Public Offer and Prospectus Law, which is heavily inspired by Article 15 of the Prospectus Directive (see Chapter 1, vol. I, of this book, no. 62). The various methods of disseminating advertisements are set out in Chapter V of the Prospectus Regulation. In any case of an offer of securities to the public or of an admission to trading on the Cyprus Stock Exchange or on other regulated market, any type of advertisement announcing the offer or the admission to trading must be previously filed with the CySEC, which examines whether the advertising activity complies with applicable rules. It is worth noting that the foregoing control is carried out even in cases where the prospectus has been approved in another Member State of the European Economic Area which qualifies as the home Member State for the purposes of the Prospectus Directive . In the event that the issuer, the offeror or the person applying for admission of securities to trading on the Cyprus Stock Exchange or on other regulated market is under the obligation to draw up a prospectus, the relevant advertisement must meet the following requirements: (i) it must state that a prospectus has been or will be published and indicate where investors are or will be able to obtain it, or how investors will be able to have access to its full text; (ii) it must be clearly recognisable as such; and (iii) the information it contains must not be inaccurate or misleading, but consistent and without any conflict or discrepancy with the information contained in the prospectus if already published, or with the information required to be in the prospectus, if the prospectus is published afterwards. 55
3.19
In case no publication and approval of a prospectus is required, material information provided by an issuer or an offeror and addressed to qualified investors or special categories of investors, including information disclosed in the context of meetings relating to offers of securities, must be disclosed to all qualified investors or special categories of investors to whom the offer is exclusively addressed .
VI
3.20
Use of a prospectus approved in other (non-EU and non-EEA) countries

Where Cyprus is the home Member State of issuers incorporated in a third country, the CySEC may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up pursuant to legislation of the third country, under the condition that (i) the prospectus has been drafted in accordance with international standards set by international securities commission organisations, including the IOSCO disclosure standards; and (ii) the information requirements under the law, in accordance with which the prospectus was drafted, including information of a financial nature, are at least equivalent to those under the Public Offer and Prospectus Law (Art. 35(1) Law and Art. 20(1) Dir.). Where Cyprus is not the home Member State and securities of an issuer which has been incorporated in a third country are the object of an offer to the public or admission to trading on the Cyprus Stock Exchange or other regulated market in Cyprus, the prospectus and any supplement thereto will be deemed valid, provided that (i) their approval by the competent regulatory authority of the third country meets the requirements of the Prospectus Directive; (ii) they have been duly notified to the CySEC; and (iii) they are published in Cyprus in either Greek, Turkish or English (Art. 35(2) Law and Art. 20(2) Dir.) .
VII
3.21
Sanctions
Two types of sanction may be imposed either alternatively or cumulatively. On the one hand, criminal sanctions will be imposed upon whoever proceeds to the offer of securities to the public without respecting the requisite approval and publication procedures of the prospectus. The perpetrator is liable to imprisonment not exceeding two years or a fine not exceeding 170,860 or both. In case of a second or repeated conviction of the same offence the aforementioned ceilings are doubled (Art. 4(2) and 39 Law). On the other hand, the CySEC is empowered to impose a range of administrative sanctions following an investigation which might be proactive (own-initiative inquiries) or reactive (inquiries sparked by a complaint). Those sanctions will be imposed either:
56
Cyprus
3.22
(a) only to legal persons; or (b) only to directors, managers, officials, if it is proved that the violation was due to their own fault, wilful omission or negligence; or (c) to legal persons and to their directors, managers or officials if it is proved that the violation was due to their own fault, wilful omission or negligence (Art. 40 Law). There exist three tiers of maximum amount the administrative fine can reach, namely 42,715, 85,430 or 170,860 (Arts. 41(3), 41(2) and 41(1) Law). In case of relapse, the above ceilings are doubled. Which tier is applicable in every case depends on the subject matter of the established violation. A practical example will illustrate the point. While irregularities of the supplement to the prospectus may attract a fine of up to 85,430, admission of securities on the Cyprus Stock Exchange without prior publication of a prospectus may lead to a fine of up to 170,860. If despite the imposition of the administrative sanction the infringement persists and after a reasonable period of time (which may not be less than one month) has elapsed the CySEC may impose a new administrative fine and may do so repeatedly, treating non-compliance as a relapse of the breach (Art. 41(4) Law). In all cases, where an administrative fine has been imposed, the offender is in addition liable for any damages, including loss of profits, caused to any person who responded to the public offer and purchased securities on the regulated market based on inaccurate or incomplete information of the prospectus (Art. 41(5) Law). The collection of unpaid administrative fines is effected by application of the relevant provisions of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law (Art. 42(2) Law) .
VIII
3.22
The prospectus must clearly identify the persons responsible for the provision of information presented in it (e.g., the issuer, offeror or person asking for the admission of securities to trading) and must compulsorily state their names and functions or, in the case of legal persons, their names and registered offices (Art. 20(5) Law and Art. 6(1) Dir.). Those persons are under the obligation to provide a statutory declaration, which is included in the prospectus, stating that, having exercised due care so as to form a responsible opinion, they confirm that the information contained in the prospectus is true and correct and that in the prospectus there are no omissions likely to alter its content and or mislead the investors. They must also exercise due care in the preparation of the prospectus particularly in relation to the accuracy, completeness, clarity and update of its contents so as to make sure that investors are given true, full and objective information. In addition, they are liable to investors fully, jointly and severally for loss the latter have sustained as a result of any omissions in the prospectus (Art. 20(6) Law) . 57
3.22
The persons who submitted the summary note and any of its translations, and asked for its publication or its notification, bear civil liability only if the note is misleading, inaccurate or inconsistent when read together with the main part of the prospectus and no liability can arise solely on the basis of the summary note (Art. 21(2) Law and Art. 6(2)(2) Dir.). 3.23 Special provision is made for the liability of the underwriter responsible for the drawing up and signing of the prospectus in the case of public offer or first admittance to trading on a regulated market (Art. 23 Law). In any claim for damages for prospectus liability the burden is placed upon the persons who have signed it to prove that it is accurate, complete, clear and updated or free from any omissions or errors (Art. 21(1) Law). The claim must in principle be brought within two years starting from the date the securities were made available or were admitted to trading on a regulated market (Art. 21(3) Law).
3.24
IX
3.25
Rules applicable to transactions and securities not subject to the Directive and Regulation
Public offerings and admissions on the Cyprus Stock Exchange of securities that fall outside the material scope of application of the Public Offer and Prospectus Law do not require the publication of a prospectus, except if such an obligation is laid down by specific legislation.
X
3.26
Conclusion
The preceding discussion has focused on the transposition of the Prospectus Directive into the legal regime of the Cyprus Republic. The domestic legislative instrument appears to reflect faithfully its parent European Act and it can be argued with a reasonable degree of certainty that no major problems of incompatibility should be expected to arise. The picture would however be incomplete without brief consideration of the practical application of the prospectus legislation, domestic and European, in Cyprus. Empirical investigation yields a number of positive findings. At the time of writing more than sixty five prospectuses and supplements thereto have been published without any considerable administrative delays being recorded. In addition, CySECs cooperation with the competent authorities of other Member States has proven to be smooth and untroubled as more than fifty-five notifications of already approved prospectuses have been effected without any particular difficulties being raised.9 The emerging success of the prospectus legislation in the domestic securities market of Cyprus should not, however, blind us to the fact that the creation of a real common space for public offerings and admissions to trading in the European Union is a Herculean task, whose complexity and enormity can hardly be overlooked. Whether the Prospectus
58
Cyprus
3.26
Directive has achieved its stated objectives at the European level is an engaging question; it cannot, however, be safely answered unless adequate empirical data is gathered and sufficient time elapses allowing for better informed and composed reflection .
Notes
1. Law 114(I)/2005 providing for the conditions for making an offer to the public of securities, on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and other incidental matters of 2005, Official Gazette of the Republic of Cyprus 2005, Issue no. 4031, Appendix 1, Part I, p. 783, of 9 September 2005. It will be recalled that the deadline for the transposition of the Prospectus Directive was 1 July 2005. 2. See, e.g., Arts. 5(2) and 7(2) Law concerning the exemptions from the obligation to publish a prospectus for making an offer of securities to the public and for admission of securities to trading on a regulated market, respectively; Arts. 25, 26(9) and 29 Law relating to details and technical issues in connection with the drafting, approval and publication of the prospectus, respectively. 3. The CySEC has, however, issued circular E01/2006 of 24 January 2006 in order to draw attention to Article 17 Law (Art. 10 Dir.), which provides for the publication of at least an annual Bulletin containing or referring to all the information published by the issuers or made available to the public over the preceding twelve months . 4. Law 149(I)/2002, Issue No. 3626, Appendix 1, Part II, p. 2547, of 26 July 2002. 5. Law 64(I)/2001, Issue No. 3491, Appendix 1, Part I, p. 383, of 20 April 2001, as amended. 6. See Article 146 of the Cyprus Constitution, pursuant to which the Supreme Constitutional Court has exclusive jurisdiction to adjudicate on complaints that a decision, an act or an omission of any organ, authority or person, exercising any executive or administrative authority, is contrary to any of the provisions of the Constitution or of any law or is made in excess or in abuse of powers vested in such organ or authority or person. The applicant must prove that the challenged decision, act or omission has adversely and directly affected an existing legitimate interest of his and the application must be filed within seventy-five days starting from the date when the decision or act was published or, if not published and in the case of an omission, when it came to the knowledge of the applicant. 7. The wording is identical to Art. 5(1) Dir. (see Chapter 1, no. 28 of vol. I of this book). 8. Art. 3 of the Cyprus Constitution. 9. Empirical data can be derived from the CySECs informative website at www. cysec.gov.cy/default_en.aspx under issuers and the authoritys helpful and responsive staff.
59
4 Finland
M i k ko H e i non e n a n d K l aus I l mon e n
Hannes Snellman, Attorneys-at-law Ltd
I II III IV
VI
VII VIII IX X XI XII XIII XIV
Introduction 60 Application 61 Scope 61 Obligation to prepare and publish a prospectus and exemptions 62 1 Obligation to prepare a prospectus 62 2 Exemptions 62 Prior approval of the competent authority 63 1 Competent authority 63 2 Approval procedure 64 Content, format and language of the prospectus and related documents 65 1 Content and incorporation by reference; permissible omission of information 65 A Inclusion of all necessary information 65 B Schedules and building blocks 65 C Financial information presented in accordance with IFRS 65 D Summary 66 E Permitted omissions 66 F Incorporation by reference 66 2 Language 66 3 Term of validity 67 Publication and advertisements 67 Supplements and new information 67 Annual information 68 Cross-border offerings and admissions to trading 69 Issuers incorporated outside the European Economic Area 69 Special powers of the competent authorities and sanctions 70 Prospectus liability 70 Conclusion 71
I
4.1
Introduction
Finland has implemented the Prospectus Directive as of 1 July 2005 by introducing amendments mainly to the Finnish Securities Markets Act and regulation related thereto.1
60
Finland
4.4
The main statute applied to the issuance of securities to the public and to public trade in securities is the Finnish Securities Markets Act (Arvopaperimarkkinalaki, 495/1989, the SMA). The Ministry of Finance and the Financial Supervision Authority have issued further regulation and guidance applicable to securities offerings . The Finnish Financial Supervision Authority (Rahoitustarkastus) is responsible for monitoring the securities markets as well as the activities of key market participants. The Financial Supervision Authority is responsible for approving offering documents in Finland. The Financial Supervision Authority has also issued further regulation and guidance on the interpretation of the SMA to the offering of securities in Finland.
II
4.2
Application
Finland implemented the Prospectus Directive by 1 July 2005 as required by the Prospectus Directive. The Prospectus Regulation was also in force and applied in Finland as of that date. The Finnish Financial Supervision Authority has revised its detailed guidance related to the issuance of securities and prospectuses to reflect the requirements of the Prospectus Directive. The guidance has been issued in the form of a revised Standard of the Financial Supervision Authority consisting of recommendations for market practice and interpretative guidance related to the SMA. The revised standard took effect as of 1 February 2007.2
III
4.3
Scope
The SMA applies to the issuance of securities to the public, the transfer and clearing of securities issued to the public, as well as to public trade in securities in Finland. Certain provisions of the SMA, mainly related to notification obligations of shareholders, also apply to a Finnish limited company whose shares have been admitted to public trade on a regulated market elsewhere within the European Economic Area as well as to a shareholder and a person corresponding to a shareholder of such a company. The SMA applies to a security which is transferable and issued or meant to be issued to the public together with several other securities with similar rights.3 This may, for example, be a certificate that is issued for: (i) a share or other participation in a company or the right to a dividend, interest or other proceeds or to subscription connected thereto; (ii) a unit in a bond or other corresponding obligation of the debtor or the right to interest or proceeds connected to the said unit or obligation; (iii) a combination of the rights referred to in paragraphs 1 and 2; 61
4.4
4.4
(iv) a right to purchase or to sale relating to the said rights; (v) a unit in a fund or a unit in an undertaking for collective investment in transferable securities comparable thereto; as well as for (vi) a right other than one referred to above based on a contract or an obligation. 4.5 The SMA also applies to a standardised option and future in accordance with the Act on Trade in Standardised Options and Futures (772/1988), and other comparable derivatives contracts. The SMA does not apply to a security which alone or together with other securities produces: (i) the right to dispose of a certain apartment, other premises or real estate or a part of real estate; or (ii) the right to use or to obtain commodities referred to in the Consumer Protection Act (38/1978) other than securities, if the value of the security is based mainly on the said right .
IV 1
4.6
Obligation to prepare and publish a prospectus and exemptions Obligation to prepare a prospectus
Anyone who offers securities to the public or applies for the admission to public trading of securities shall be under an obligation to publish a prospectus relating to the securities before the entry into force of the offer or the admission to public trading and to have it available for the public during the validity of the offer. In addition to the offeror and the issuer, the party managing the offer or the application for admission to public trading on the basis of an engagement shall also be liable for the preparation and publication of the prospectus.4 The obligation to publish a prospectus shall not apply to a situation where the issuer of a non-equity security is the State of Finland, the Bank of Finland, a Finnish municipality or joint municipal authority or another State belonging to the European Economic Area, its central bank or its regional administrative unit or a public international body whose members include at least one State belonging to the European Economic Area, or the European Central Bank. Nor does the obligation apply to a situation where the securities offered or applied to be admitted to public trading are covered by an absolute guarantee by the State of Finland, a Finnish municipality or joint municipal authority or another Member State of the European Economic Area or its regional administrative unit .
2
4.7
Exemptions
Exemptions from the obligation to publish a prospectus in connection with the offering of securities in Finland are based on the principles set out in the
62
Finland
4.8
Prospectus Directive.5 There is no obligation to publish a prospectus if the offering or listing concerns securities identified in Article 1(2) of the Prospectus Directive.6 An exemption from the obligation to publish a prospectus is also automatically available if securities are offered:7 (i) solely to experienced investors; (ii) in Finland to under 100 investors who are not experienced investors referred to above; (iii) to be acquired for a consideration of at least 50,000 per investor with regard to an offer or in portions of at least 50,000 in nominal or counter value; or (iv) so that the total consideration is under 100,000 calculated for a twelvemonth period . In addition, the FSA may grant an exemption from the obligation to publish a prospectus upon application in specific circumstances .8
V 1
4.8
Prior approval of the competent authority Competent authority

In Finland, the competent authority, as provided in the Prospectus Directive, is the Finnish Financial Supervision Authority, an independent governmental entity operating in connection with the Bank of Finland.9 The Financial Supervision Authority supervises financial markets in Finland, as well as certain supervised entities, such as securities, intermediaries and credit institutions. The Financial Supervision Authority has jurisdiction and competence to consider the approval of a prospectus if: (i) the home Member State of the issuer of the securities is Finland; or (ii) the competent authority of another Member State of the European Economic Area has requested that it takes over the approval of the prospectus and the Financial Supervision Authority has consented thereto. The Financial Supervision Authority may decide on the transfer the application to another competent authority belonging to the European Economic Area. The decision may be made if the applicant requests a transfer or if, due to the circumstances of the offering, the offer or the admission to trading has a significant connection to another Member State of the European Economic Area and the competent authority of the receiving Member State consents to the transfer. The Financial Supervision Authority shall inform the applicant of its decision within three banking days from the making of the decision . 63
4.9
2
4.9
Approval procedure
The prospectus may be published only after the Financial Supervision Authority has approved it. The prospectus is filed with the Financial Supervision Authority when the document meets the prospectus criteria based on the Prospectus Directive and the Regulation. Typically, the Financial Supervision Authority will issue comments and requests for amendments to the draft prospectus, and minor changes can still be made during the prospectus review process. The review period by the Financial Supervision Authority is ten banking days from the submission of the prospectus for approval. If the prospectus relates to the securities of an issuer whose securities have not earlier been offered to the public or admitted to public trading or to corresponding trading in a Member State of the European Economic Area, the review period is twenty banking days from the submission of the prospectus . If the Financial Supervision Authority deems the filed documents to be incomplete or that additional information is needed, the review period is calculated from the date when the additional information is submitted to the Financial Supervision Authority. The Financial Supervision Authority shall ask the applicant to supplement its application within ten banking days from the submission of the application. If the prospectus has to be supplemented after the approval, the Financial Supervision Authority shall decide on the approval of the supplement within seven banking days from the submission of the supplement for approval . A copy of the prospectus shall be submitted to the Financial Supervision Authority when it is published by the issuer. The Financial Supervision Authority publishes the prospectus on its home pages. In addition to the prospectus, advertising materials related to the offering must be submitted to the Financial Supervision Authority in connection with listings and initial public offerings. Pursuant to the SMA, any marketing material relating to such an offer or the admission to public trading shall be submitted to the Financial Supervision Authority within two banking days from the submission of the prospectus to the Financial Supervision Authority for approval . The marketing material shall include a reference to the prospectus and state the place where the prospectus is available .10 In connection with the listing of securities on the Helsinki Stock Exchange, an application for the listing shall also be made with the stock exchange separately from filing the prospectus with the Financial Supervision Authority. The purpose of the listing process is mainly to establish that the listing criteria of the exchange are met .
4.10
64
Finland
4.14
VI 1
A
Content, format and language of the prospectus and related documents Content and incorporation by reference; permissible omission of information
Inclusion of all necessary information
4.11
Regulation on prospectus contents is mainly based on the Prospectus Regulation. The SMA provides that the prospectus shall, in addition to this SMA, be governed by the Prospectus Regulation. Under the general rule in the SMA, reflecting the requirements of the Prospectus Directive, anyone who offers securities or applies for admission of a security to public trading shall be liable to keep sufficient information on factors that may have a material effect on the value of the security which is equally available to the investors.11 The prospectus shall provide sufficient information to the investor for the making of a founded assessment on the securities and their issuer, as well as on the possible guarantor. The prospectus shall contain essential and sufficient information on the assets, liabilities, financial position, result and future outlook of the issuer and the possible guarantor, as well as on the rights attached to the securities and other factors with a material effect on the value of the securities. When securities are applied to be admitted to public trading or when they are included in an offer of at least 2.5 million in counter-value calculated for a twelve-month time period, the prospectus shall present the information required in the SMA and the provisions issued thereunder as well as in the Prospectus Regulation.12 With regard to offerings that do not trigger the application of the Prospectus Regulation, domestic rules are applied .13
Schedules and building blocks
4.12
4.13
The SMA provides that the information in a prospectus shall be presented in a logical and easily comprehensible form.14 The prospectus shall be published either as one document or as a document consisting of three parts, as provided in the Prospectus Directive (Art. 12 Dir.). The sections of the three-part document are: (i) the base prospectus; (ii) the securities note; and (iii) the summary note. In a three-part document, the base prospectus shall contain information on the issuer and the securities note on the securities offered to the public or intended to be admitted to public trading.
Financial information presented in accordance with IFRS
4.14
Financial information shall be included in the prospectus for the past three financial periods. Financial statements for issuers within the European Union shall be drawn up pursuant to International Financial Reporting Standards (IFRS). However, financial statements need not be restated for any period prior to 1 January 2004. In initial public offerings, financial statements for the past two financial periods are typically drawn up in accordance with IFRS, while 65
4.14
the third financial period is allowed to be presented under Finnish accounting standards. With regard to financial statements drawn up under IFRS, the financial statements, as defined under standard IAS 1, are included in the prospectus. It can be noted that the Finnish Financial Supervision Authority requires that, with regard to Finnish issuers, the complete financial statements pursuant to the Finnish Accounting Act (1336/1997) be included in the prospectus. Consequently, both consolidated and parent company financial statements are to be included, as well as the annual operating review of the Board of Directors .
D Summary
4.15
A prospectus shall generally contain a summary note. The summary note shall present, in a short form and in common terminology, the material information and risks relating to the issuer and the possible guarantor as well as to the said securities. In accordance with Decree 452/2005 of the Ministry of Finance, the summary shall further explicitly state that it is to be deemed as an introduction to the prospectus, and that issuers should acquaint themselves with the prospectus in whole. Furthermore, it shall be stated that in case legal claims are made in Finland on the basis of the prospectus, the claimant may be required to cover any costs related to the translation of the prospectus, if required .
Permitted omissions
4.16
The Financial Supervision Authority may grant an exemption from the contents of a prospectus. The exemption may be granted on condition that it is not in violation of the provisions of the Prospectus Directive or the Prospectus Regulation. The circumstances in which omissions may be permitted are set out in more detail in secondary regulation in the Ministry of Finance Decree 452/2005.15
Incorporation by reference
4.17
Finnish regulation allows for information to be incorporated by reference in the prospectus. Such information shall be published previously or at the same time as the prospectus is published. Furthermore, the relevant information shall have been previously approved by the Financial Supervision Authority, or provided to the Financial Supervision Authority together with the application for the approval of the prospectus .16
2
4.18 66
Language
The prospectus shall be published in Finnish or Swedish if the securities are offered to the public or applied to be admitted to public trading solely in
Finland
4.21
Finland.17 The Financial Supervision Authority may, however, upon application, consent to the prospectus being drafted in another language as well. The language of the prospectus shall, on the basis of Article 19 of the Prospectus Directive, be governed by a Decree of the Ministry of Finance when offering securities to the public or applying for their admission to public trading also or solely outside Finland.
3
4.19
Term of validity
The prospectus shall remain valid throughout the offer period, or until the securities referred to in the prospectus have been admitted to public trading. However, a prospectus can remain valid for twelve months after its publication at the most.18 A prospectus approved and published earlier with less than twelve months from its publication, may be used when offering or applying for the admission to public trading of securities provided that the information in the prospectus is supplemented. An approved base prospectus is valid for twelve months from its publication.
VII
4.20
Publication and advertisements

Detailed rules on the publication of the prospectus are contained in a Decree of the Ministry of Finance on prospectuses. Pursuant to the decree, a prospectus shall be published no later than two banking days before the beginning of the public offering period. In the event of an offering of a class of shares not already admitted to trading on a regulated market in the EEA, the prospectus must be made available no later than six banking days before the earliest possible end of the offering period .19 The prospectus can be published and made available to the public, for example, by keeping printed copies of the prospectus available for the public without cost at the premises of the issuer or the managers of the offering, or electronically on the homepages of the issuer or the managers. A printed copy of the prospectus must always be provided to offerees at request .20
VIII
4.21
Supplements and new information

Pursuant to the SMA,21 a fault or omission in the prospectus which is discovered before the end of the period of validity of an offer or the admission of the security to public trading and which may be material to the investor, shall be communicated to the public by publishing a supplement to the prospectus in the same manner as the prospectus. Investors who have committed to 67
4.21
subscribe or buy the securities before the publication of a supplement to the prospectus, shall be granted the right to withdraw their decisions generally within two banking days. If securities are offered conditionally so that the final decision on the subscription or purchase price or the amount of the securities has not yet been made, the prospectus may be published without this information. The offeror of the securities shall, however, supplement the prospectus with the said information by publishing it in the same manner as the prospectus without undue delay after making the decision to offer the securities. If the basis for determining the amount and price of the securities or the maximum price are not disclosed in the prospectus, the investors shall have the right to withdraw their decision to subscribe or purchase the securities within two banking days from the publication of the information on the final amount and price of the securities .
IX
4.22
Annual information
Pursuant to the Prospectus Directive, issuers whose securities are admitted to trading on a regulated market must prepare, at least annually, a document containing or referring to all information published over the preceding twelve months, both in and outside the European Union (Art. 10(1) Dir.).22 In this regard, the Finnish SMA provides that an issuer of a security subject to public trading shall publish a document of the information published during the previous financial period (annual summary). The annual summary shall at least contain a reference to the information which the issuer has published under the provisions of the SMA, the provisions issued thereunder or confirmed rules or under similar foreign provisions or rules. When only making a reference to the information, it shall be stated where the information is easily available. The annual summary shall be published as well as submitted to the Financial Supervision Authority and the relevant organiser of public trading within the time period provided for in the Commission Prospectus Regulation. If the prospectus relating to a security of an issuer subject to public trading has been scrutinised by an authority of a State belonging to the European Economic Area other than the Financial Supervision Authority, the annual summary shall be submitted, in addition to the Financial Supervision Authority, also to the said authority. The provisions of the Prospectus Regulation shall be complied with in the publication of the annual summary. The issuer of securities other than equity securities subject to public trading with a nominal value or counter-book-value of at least 50,000 shall not be liable to publish an annual summary .
68
Finland
4.25
X
4.23
Cross-border offerings and admissions to trading

The Finnish Financial Supervision Authority is the competent authority in Finland also as regards the procedures for notification of prospectuses to other EEA Member States, or when prospectuses approved by competent authorities in other Member States are used in Finland . Where an issuer intends to offer or apply for the admission to public trading of securities in one or more Member States of the EEA, the Financial Supervision Authority shall, upon the request of the applicant, submit a certificate to the competent authority of the said Member States to the effect that the prospectus has been drawn up in accordance with the Prospectus Directive together with a copy of the prospectus and any supplements. The certificate shall be submitted to the relevant competent authority within three banking days from the presentation of the request to the Financial Supervision Authority, or, if the request is presented simultaneously with the submission of the prospectus or its supplement for approval, within one banking day from the approval of the prospectus or its supplement . If exemptions from the contents of the prospectus have been granted, this shall be mentioned in the certificate. The Financial Supervision Authority will recognise a prospectus approved in another Member State of the EEA, provided that the competent authority of the other Member State submits copies of the prospectus and any supplements to the Financial Supervision Authority together with a certificate to the effect that the documents have been drawn up in accordance with the Prospectus Directive. If the authority of another State has consented to the omission of information required by the Prospectus Directive, the exemption and the reasons therefore shall be stated in the certificate. The prospectus used by the foreign issuer in Finland shall be drawn up in a language commonly used in international financial markets or in another language approved by the Financial Supervision Authority. The Financial Supervision Authority may request that a summary of the prospectus is translated into Finnish or Swedish .
4.24
XI
4.25
Issuers incorporated outside the European Economic Area

The Financial Supervision Authority can under certain circumstances approve a prospectus of a non-EEA issuer that has been drawn up under rules other than the Prospectus Directive and regulation given thereunder. In such cases, the Financial Supervision Authority shall approve the prospectus provided that it meets criteria set by international regulatory bodies of supervisory authorities of the securities markets which correspond to the SMA, the Prospectus Directive and provisions issued thereunder. The applicant shall present a clarification of the conformity of the criteria as well as of whether an authority of the place of registered office of the issuer or another authority has approved the prospectus. 69
4.26
XII
4.26
Special powers of the competent authorities and sanctions

The Financial Supervision Authority has the explicit authority to monitor the issuance of and trading in financial instruments. The Financial Supervision Authority also has authority over issuers of publicly-traded securities, or for which admission to public trading has been sought, as well as to other parties with an obligation to publish a prospectus. For supervisory purposes, the Financial Supervision Authority is entitled to obtain from issuers such documents and other records concerning the issuer as the Financial Supervision Authority considers necessary for the performance of its responsibilities, of which documents and records the Financial Supervision Authority shall be entitled to obtain copies as deemed necessary. If necessary, the Financial Supervision Authority also has the right to summon a person to a hearing conducted for the purpose of supervising compliance with the provisions of the Securities Markets Act on, inter alia, the disclosure of information affecting the value of publicly-traded securities. The Financial Supervision Authority can impose certain administrative penalties on parties it supervises, including an administrative fine, a public reprimand or a public warning. The Financial Supervision Authority can also initiate action in the Finnish market court .
XIII
4.27
Under the SMA, anyone who offers securities to the public or applies for the admission to public trading of a security shall be under an obligation to publish a prospectus relating to the securities. In addition to the offeror and the management of the issuer, the party managing the offer or the application for admission to public trading on the basis of an engagement shall also be liable for the preparation and publication of the prospectus. Pursuant to the SMA, then, an offeror of securities, as well as the manager, has an obligation to prepare and make public a prospectus in a securities offering. The SMA provides that anyone who causes damage by breaching the SMA or provisions issued thereunder shall be liable to compensate the damage he has caused. In Finland, prospectus liability is generally based on negligence and assessed separately for each party participating in drawing up the prospectus. It has been unclear, however, to what extent an investor who has subscribed for shares in an offering can make claims against the issuer company, as the distribution of funds from a limited liability company to its shareholders is subject to specific regulation in the Companies Act. In this respect, prospectus liability has been subject to recent discussion in Finland. A legal analysis of prospectus liability was conducted in connection with the implementation of the Prospectus Directive in Finland.23 New regulation is expected regarding prospectus liability that would clarify the prospectus liability of the issuer .
70
Finland
4.28
XIV
4.28
Conclusion
Since the Prospectus Directive was implemented in Finland in 2005, practice has largely settled in key areas covered by the new rules. Prospectuses for equity offerings largely follow, in form and content, international market practice for offering documents. The possibility of using a base prospectus has been taken advantage of mainly by issuers of debt instruments, while notifications have remained quite low as the possibility of executing international offerings as private placements in Member States of the European Economic Area has been clarified by the new definitions of a public offering introduced by the Prospectus Directive.
Notes
1. The amendments were introduced by the Act on Amending the Securities Markets Act 23.6.2005/448 (Laki arvopaperimarkkinalain muuttamisesta) based on government bill 38/2005. 2. Standard on Securities Offerings and Listing 5.2.a), as amended. 3. SMA, Chapter 2, section 2. 4. SMA, Chapter 2, section 3. 5. See Art. 4(1) of the Prospectus Directive. 6. See Chapter III.2 Excluded Securities. 7. Ministry of Finance Decree 452/2005, section 7. 8. Ministry of Finance Decree 452/2005, section 8 and section 9. 9. The Act on the Financial Supervision Authority (2003/587), section 6. 10. SMA, Chapter 2, section 4c. 11. SMA, Chapter 2, section 2. 12. SMA, Chapter 2, section 3a. 13. Ministry of Finance Decree 14.7.2005/538. 14. SMA, Chapter 2, section 3a. 15. Decree of the Ministry of Finance 23.6.2005/452, sections 8 and 9. 16. Decree of the Ministry of Finance 23.6.2005/452, section 11. 17. SMA, Chapter 2, section 3d. 18. SMA, Chapter 2 section 4d. 19. Decree of the Ministry of Finance 23.6.2005/452, section 4. See also Chapter VII 1., Publication of the Report. 20. Decree of the Ministry of Finance 23.6.2005/452, section 2. 21. SMA, Chapter 2, section 3b. 22. See Chapter IX, Annual Information of the Report. 23. Report of the Prospectus Liability Working Group, 18 October 2005, The Ministry of Finance, Working Papers 10/2005.
71
5 France
J e a n-M a rc De sac h
Gide Loyrette Nouel
Introduction 73 1 Legal framework and legislative history 73 2 Definitions 74 A Securities 74 B Offer of securities to the public or admission to trading on a regulated market 74 II Competent authority 74 III Procedure of prior approval and appeal 75 1 Offer of securities to the public and admission to trading on a regulated market 75 2 Exemptions regulation 75 A Transactions that do not constitute a public offer: private placements 76 B Transactions that do not constitute a public offer: the quality of the guarantor or the issuer 77 C Transactions that constitute a public offer but exempted from the obligation to publish a prospectus 77 3 No individual exemptions 78 4 Procedure 78 IV Content and format, language and supplements of the prospectus 78 1 Content 78 2 Format 80 3 Supplements 80 4 Language 81 V Publication and advertisements 82 1 Method of publication 82 2 Advertisements relating to an offer of securities to the public 83 VI Sanctions 84 1 Right of the AMF to suspend and prohibit a transaction 84 2 Right of the AMF to control prospectuses approved by a foreign supervisory authority when irregularities were committed in connection with a public offering made in France 84 VII Prospectus liability 85 VIII Conclusion 85
72
France
5.3
I 1
5.1
Introduction Legal framework and legislative history

The Autorit des Marchs Financers (AMF) is Frances financial regulatory authority.1 The AMF, an independent public authority with legal personality and financial autonomy, deals with protection of savings invested in financial instruments and all other investments which give rise to public offerings, the information provided to investors and the proper functioning of the financial instruments markets. In the performance of its duties, the AMF applies a General Regulation (the AMF General Regulation) which is published in the Official Journal of the French Republic following approval by order of the Minister for the Economy. The AMF may make decisions of individual scope when applying its AMF General Regulation and exercising its other competences. It may also publish instructions and recommendations to clarify interpretation of the AMF General Regulation. In France, transposition of European Community legislation with respect to financial matters is carried out by law and decree amending the French Monetary and Financial Code (Code montaire et financier, Monetary and Financial Code) proposed by the French Government or Parliament, and by order of the Minister for the Economy proposed by the AMF amending its AMF General Regulation. Implementation of the Prospectus Directive and the Prospectus Regulation in France has been achieved by: (i) a law dated 26 July 2005 known as the loi Breton,2 which amended the Monetary and Financial Code; (ii) decrees dated 2 August 20053 and 16 May 2006,4 which amended in particular the decree dated 1 October 1998,5 containing the definition of qualified investors; (iii) an order of the Minister for the Economy dated 1 September 2005, which amended the AMF General Regulation; (iv) implementing measure (instruction) of the AMF General Regulation no. 200511 dated 13 December 2005, as amended, relating to the information to be provided in relation to a public offering. The AMF also published a guide on the drawing-up of a registration document, dated 27 January 2006, and a specific guide on the drawing-up of a registration document for mid- and small-cap companies, dated 25 February 2008.
5.2
5.3
Obviously, all the French rules resulting from the implementation of the Prospectus Directive and Prospectus Regulation shall be construed in the light of the Committee of European Securities Regulators Recommendations of February 2005 (CESRs Recommendations). 73
5.4
2
5.4
Definitions
In this paragraph, some remarks will be made with respect to the way in which certain key concepts have been defined under French law, i.e., securities and the offer of securities to the public or admission to trading on a regulated market.
Securities
5.5
The Prospectus Directive provides that it applies to securities offered to the public or admitted to trading on a regulated market. Under French law, securities subject to the rules of the Prospectus Directive include, pursuant to Article L.211-1 of the Monetary and Financial Code, in particular: (i) shares and other securities which give, or could give, direct or indirect access to the share capital or voting rights and which are transferable by book entry or delivery; and (ii) debt securities, each of which represents a right against the legal entity or securitisation fund which issues them, and are transferable by book entry or delivery, with the exception of bills exchange and certificates of deposit. Key elements of these securities are the transferability and the negotiability.
Offer of securities to the public or admission to trading on a regulated market
5.6
The purpose of the Prospectus Directive is to harmonise requirements for the drawing-up, approval and distribution of the prospectus to be published when securities are: (i) offered to the public; or (ii) admitted to trading on a regulated market situated or operating within a Member State (Art. 1(1) Dir.). Under French law, both events were already included through a legal definition of public offer (appel public lpargne) provided for by Article L.411-1 of the Monetary and Financial Code, which therefore remains unchanged following the implementation of the Prospectus Directive. Article L.411-1 of the Monetary and Financial Code defines the appel public lpargne as either: an admission to trading of securities on a regulated market;6 or the issue or sale of securities to the public by means of advertising, solicitation (dmarchage)7 or use of a financial intermediary. Even though the French definition of offer of securities to the public is close to the Prospectus Directive definition, they are not identical and a reform is currently underway in France to bring the French definition into line with the European definition.
5.7
II
5.8
Competent authority
The AMF is the competent authority to approve prospectuses in France where France is the home Member State for the purposes of the Prospectus Directive,
74
France
5.10
i.e., pursuant to Article 2(1)(m) of the Prospectus Directive implemented by Article 212-2 of the AMF General Regulation. For an issuer having its registered office in France, the AMF will always be the competent authority to approve a prospectus relating to equity securities, or non-equity securities with a nominal value per security of less than 1,000. The issuer of debt securities with a nominal value more than or equal to 1,000 can choose the AMF to approve its prospectus provided that its registered office is in France or the transaction is carried out in France (offer and/ or listing). The AMF may agree to approve the draft prospectus at the request of the competent authority of another Member State of the European Community or a State party to the EEA agreement. When the AMF is not the competent authority to approve the prospectus and a person or an entity wishes to offer financial instruments to the public in France, the supervisory authority having approved the prospectus may send to the AMF, at the request of the persons or entities wishing to offer financial instruments to the public in France, a certificate of approval8 and a copy of the prospectus, together with a French translation of the summary note, where appropriate.
III 1
5.9
Procedure of prior approval and appeal Offer of securities to the public and admission to trading on a regulated market
In accordance with the Prospectus Directive, French law provides that any offer of securities to the public in France and any admission to trading of securities on a regulated market in France is subject to the drawing-up of a prospectus to be approved by the AMF or by a competent regulatory authority of another Member State, and subsequently published. However, French law provides some exemptions from the obligation to publish a prospectus most of which derive from the implementation of the Prospectus Directive.
2
5.10
Exemptions regulation
Certain transactions may be performed in France without triggering the rules on public offers of securities either because they constitute a private placement (A) or because of the quality of the person who guarantees or issues them (B). Alternatively, other transactions may constitute public offers of securities, but may benefit from an exemption from the obligation to publish a prospectus (B). 75
5.11
Transactions that do not constitute a public offer: private placements
(i) 5.11
Offers above or below certain thresholds9 The following offers do not constitute public offers of securities: where the total consideration is less than 100,000 (or its equivalent in another currency); where the total consideration is more than 100,000 and less than 2.5 million (or its equivalent in another currency) if the shares offered do not represent more than fifty per cent of the share capital of the issuer; where the offer is addressed to investors who acquire securities for a total consideration of at least 50,000 (or its equivalent in another currency) per investor, for each separate transaction; and where the nominal value of each of the securities offered is at least 50,000 (or its equivalent in another currency).
(ii) 5.12
Offers restricted to portfolio managers (gestionnaire de portefeuille) Resorting to advertising, solicitation or a financial intermediary does not constitute a public offer if the offer is restricted to persons providing portfolio management investment services for third parties (personnes fournissant le service dinvestissement de gestion de portefeuille pour compte de tiers).10 Offers restricted to qualified investors The advertisement, solicitation or applying to a financial intermediary does not constitute a public offer if it concerns an offer made to qualified investors. A qualified investor is defined as a person or entity possessing the expertise and facilities required to understand the risks inherent in transactions relating to securities.11 French law provides for a list of persons recognised as qualified investors (to the extent they are acting for their own account).12 This list includes in particular: credit institutions, investment firms, investment companies, collective investment schemes (organismes de placement collectif en valeurs mobilires, fonds communs de crance and socits civiles de placement immobilier); insurance and reinsurance companies and mutual insurance companies; certain public institutions (such as the Trsor Public, the Banque de France, La Poste or the Caisse des Dpts et Consignations and the Caisse damortissement de la dette sociale); and venture capital companies.
(iii) 5.13
5.14
Moreover, following their election and registration on a designated file maintained by the AMF, the following persons may also be recognised, provided that they act for their own account, as qualified investors:13
76
France
5.17
entities fulfilling at least two of the three following criteria: (i) more than 250 employees; (ii) a total balance sheet of more than 43 million; and (iii) a turnover in excess of 50 million; and natural persons fulfilling at least two of the three following criteria: they (i) hold a portfolio of securities of a value exceeding 500,000; (ii) carry out an average of ten transactions per quarter over the last four quarters of a value exceeding 600 per transaction; and (iii) have held for at least one year a professional position in the financial sector requiring a knowledge of investment in securities. (iv) 5.15 Offers restricted to a limited circle of investors The advertisement, solicitation or applying to a financial intermediary does not constitute a public offer if it concerns an offer made to a limited circle of investors, i.e., persons, other than qualified investors, the number of which is less than 100. The exemptions mentioned above from (i) to (iv) are only available in relation to the issue or sale of securities which qualify as a private placement (without any listing), and are not available where the securities are admitted to trading on a regulated market.
Transactions that do not constitute a public offer: the quality of the guarantor or the issuer
5.16
French law excludes from the scope of the public offer rules the issue, the sale, as well as the admission to trading on a regulated market of securities: unconditionally and irrevocably guaranteed or issued by a Member State of the European Economic Area; issued by a public international organisation to which France belongs; issued by the European Central Bank or by a central bank of a Member State of the European Economic Area; or issued by collective investment schemes or real estate collective investment schemes.
Transactions that constitute a public offer but exempted from the obligation to publish a prospectus
5.17
Following the implementation in the AMF General Regulation (Art. 211-3 et seq.) of Article 4 of the Prospectus Directive, certain offers to the public (for example, under certain conditions, the offer of securities allotted or to be allotted in connection with a merger, a demerger or a contribution of assets) or admissions to trading (for example, the admission to trading of shares representing, over a period of twelve months, less than ten per cent of the number of shares of the same class already admitted to trading on the same regulated market) are considered as public offers of securities but benefit from an exemption from the obligation to publish a prospectus. However, for most 77
5.17
exemptions, the AMF General Regulation provides for the publication of an information document the content of which is detailed in its regulation. Whether or not the admission to trading on a French regulated market enjoys a prospectus exemption,14 the issuer shall publish a notice in an official legal gazette (Bulletin des annonces lgales obligatoires (BALO))15 summarising the main characteristics of the operation. However, a recent Decree16 suppressed this publication as from 1 September 2008. In case the issuer is not a French company, it shall file the French translation of its constitutive documents with the Tribunal de Commerce de Paris. This formality shall soon be cancelled too. The exemption to publish a prospectus does not prevent an issuer from complying with the other obligations attached to the listing on a regulated market, including its information requirements.17
3
5.18
No individual exemptions
In accordance with the Prospectus Directive, which only includes generally applicable exceptions and exemptions from the obligation to publish a prospectus, the AMF is not allowed to grant individual exemptions from the prohibition to offer securities or to admit securities to trading on a regulated market without making an approved prospectus available.
4
5.19
Procedure
The AMF shall announce its decision regarding the approval of the prospectus to the applicant within a time limit of ten trading days after having received the application for approval (Art. 212-21 of the AMF General Regulation). This time limit is extended to 20 trading days in case of a first public offer of securities.18 If the documents submitted by the applicant are incomplete, the AMF shall give the applicant the opportunity to supplement the application.
IV 1
5.20

Article 212-7 of the AMF General Regulation provides that the prospectus shall contain all the information which, depending on the particular nature of the issuer and of the relevant financial instruments, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor of the relevant financial instruments, as well as the rights attaching to such financial instruments and the conditions in which the instruments are issued. Thus, the main rule for contents of the prospectus contained in
78
France
5.22
Article 5 of the Prospectus Directive is almost grammatically implemented into national law. In this respect, Article 212-7 of the AMF General Regulation directly refers to the schedules and additional building blocks of the Prospectus Regulation (applicable in France since 1 July 2005), with regards to the form and content of prospectuses, depending on the contemplated financial instrument. On that basis, contents of prospectuses are different whether the company issues shares, asset-backed securities, depository receipts issued over shares, debt securities or derivative securities. The AMF also applies the distinction between retail and wholesale debt issues, which means that requirements are different depending on whether debt securities denomination per unit amounts to more or less than 50,000. Prospectuses specific to certain issuers, notably banks, are also required the same way as in the Prospectus Directive. The AMF General Regulation also specifies that the AMF will take into account CESRs Recommendations relating to the way the Prospectus Regulation should be applied as published in February 2005. In practice, the AMF ensures that prospectuses fully comply with these recommendations, especially regarding financial information and profits or estimates. 5.21 Additionally, Article 212-8 of the AMF General Regulation provides that the prospectus shall include a summary note, except where the application for admission to trading on a regulated market concerns debt securities with a minimum denomination of 50,000 or the foreign currency equivalent. The summary note shall, in a brief manner (i.e., 2,500 words) and in non-technical language, convey the essential characteristics and main risks associated with the issuer, any guarantor and the relevant financial instruments. The summary must also contain a warning to the effect that it should be read as an introduction to the prospectus and any decision to invest in the issuer should be based on consideration of the prospectus as a whole. The warning must contain a statement to the effect that the persons who presented the summary note, including any translation and/or request for notification within the meaning of Article 212-42 of the AMF General Regulation may be only civilly liable where the summary note is misleading, inaccurate or inconsistent when read with other parts of the prospectus. Article 212-11 of the AMF General Regulation provides for the possibility to incorporate information in the prospectus by reference. Reference can only be made to documents published previously or simultaneously with the prospectus which have been filed with or approved by the AMF. Consequently, in accordance with the system of Article 11 of the Prospectus Directive, future information cannot be incorporated by reference.19 It is not allowed to incorporate information by reference in the summary. 79
5.22
5.23
2
5.23
Format
Article 212-9 of the AMF General Regulation provides that a prospectus can be drawn up at the discretion of the issuer, as a single document or as three separate documents. A prospectus consisting of one single document should at least contain the information referred to in Article 2127 of the AMF General Regulation and a summary complying with Article 2128 of the AMF General Regulation. A prospectus consisting of three separate documents should include a base document (document de base) for companies which are contemplating an initial public offering (IPO) , and for companies already listed on a regulated market a registration document (document de rfrence), together with information relating to the issuer , a securities note with information relating to the securities to be offered or admitted to trading and a summary note. Using a prospectus containing three parts may be useful if the issuer intends to make multiple offerings of different types of securities within one year (being the term within which the approval by the competent authority of a registration document remains valid). In practice, many listed companies prepare a registration document each year which either follows the format of the Prospectus Regulation or uses a more friendly annual report format with a reconciliation table. All three parts of such a prospectus need to be approved by the AMF. However, issuers who have had continuously, during three years, their registration document approved by the AMF, are authorised to merely file their registration document which is then thereafter subject to review by the AMF (Art. 212-13, II of the AMF General Regulation). In addition, as far as practicable, a prospectus can validly refer to a previous prospectus (twelve months) (Article 21224 of the AMF General Regulation). If the information relating to the issuer has changed at the time of making the offering, the securities note may update the registration document (Article 21210 of the AMF General Regulation). Article 212-32 of the AMF General Regulation allows issuers to draw-up a base prospectus for debt securities issued within a debt issuance programme, such as a Euro Medium Term Note (EMTN) programme. The AMF approves the base prospectus and the draft final terms of the offering which are completed and published separately and filed with the AMF at the time of each individual offering. To the extent they comply with the terms of the base prospectus and the draft final terms included in the base prospectus, those completed final terms do not need to be approved by the AMF.
3
5.24
Supplements
Article 212-25-I of the AMF General Regulation provides that, in the event of a significant new factor, material mistake or inaccuracy occurring in the
80
France
5.25
period between the approval of the prospectus and the closing of the offer of securities, the issuer or offeror should draw up a document supplementing the prospectus. This supplementary prospectus requires approval by the AMF or the competent regulatory authority of another Member State. If the AMF has previously approved the prospectus, it will also be competent to approve any supplementary prospectus. The AMF should take the decision whether or not to approve the supplementary prospectus within seven trading days after receipt of the document. Subsequently, the supplementary prospectus must be published. Article 212-25-II of the AMF General Regulation provides that any investor who has already agreed to purchase or subscribe for financial instruments before the supplement is published shall have the right, exercisable within a time limit no shorter than two trading days after the publication of the supplement, to withdraw his acceptance.
4
5.25
Language
The appropriate language for offering documents has always been a sensitive issue in France. In December 2000, a ruling of the French Conseil dEtat,20 based on Articles 2 and 4 of law No. 94955 of 4 August 1994 relating to the use of French language, made the use of French language mandatory for prospectuses published in France. However, a law of 20 November 2001 allowed English language documents to be re-introduced into the Paris market, under certain conditions and in certain circumstances. Moreover, the AMF General Regulation provides that, as a matter of principle, prospectuses shall be drafted in the French language, but they can also, in numerous circumstances, be drawn up in a language customary in the sphere of international finance (i.e., English, as construed by the AMF). Circumstances where the prospectus may be drawn-up in English include in particular: (i) offers to the public of non-equity securities whose denomination per unit amounts to at least 1,000; (ii) admissions to trading in France without any offer to the public in France; and (iii) public offerings or admissions to trading in one or many EU or EEA Member States other than France (where France is the home Member State). When prospectuses are drawn up in English, the AMF requires the summary to be translated into the French language, except in the case of (i) the admission to trading of non-equity securities whose denomination per unit amounts to at least 50,000 (i.e., wholesale securities under the Prospectus Directive), since no summary is required for that kind of transaction (Art. 5.2 Dir.); or (ii) when France is the home Member State and neither an offer to the public nor an admission to trading is sought in France. Furthermore, the AMF has accepted, on the professional investors market segment of the French regulated market which was put in place on December 81
5.25
2007, the use of the English language for the listing prospectus including the summary for any type of securities offering including equity offerings. This segment is eligible for issuers applying to admit their financial instruments to trading on such market without a public offering. It should be pointed out that when a prospectus of equity securities is passported to the AMF, a French summary is required, except if the passporting relates to a listing on the professional investors market segment.
V 1
5.26

The publication requirements mirror very closely those proposed by the Prospectus Directive (Art. 14). The prospectus is required to be made available to the public through one of the following means: (i) by insertion in at least one national newspaper or in a newspaper widely circulated in France; or (ii) by being made available in printed form free of charge at the registered office of the issuer or of the market operator on which the securities are being admitted to trading and of the financial intermediaries placing or selling the securities, including paying agents; or (iii) in electronic form on the issuers website and, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents; or (iv) in electronic form on the website of the regulated market where the admission to trading is being sought.
5.27
In all cases, a copy must be sent to the AMF for publication on its website. The twelve-month time limit suggested in the Prospectus Directive has not been introduced in France. Historically, the AMF has left prospectuses on its website for longer periods and intends to retain the flexibility to do so. Where publication is made in accordance with (i) or (ii) above, the issuer is also required to publish the prospectus on its website. Such information must remain available on the internet website for at least a five-year period and the information be easily accessible to any investor (e.g., any investor must be able to find the issuers financial information starting his research from google). Where publication is made under one of the means mentioned from (ii) to (iv) above, the issuer must publish either the summary of the prospectus in a newspaper (as in (i) above) or publish a notice indicating how the prospectus is being made available. Finally, where a prospectus is made available in electronic form under one of the means mentioned in (iii) or (iv) above, a paper copy must be delivered free of charge to any person upon his request.
82
France
5.31
2
5.28
Advertisements relating to an offer of securities to the public

There is a general prohibition to disclose information relating to a potential offer of securities to the public or listing on a regulated market until the AMF has granted its approval (visa) on the prospectus. This prohibition does not apply to institutional advertising in France (i.e., advertising designed to promote a companys brand, image or activities). The AMF has indeed ruled that it is not restricted as long as it contains no indication or discussion of a placement or subscription of securities, nor any suggestion that it is contemplating a placement of securities. Accordingly, institutional advertising in France is unrestricted as long as its objective is not to solicit or encourage the subscription or acquisition of securities. Thus, a routine communication based solely on the activity and financial results of the company and released in the ordinary course of business do not raise any problem as long as it is carried out in a manner compliant with past practice. After the approval is granted, the release of such information relating to an offer of securities to the public or listing is authorised under certain conditions. Articles 212-28 through 212-30 of the AMF General Regulation, implementing Article 15 of the Prospectus Directive, provides for certain rules with respect to advertisements relating to an offer of securities to the public or admission of securities to trading on a regulated market. An advertisement should be recognisable as such and the information contained in the advertisement should be consistent with the information included in the prospectus. Articles 212-28 of the AMF General Regulation provides that any advertisement, regardless of its form and method of dissemination, that relates to a public offering of financial instruments shall be communicated to the AMF before being disseminated. The above advertisements shall state that a prospectus has been or will be published and indicate where investors are or will be able to obtain it. They must be clearly recognisable as advertisements and contain no false or misleading statements. The information contained must be consistent with the information in the prospectus, if already published, or with information required to be in the prospectus, if the prospectus is published afterwards. A notice shall alert the public of the section of the prospectus dealing with risk factors and, where applicable, and at the request of the AMF, the advertisements must contain a warning about certain exceptional characteristics of the issuer, its guarantors, if any, or the relevant financial instruments. Article 212-29 of the AMF General Regulation states that all information about a public offering of financial instruments that is disclosed in oral or written form shall be consistent with the information given in the prospectus. 83
5.29
5.30
5.31
5.32
5.32
Where no prospectus is required, material information provided by an issuer and addressed to qualified investors, or to special categories of investors, including information disclosed in the context of meetings relating to the sale or the issue of securities, shall be disclosed to all qualified investors or special categories of investors to whom the transaction is addressed. Where a prospectus is required to be published, such information shall be included in the prospectus or in a supplement to the prospectus in accordance with Article 212-25 of the AMF General Regulation.
VI 1
5.33
Sanctions Right of the AMF to suspend and prohibit a transaction

The AMF can suspend the transaction, for no more than ten consecutive trading days each time that it has reasonable grounds to suspect that the transaction infringes its applicable laws and regulations. The AMF may order a prohibition of the transaction: each time that it has reasonable grounds to suspect that an issue or a sale infringes its applicable laws and regulations; and each time that it states that an admission to trading on a regulated market infringes its applicable laws and regulations. Moreover, the market regulator shall inform the AMF prior to any admission of any security to trading.
Right of the AMF to control prospectuses approved by a foreign supervisory authority when irregularities were committed in connection with a public offering made in France
When the AMF is not the authority responsible for approving the prospectus and it establishes that irregularities were committed in connection with a public offering made in France by the person carrying out the transaction or the institutions responsible for its distribution, it shall inform the supervisory authority of the European Economic Area Member State which approved that prospectus of such irregularities. If, despite the measures taken by that authority or on account of their inadequacy, the issuer or the institutions responsible for distribution of the prospectus continue to violate the laws or regulations applicable thereto, the AMF may, having informed the supervisory authority and approved the document, take all necessary measures to protect the investors. The AMF shall inform the European Commission of such measures as soon as possible.
5.34
84
France
5.36
VII
5.35
The Prospectus Directive clearly limits the liability for the information included in the prospectus to the issuer. The prospectus shall indeed contain a statement made by the persons responsible within the issuer to the effect that, after taking all reasonable measures for this purpose and to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that there is no material omission in that respect. This statement is slightly different if the prospectus is used as a financial report since the European Directive 2004/109/CE of 15 December 2004, known as the Transparency Directive, provides that the annual financial report shall comprise a statement made by the persons responsible within the issuer relating to the true and fair view of the financial statements,21 which is added to the standard liability statement mentioned above. However, as in the past, the AMF General Regulation requires a comfort from the listing sponsor(s) to the AMF and from the statutory auditors to the issuer. Regarding the auditors, the AMF no longer requires a statement in the prospectus but only a comfort letter to which the issuer refers in its statement included in the prospectus. Consequently, the scope of the responsibility of the statutory auditors remains basically unchanged. In this comfort letter, the statutory auditors: (i) inform the issuer about the reports appearing in the prospectus and, where such is the case, the updates or corrections thereto; (ii) state that they reviewed the financial information and the financial statements contained in the prospectus, completed an overall reading of the prospectus and proceeded any specific verifications in accordance with the professional standards; and (iii) indicate, if any, their observations. As in past practice, the listing sponsors keep on delivering to the AMF a letter by which they confirm that they have conducted professional due diligence and found no inaccuracies or material omissions likely to mislead investors or affect their judgement in a material respect. Those supplementary requirements from the statutory auditors and the listing sponsors which are not in the Prospectus Directive nor in the Prospectus Regulation have been waived by the AMF for listing on the segment professional investors market.
VIII
5.36
Conclusion
The implementation of the Prospectus Directive has not substantially changed the legal regime applicable to securities offerings in France from former French law requirements. Compliance with the requirements as to the content of prospectuses is not substantially more onerous than under the former regime. The
85
5.36
only new requirements are the publication of key figures and selected financial information, as well as the disclosure on material contracts (that were not entered into in the ordinary course of the issuers business). Nevertheless, this does not represent an important change for issuers and their counsel who are already familiar with such requirements as in practice such information was already disclosed in equity transactions. Other new requirements under the Prospectus Directive regarding the information on legal and arbitration proceedings, any potential significant change in the issuers financial and trading position since the end of the last audited financial period and any administrative, management and supervisory bodies potential conflicts of interests were already commonly applied on the French market. The regime applicable to prospectuses in France after the implementation of the Prospectus Directive shows many similarities with the former French regime and the clear and flexible approach of the AMF has indeed enabled a smooth transition for French market participants. The French legislation on public offerings and admission to trading on regulated market is now very close to the European body of rules, even though some differences remain such as the definition of the offer of securities to the public and supplementary requirements from the AMF from the statutory auditors and listing sponsors. However, France is currently undertaking a reform to adjust its definition of an offer of securities to the public on the European definition, and the AMF has recently created the segment professional investors market which enjoys lighter disclosure requirements including the exemption for statutory auditors and listing sponsors to deliver a due diligence statement.
Notes
1. The AMF was established by the Financial Security Act of 1 August 2003. It was formed from the merger of the Commission des oprations de bourse (COB), the Conseil des marchs financiers (CMF) and the Conseil de discipline de la gestion financire (CDGF). The objective of this merger was to improve the efficiency of Frances financial regulatory system and to give it greater visibility. 2. Law Nos. 2005842 of 26 July 2005 for the confidence and modernisation of the economy. 3. Decrees Nos. 20051006 and No. 20051007 dated 2 August 2005, the objective of which were the codification of several decrees in the Monetary and Financial Code. 4. Decree Nos. 2006557 dated 16 May 2006. 5. Decree Nos. 98880 dated 1 October 1998. 6. Upon the proposition of the AMF, the Ministre charg de lEconomie decides which markets shall be considered as regulated markets in France. Euronext Paris is the sole regulated market in France (Article L. 421-4 of the Monetary and Financial Code and ministerial order No. 2007544 dated 12 April 2007).
86
France
5.36
7. Solicitation for banking or financial services in France is governed by Article L. 341-1 et seq. of the Monetary and Financial Code and it may be forbidden for certain products (such as notes indexed on funds that have not been authorised in France or notes for which the risk of loss is greater than the amount of the initial financial contribution). 8. The certificate of approval declares that the prospectus has been drawn up in accordance with the Prospectus Directive. 9. Art. L. 411-2-II-1 et seq. of the Monetary and Financial Code as supplemented by Art. 211-2 of the AMF General Regulation. 10. Article L. 411-2-II, 4, a, of the Monetary and Financial Code. 11. Article L. 411-2-II, 4, b. 12. Article D. 411-1, I, of the Monetary and Financial Code. 13. Article D.411-1, II, of the Monetary and Financial Code. 14. Notwithstanding any additional publications required by corporate law. 15. Art. 3 of Law dated 30 January 1907. 16. Decree No. 2008258 dated 13 March 2008, published on 15 March 2008. 17. As provided for in the AMF General Regulation Book II, Title II, Periodic and Ongoing Disclosure Obligations. 18. Article 212-22 of the AMF General Regulation. 19. It should be noted that the possibility of incorporating future information could increase the flexibility of making securities offerings under offering programmes, as is allowed under the US shelf registration system, which permits the incorporation of information contained in future filings with the SEC in advance by reference thereto in the prospectus. 20. Arrt Gniteau. 21. Article 4(2)(c) of the Transparency Directive provides that the annual financial report shall comprise a statement made by the persons responsible within the issuer to the effect that, to the best of their knowledge, the financial statements prepared in accordance with the applicable set of accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer and the undertakings included in the consolidation taken as a whole and that the management report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
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6 Germany
Dr A n dr e a s W s t hof f a n d B or i s K l sen e r
SJ Berwin LLP
Introduction 88 Competent authority 89 Prior approval and appeal procedures 90 1 Procedure 90 2 Exemptions 91 IV Content and format, supplements and language of the prospectus 92 1 Content 92 2 Format 93 3 Supplements 94 4 Language 94 V Publication and advertisements 95 1 Method of publication 95 2 Advertisements 96 VI Use of a prospectus approved in other (non-EU and non-EEA) countries 97 VII Sanctions 97 VIII Prospectus liability 98 IX Rules applicable to transactions and securities not subject to the Directive and Regulation 98 X Conclusion 99
I II III
I
6.1
Introduction
In Germany, the Prospectus Directive has been implemented by the Prospectus Directive Implementation Act of 22 June 2005, which introduced the Securities Prospectus Act1 (the Prospectus Act) and amended a number of existing laws, including the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz) and the Stock Exchange Act (Brsengesetz). The Prospectus Act entered into force on 1 July 2005 .2 Prior to implementation of the Prospectus Directive, the public offering of securities was regulated by the Securities Sales Prospectus Act and the Securities Sales Prospectus Ordinance (Wertpapier-Verkaufsprospektverordnung), which
6.2
88
Germany
6.5
applied to public offerings, as well as by the Stock Exchange Act and the Stock Exchange Admission Ordinance (Brsenzulassungsverordnung), which applied to admissions to trading of securities on a regulated market, setting out different rules for sales prospectuses and listing prospectuses. Additionally, the Frankfurt Stock Exchange had issued its (non-mandatory) Going Public Principles, which set forth the German market standard for the layout as well as the structure for prospectuses relating to shares or share certificates. Abolishing the Securities Sales Prospectus Ordinance and significantly reducing the scope of the Securities Sales Prospectus Act and the Stock Exchange Act as well as of the Stock Exchange Admission Ordinance, the Prospectus Directive Implementation Act concentrated the legal framework for all securities prospectuses in the Prospectus Act. Consequently, the Frankfurt Stock Exchange suspended its Going Public Principles as of the date the Prospectus Act came into effect. 6.3 The Prospectus Act applies to all prospectuses for securities (as defined in Article 2(1)(a) of the Prospectus Directive) to be offered publicly or to be admitted to trading on a regulated market. The public offering of any other securities is regulated outside the Prospectus Act, namely in the Securities Sales Prospectus Act and in the Investment Act (Investmentgesetz), as described in no. 23 of this chapter .
II
6.4
Competent authority
The competent authority for the approval of prospectuses in Germany is the Federal Financial Supervisory Authority (Bundesanstalt fr Finanzdienstleistungsaufsicht, BaFin). Subject to the non-applicability of the Prospectus Act to certain kinds of investment instruments (Art. 1(2) Prospectus Act) and to the exemptions for certain kinds of securities (Art. 4 Prospectus Act), the BaFin is generally competent for: (i) the approval of a prospectus with regard to a public offering of securities in Germany;3 (ii) the approval of a prospectus with regard to the admission to trading of securities on a regulated market in Germany;4 (iii) the approval of a prospectus with regard to a public offering of securities in another European Economic Area Member State if Germany is the home Member State; (iv) the approval of a prospectus with regard to the admission to trading of securities on a regulated market in another European Economic Area Member State if Germany is the home Member State.
6.5
Although the Prospectus Act does not explicitly mention the competence of the BaFin for prospectuses for public offerings or admissions to trading 89
6.5
outside of Germany, it is commonly agreed that Article 13 of the Prospectus Act, which sets forth the competence of the BaFin for the approval of prospectuses in general, is to be read in connection with Article 2, No. 13, of the Prospectus Act, which contains the definition of the home Member State. A supporting argument for this understanding can be found in Article 13(1) of the Prospectus Directive, which clearly states that the competent authority of the home Member State is responsible for the approval of prospectuses. The Prospectus Act also does not contain an explicit provision regarding the possibility to transfer the competence for the approval of a prospectus to the competent authority of another Member State, as stated in Article 13(5) of the Prospectus Directive. It is unclear whether the German legislature meant to exclude such transfer, despite Article 13(5) being a mandatory provision of the Prospectus Directive, or whether it just did not consider it necessary to include a respective provision in the Prospectus Act, so that the BaFin would nonetheless be able to transfer the competence for the approval of a prospectus to another competent authority (and to accept such transfers from another authority). If an issuer is faced with a situation where there are one or more other competent authorities besides the BaFin, it should therefore approach the BaFin and the other authorities as early as possible before the submission of the prospectus in order to bring about an agreement on the competence for the approval .
III 1
6.6
Prior approval and appeal procedures Procedure

A public offering of securities in Germany or an admission to trading of securities on a regulated market in Germany may only take place upon the publishing of a prospectus that has been approved by the BaFin prior to publication.5 The draft prospectus to be filed with the BaFin has to be accompanied by a cross-reference list if its structure does not entirely conform to the structure of the relevant appendix of the Prospectus Regulation. It also has to be accompanied by a formal written application for the approval of the prospectus. The draft prospectus has to be filed in print or through the BaFins electronic filing facility (reporting and publishing platform, MVP). A filing by advance fax is also possible if the original documents are subsequently filed in print without delay. If the prospectus incorporates other documents by reference, those documents also have to be filed together with the draft . Even if the draft prospectus was filed through the MVP, the final approved document has to be submitted in print, signed by all applicants . The BaFin reviews the draft prospectus for completeness, comprehensibility and coherence; however, it does not verify factual information. It has to inform the applicant within ten working days (including Saturdays) of the submission of the required documents about whether its review has shown
90
Germany
6.8
any deficiencies regarding completeness, comprehensibility or coherence (Art. 13(1) and (3) Prospectus Act). If the offered securities are not yet admitted to trading on a regulated market of another European Economic Area Member State and the issuer has never before offered its securities to the public, the BaFin has to decide within a period of twenty working days from the submission of the draft whether or not to approve the prospectus. In any other case of an offering prospectus or in the case of a prospectus for the admission to trading on a regulated market, the review period is ten working days. However, if the BaFin has advised the applicant of any deficiencies of the draft prospectus (see above), the respective review period starts over. It should be noted that the BaFin generally only takes advantage of this extension of the review period to the full extent in extraordinary cases and usually attempts to make it possible for the applicant to achieve the approval within the intended period of time. In the case of a typical prospectus for shares, it can be expected that the review period (either ten or twenty working days) is exceeded by about ten working days in total due to deficiencies of the draft prospectus that have surfaced during the review process. If the BaFin does not inform the applicant of its decision on the approval of the prospectus within the given period, the prospectus is neither deemed to have been approved nor rejected. The applicant would consequently have to bring a court action against the BaFin to approve the prospectus. However, such a case is apparently unprecedented . If the prospectus makes reference to the approval by the BaFin (which is typically the case in the timetable for the offering/admission to trading), the BaFin usually requires the prospectus to expressly state that the review carried out by the BaFin in the course of the approval process is limited to completeness, comprehensibility or coherence and does not involve any factual review .
2
6.7
Exemptions
The various exemptions to the obligation to publish a prospectus as specified in Article 4(1) and (2) of the Prospectus Directive6 for both public offerings as well as admissions to trading are fully mirrored in Article 4(1) and (2) of the Prospectus Act, respectively. As the Prospectus Act does not stipulate an authority of the BaFin to assess whether an exemption pursuant to Article 4(2) applies in the case of an admission to trading, this decision lies with the executive board of the respective stock exchange, which has to assess in the course of the admission process whether the Prospectus Act applies to the relevant securities at all and, if so, whether an exemption pursuant to Article 4(2) of the Prospectus Act applies. This represents a significant exception to the general principle of the Prospectus Act to concentrate the authority for all matters concerning prospectuses for securities at the level of the BaFin. In the case of the exemptions pursuant to Article 4(2), Nos. 3 and 4, of the Prospectus Act (which correspond to Article 4(2)(c) and (d) of the Prospectus Directive), the executive board of 91
6.8
6.8
the respective stock exchange is even responsible for the assessment of whether or not a submitted document contains information that is equivalent to a prospectus. In other words, the executive board of the stock exchange has to conduct the same review of the document as the BaFin would do in the case of a regular prospectus .
IV 1
6.9
Content and format, supplements and language of the prospectus Content

The provisions of the Prospectus Act regarding the content of the prospectus conform almost literally to the respective provisions of the Prospectus Directive.7 Article 5(1) of the Prospectus Act stipulates that the prospectus shall contain, in an easily analysable and comprehensible form, such information with regard to the issuer and the securities offered to the public or admitted to trading on a regulated market that is necessary to allow the public to make an appropriate assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities, and that it shall in particular contain information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market. The last sentence of Article 5(1) stresses that the prospectus shall be drafted in a way that facilitates its comprehension and analysis. While this statement essentially repeats the descriptive phrase at the beginning of the provision, it shows that the German legislature has given particular emphasis to the importance of the topic. Regarding the minimum information to be provided in the prospectus, the Prospectus Act directly refers to the Prospectus Regulation (Art. 7 Prospectus Act). As set forth in the corresponding provision of the Prospectus Directive (Art. 8(2)), Article 8(2) of the Prospectus Act allows for the authorisation by the BaFin to omit certain information from the prospectus that would otherwise be required pursuant to the Prospectus Act or the Prospectus Regulation. This authorisation may be given in the event that (i) disclosure of such information would be contrary to the public interest; or (ii) disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer, offeror, guarantor and the securities to which the prospectus relates; or (iii) such information is of minor importance for a specific offering or a specific admission to trading on a regulated market and is not such as will influence the assessment of the financial position and prospects of the issuer, offeror or guarantor. However, the BaFin is bound to actually give such an authorisation only under extraordinary circumstances .8
92
Germany
6.11
Furthermore, the BaFin may permit to include equivalent information if certain information that would otherwise be required pursuant to the Prospectus Act or the Prospectus Regulation is inappropriate to the issuers sphere of activity or to the legal form of the issuer or to the securities to which the prospectus relates (Art. 8(3) Prospectus Act and Art. 8(3) Dir.). Although the provision does not elaborate on whether or not to include an explicit statement if equivalent information does not exist, the BaFin routinely requires the prospectus to contain negative affirmations in such cases . 6.10 The prospectus does not need to state the final offer price (nor a price range) and the number of offered securities, provided that it does state the maximum number of offered securities and the criteria or the conditions in accordance with which the final offer price and the number of offered securities will be determined (as in the case of a so-called decoupled bookbuilding) (Art. 8(1) Prospectus Act and Art. 8(1) Dir.). As soon as the price range is determined, it has to be published in the form of a supplement to the prospectus (see no. 12 of this chapter). If, in the case of a decoupled bookbuilding, the final offer price is only determined after the end of the offering period, it has to be published in accordance with general publication requirements for price-sensitive information, but not in the form of a supplement, as the obligation to publish a supplement only applies until the end of the offering period. For a brief period in 2006, the BaFin went so far as to allow issuers to even omit the maximum number of offered securities from the published prospectus (enhanced decoupled bookbuilding ). However, currently, decoupled bookbuilding is only allowed in a more restricted manner. Issuers are required to state both the maximum number of offered securities and that the final number will be decided by resolution of the issuers shareholders (modified enhanced decoupled bookbuilding). As is the case with all supplements to the prospectus, shareholders may withdraw their acceptance of the offering or subscription within a period of two working days after the publication of the supplement (i.e., in this case of the final offer price) . Information may also be incorporated into the prospectus by reference (Art. 11 Prospectus Act and Art. 11 Dir.) (see no. 40 of Chapter 1, vol. I, of this book), for which specific approval by the BaFin is not required .
2
6.11
Format
A prospectus may be drawn up either in the form of a single document or as several separate documents consisting of a registration document, a securities note and a summary note (Art. 12 Prospectus Act and Art. 12 Dir.). In the latter case, the registration document shall contain information relating to the issuer and the securities note shall contain information relating to the securities to be offered or admitted to trading . Based on the requirement that the summary shall be drawn up in a brief and generally understandable manner (Art. 5(2) Prospectus Act), the BaFin 93
6.11
does not permit any cross references to be used in the summary, and it disencourages the use of definitions. Alternatively, in the case of certain types of non-equity securities, a base prospectus may be published in the form of a single document (Art. 6 Prospectus Act and Art. 5(4) Dir.). The main advantage of a base prospectus is that the issuer or offeror may omit the final terms of the offering from the prospectus and does not have to publish such final terms until the first day of the offering (or, in certain cases, even later). Unlike in the case of a decoupled offering (see no. 10 of this chapter), the determination of the final terms of the offering is as such not regarded as information to be published as a supplement to the prospectus, and their publication does therefore not require prior approval by the BaFin .
3
6.12
Supplements
The Prospectus Act has implemented the provisions on supplements to the prospectus as set forth by the Prospectus Directive (Art. 16 Prospectus Act and Art. 16 Dir.), requiring the publication of any significant new circumstance or material inaccuracy relating to the information included in the prospectus that could affect the assessment of the securities and that arises or is noted in the period between the approval of the prospectus and the closing of the offering or the beginning of trading. The summary (and any translations thereof) must also be supplemented. Prior to publication, the draft supplement has to be filed for approval by the BaFin, which has to decide on the approval within a period of seven working days. However, the BaFin generally attempts to approve the supplement within a significantly shorter period of time. As provided for by the Prospectus Directive, investors have the right to withdraw their acceptances within a period of two working days following the publication of the supplement. The Prospectus Act furthermore stipulates that the acceptance can only be withdrawn if the respective purchase orders have not yet been fulfilled. It also states an obligation to prominently place a special notice in the supplement informing about the right of withdrawal .
4
6.13
Language
In the case of a public offering of securities in Germany or an admission to trading of securities on a regulated market in Germany, the language of the prospectus (and the supplements, if any) must be German if the issuers home Member State is Germany. The Prospectus Act (Art. 19) only provides for a right to publish the prospectus in another language customary in the sphere of international finance (i.e., in English) if a public offering or admission to trading takes place in another Member State of the European Economic Area. This is also the case if a public offering or admission to
94
Germany
6.14
trading takes place in Germany at the same time, in which case an additional summary has to be drawn up in the German language. Although the Prospectus Act provides for the discretion of the BaFin to permit the publication of a non-German language prospectus even in the case where there is no public offering or admission to trading outside of Germany, the BaFin is bound to exercise its discretion in a very restrictive way,9 which it has actually done in the past, despite a continued strong interest of issuers and underwriters in using English language prospectuses. Issuers wishing to publish a prospectus for a public offering in Germany in the English language therefore usually resort to a parallel public offering in another Member State of the European Economic Area, taking advantage of the passporting regime .
V 1
6.14

The approved prospectus shall be made available to the public at the latest one working day prior to the beginning of the offering to the public or the admission to trading. In the case of an initial public offering of a class of shares not already admitted to trading on a regulated market that is to be admitted to trading for the first time, the offering may not end sooner than six working days after the publication of the prospectus .10 The prospectus has to be published in either of the following ways: (i) by insertion in one or more newspapers circulated throughout, or widely circulated in, the Member States in which the offering to the public is made or the admission to trading is sought; or (ii) in a printed form to be made available, free of charge, to the public at the offices of the market on which the securities are being admitted to trading, or at the registered office of the issuer or at the offices of the financial intermediaries placing or selling the securities, including paying agents; or (iii) in an electronic form on the issuers website or, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents; or (iv) in an electronic form on the website of the regulated market where the admission to trading is sought. If the prospectus is published on the issuers website, printed copies must be made available to the public upon demand and free of charge. Advertisements for a public offering must include a notice stating where copies of the prospectus may be obtained free of charge. This is usually done by providing a link to the issuers website on which the prospectus is published as well as the fax numbers of the financial intermediaries where the prospectus can be obtained in print . 95
6.14
The prospectus, the base prospectus and the registration document, as may be the case, are valid for a public offering or an application for admission to trading for a period of twelve months following their publication, provided they are updated or supplemented as required .
2
6.15
Advertisements
The German legislature has implemented the provisions of the Prospectus Directive regarding advertisements into the Prospectus Act in a literal sense. Prior to this implementation, the relationship between a prospectus and information regarding the offering being disseminated outside of the prospectus was not regulated. Under the new regime, any type of advertisement relating to an offering of securities to the public or to an admission to trading is subject to the requirements set forth in Article 15 of the Prospectus Act. Compliance with such requirements is supervised by the BaFin; its supervision being restricted to the German territory.11 If the public offering or the admission to trading is subject to the prospectus requirement pursuant to the Prospectus Act, any advertisement must comply with the following requirements: (i) the advertisement shall state that a prospectus has been or will be published and where investors can obtain it; (ii) the advertisement must be clearly recognisable as such; (iii) the information contained in the advertisement shall not be inaccurate and/or misleading; and (iv) the information shall be consistent with the information contained in the prospectus. In accordance with the Prospectus Directive, the Prospectus Act stipulates two general principles with respect to advertisements. First, all information concerning the offering to the public or the admission to trading on a regulated market disclosed in oral or written form, even if not for advertising purposes, shall be consistent with that contained in the prospectus. Second, material information regarding the issuer or the offeror directed to qualified investors or special categories of investors shall be included in the prospectus or in a supplement to the prospectus. If no prospectus is required under the Prospectus Act, such material information must be disclosed to all qualified investors or special categories of investors to whom the offer is exclusively addressed. Details regarding the circulation of advertisements are set forth in the Prospectus Regulation (see Annex II to this book). If the BaFin becomes aware of an infringement of the requirements applying to advertisements pursuant to the Prospectus Act, it can suspend advertisements for up to ten consecutive days. This suspension period includes Sundays and public holidays.12 According to the Prospectus Act, an approval of advertisements by the BaFin prior to their circulation is not required. The BaFin can prohibit advertisements that could be misleading with respect to the extent of the review and approval of a prospectus by the BaFin .
6.16
6.17
96
Germany
6.20
VI
6.18

In line with the Prospectus Directive, the Prospectus Act stipulates that the BaFin can approve a prospectus drawn up by an issuer in accordance with the applicable laws of a state that is not a Member State of the European Economic Area for an offering of securities to the public or for admission to trading, if (i) the prospectus has been drawn up in accordance with international standards set by international securities supervision bodies, including the standards set by the International Organisation of Securities Commissions (IOSCO) and (ii) the information requirements, also with respect to financial information, are equivalent to the requirements pursuant to the Prospectus Act (Art. 20 Prospectus Act). The Prospectus Act furthermore provides for the Federal Ministry of Finance to issue a regulation setting forth how to determine whether or not such information requirements are in fact equivalent; however, such a regulation has not been issued so far. With respect to the possibility of using a prospectus approved in another Member State of the European Economic Area in Germany, the German legislature has implemented the Prospectus Directive in Articles 1719 of the Prospectus Act. Such a prospectus does not require BaFin approval if the BaFin is notified of the approval by the competent authority of the other Member State and if a German translation of the summary is included in the prospectus .
VII
6.19
Sanctions
The powers of the BaFin listed in Article 21 of the Prospectus Act do not fully correspond to the powers set forth in Article 21(3) and (4) of the Prospectus Directive. The powers relating to the trading of securities on a regulated market pursuant to Articles 21(3)(g) and (h) and 21(4) of the Prospectus Directive, such as suspension and prohibition of trading, are not granted to the BaFin by virtue of the Prospectus Act. The reason for this can be seen in the particularities of the structure and supervision of the German stock exchanges. The powers that are equivalent to the powers mentioned in Articles 21(3)(g) and (h) and 21(4) of the Prospectus Directive are already contained in the German Stock Exchange Act.13 But, according to the German Stock Exchange Act, the executive board of the stock exchange and not the BaFin is authorised to suspend or prohibit trading and to stipulate post-admission information disclosure requirements. It is questionable if such division of powers between the BaFin and the stock exchanges is in line with the Prospectus Directive, which requires that each Member State designates a central competent administrative authority responsible for carrying the obligations provided for in the Prospectus Directive . In the event of a violation of any provision of the Prospectus Act, the BaFin can impose an administrative fine ranging from 50,000 to 500,000. The Prospectus Act does not, however, provide for criminal sanctions . 97
6.20
6.21
VIII
6.21
The liability for a prospectus is not regulated in the Prospectus Act, but in the Stock Exchange Act.14 With respect to prospectuses for the admission of securities to trading on a regulated market, the provisions on prospectus liability stipulated in the Stock Exchange Act apply directly. With respect to prospectuses for a public offering of securities, the provisions on prospectus liability stipulated in the Stock Exchange Act apply indirectly, through a cross reference stipulated in Article 13 of the Securities Sales Prospectus Act, although otherwise this Act only applies to offers of securities not represented by securities within the meaning of the Prospectus Act (e.g., units in closed ended funds) .15 According to the Prospectus Act, the prospectus must state the names and functions of the persons assuming responsibility for the prospectus; in the case of legal entities the prospectus must state their respective names and corporate seats. In addition, the prospectus must contain declarations by the persons assuming responsibility for the prospectus that, according to their knowledge, the information contained in the prospectus is correct and that no material information is omitted . The Prospectus Act requires the financial intermediaries that, together with the issuer, apply for admission to trading, to also assume responsibility for the prospectus . The persons assuming responsibility for the prospectus, as well as the persons that are to be regarded as the originators of the prospectus,16 are jointly liable to investors who have acquired securities on the basis of a prospectus containing incorrect or incomplete information of a material nature . Such investors can demand the re-purchase of the secur ities they have acquired within six months following the admission to trading or the offering against payment of the acquisition price plus customary expenses, unless the persons responsible for the prospectus can prove that the investors did not acquire the securities on the basis of the prospectus. A prospectus liability claim cannot be based solely on the summary or a translation thereof, unless the summary is misleading, inaccurate or inconsistent when read together with other parts of the prospectus .
6.22
IX
6.23
The Prospectus Act only deals with the subject matter of the Prospectus Directive. Prospectus requirements applying to investment instruments other than securities within the meaning of the Prospectus Act are regulated in other Acts. The Securities Sales Prospectus Act stipulates a prospectus requirement for shares granting the investor a participation in a companys profits, for shares in assets held or managed by the issuer or a third party on its own behalf for the account of a third party (trust assets), or for units in other closed-ended funds that are offered to the public and that are not represented
98
Germany
6.24
by securities within the meaning of the Prospectus Act. According to the Investment Act, a prospectus is required for investment funds offered by an investment company .
X
6.24
Conclusion
The German legislature closely followed, to a large extent, the wording (and even the structure) of the Prospectus Directive when implementing the Prospectus Directive. However, Germany has not fully complied with the requirement to designate a central competent administrative authority responsible for carrying out the obligations provided for in the Prospectus Directive. Some of the powers, which must according to the Prospectus Directive be granted to the central competent administrative authority (being the BaFin for Germany), are vested with the executive board of the respective stock exchange and not with the BaFin, such as the authority to assess whether or not an exemption applies regarding the obligation to publish a prospectus for the admission to trading of securities on a regulated market (see no. 8 of this chapter) as well as the authority to impose certain sanctions for violations of the Prospectus Act (see no. 19 of this chapter) .
Notes
1. Gesetz ber die Erstellung, Billigung und Verffentlichung des Prospekts, der beim ffentlichen Angebot von Wertpapieren oder bei der Zulassung von Wertpapieren zum Handel an einem organisierten Markt zu verffentlichen ist (Wertpapierprospektgesetz). 2. Art. 4 (3), 20(3), 27(5) and 28(2) already entered into force on 28 June 2005. 3. Art. 3(1) in connection with Art. 13 Prospectus Act. 4. Section 3(3) in connection with section 13 Prospectus Act. 5. Art. 3(1) and (3) in connection with Art. 13 Prospectus Act. 6. See nos. 13 and 15 of Chapter 1, vol. I, of this book. 7. Article 5(1) Prospectus Act corresponds to Article 5(1) together with the first sentence of Article 5(2) Dir. 8. Governments statement of reasons (Regierungsbegrndung) concerning the Prospectus Directive Implementation Act, Parliamentary Paper (Bundestagsdrucksache) 15/4999, p. 33. 9. Governments statement of reasons (Regierungsbegrndung) the Prospectus Directive Implementation Act, Parliamentary Paper (Bundestagsdrucksache) 15/4999, p. 37. 10. Art. 14 Prospectus Act and Art. 14 Dir. All prospectuses approved by the BaFin are also available in PDF format on the BaFins website. 11. Governments statement of reasons (Regierungsbegrndung) concerning the Prospectus Directive Implementation Act, Parliamentary Paper (Bundestagsdrucksache) 15/4999, p. 36.
99
6.24
12. Governments statement of reasons (Regierungsbegrndung) concerning the Prospectus Directive Implementation Act, Parliamentary Paper (Bundestagsdrucksache) 15/4999, p. 36. 13. This explanation is stated in the Governments statement of reasons (Regierungsbegrndung) concerning the Prospectus Directive Implementation Act, Parliamentary Paper (Bundestagsdrucksache) 15/4999, p. 39. 14. Arts. 447 Stock Exchange Act (Brsengesetz). 15. It would have been more obvious to include such cross-reference in the Prospectus Act, but the German legislature decided on a different approach. 16. Art. 44(1), sentence 1, No. 2 Stock Exchange Act (Brsengesetz) this provision covers persons with a personal economic interest in the securities offer, such as the parent company or a major shareholder who intends to sell his shares.
100
7 Ireland
M ic h a e l A. Gr e en e a n d C i a n Mc c ou rt
A&L Goodbody
Introduction 101 The competent authority 102 Prior approval procedure and appeal 102 1 Approval 102 2 Meaning of offer to the public 104 3 Obligation to publish a prospectus 104 4 Exemptions from the prospectus requirement 105 IV Content, responsibility, language and supplements 106 1 General content requirements 106 2 Responsibility 106 3 Format 107 4 Detailed requirements 108 5 Prospectus supplements 108 6 Language 108 V Publication and advertisements 109 1 Publication method 109 2 Advertisements 109 VI Use of prospectuses approved in non-EU and non-EEA countries VII Sanctions 110 VIII Prospectus liability 111 IX Listing rules 111 X Private companies 111
I II III
110
I
7.1
Introduction
Prior to the implementation of the Prospectus Directive in Ireland, the regime with regard to the publication of prospectuses and offers of shares to the public was convoluted, inconsistent and at times inadequate with conflicting domestic and European legislation. The implementation of the Prospectus Directive has brought far greater certainty to the legal framework in respect of an offer of shares to the public. 101
7.1
The Prospectus Directive, and the existing prospectus regime in Ireland, was implemented into Irish law by: (i) the Investment Funds, Companies and Miscellaneous Provisions Act 2005 (the 2005 Act) which made amendments to the Irish Companies Acts and provided for the implementation of the Prospectus Directive by statutory instrument and the creation of supplementary rules by the designated competent authority; (ii) the Prospectus (Directive 2003/71/EC) Regulations 2005 (the Prospectus Regulations), which implemented the Prospectus Directive and Commission Regulation 809/2004 in Ireland; (iii) the Prospectus Rules issued by the Irish Financial Services Regulatory Authority (the Prospectus Rules), which set out procedural and administrative requirements and guidance in respect of the Prospectus Regulations; (iv) the direct effect of Commission Regulation 809/2004 (the Commission Regulations); and (v) the adoption by the Irish Financial Services Regulatory Authority of the Committee of European Securities Regulators (CESR) Recommendations for the consistent implementation of the Commission Regulations (the CESR Recommendations). The Prospectus Rules state that in considering whether the Prospectus Regulations have been complied with the Irish Financial Services Regulatory Authority will take into account whether a person has complied with the CESR Recommendations .
II
7.2
The competent authority

The Irish Financial Services Regulatory Authority (also known as the Financial Regulator or IFSRA) was designated as the competent authority for the purposes of the 2005 Act and the Prospectus Regulations. The Financial Regulator is the Irish regulatory authority for the financial services industry. It is a distinct component of the Central Bank and Financial Services Authority of Ireland, with clearly defined regulatory responsibilities and has the power under legislation to make various rules, policies and codes affecting the financial services industry from both a consumer and industry perspective .
III 1
7.3
Prior approval procedure and appeal Approval

Part 7 of the Prospectus Regulations provides for approval of prospectuses by the Financial Regulator. Pursuant to its powers under the Prospectus Regulations, the Financial Regulator delegated a number of its tasks arising under the Prospectus
102
Ireland
7.4
Regulations to the Irish Stock Exchange Limited (ISE). Pursuant to this delegation, the ISE is the authority that reviews and comments on a draft prospectus submitted for approval. In order to have a prospectus approved, therefore, an applicant must submit a draft of the prospectus to the ISE with any other information and documents the ISE may require in accordance with the Prospectus Rules. In particular, the Prospectus Rules state that the following draft documents and information must be included with any prospectus application: (i) the prospectus; (ii) if requested, where the order of items in the prospectus does not coincide with the order in the schedules and building blocks in the Commission Regulations, a cross-reference list identifying the pages where each item can be found in the prospectus; (iii) a letter identifying any items from the schedules and building blocks in the Commission Regulations that have not been included in the prospectus because they are not applicable; (iv) if the applicant is requesting the Financial Regulator to authorise the omission of information from the prospectus, the information required by Rule 4.9 of the Prospectus Rules. In addition, the applicant is required to ensure that where such a request is not submitted to the ISE at the time of the initial submission of the prospectus for approval, the request is submitted to the ISE at least five business days before the end of the prospectus review process referred to below; (v) the formal notice (in final draft form) stating how the prospectus will be made available and where it can be obtained by the public; (vi) if the applicant wishes the Financial Regulator to provide a competent authority of a relevant host Member State with a certificate of approval in accordance with Regulation 56 of the Prospectus Regulations where the prospectus is approved (i.e., passporting of the prospectus), a letter requesting the Financial Regulator to provide this notification; and (vii) any other information that the Financial Regulator and/or ISE may require . The ISE must notify the applicant of its decision within ten working days or, in the case of a new issuer, twenty working days from the first working day after the date on which the application is received. If, however, the ISE requests specific documents or information from the applicant in writing, this period starts to run the day after the applicant complies with the request. If the ISE fails to give a decision to approve a prospectus within the time limits, this failure is not deemed to constitute approval by it of the prospectus . 7.4 The ISE will scrutinise the prospectus submitted to it to assess whether or not it has been drawn up in accordance with the Prospectus Regulations and the Commission Regulation. On completion of its scrutiny of a prospectus, the ISE 103
7.4
will issue a recommendation to the Financial Regulator as to whether or not the prospectus has been drawn up in accordance with the Prospectus Regulation and the Commission Regulation. On consideration of this recommendation the Financial Regulator will decide whether to approve the prospectus and will communicate its decision in writing to the registered office of the relevant person or their nominated agent. The Financial Regulator may not approve a prospectus unless it is satisfied that the applicable requirements imposed by it under the Prospectus Regulations and any other provision of Irish prospectus law have been complied with. In the event that agreement between the applicant and the ISE cannot be reached in relation to whether or not a prospectus submitted to the ISE is drawn up in accordance with the Prospectus Regulations and the Commission Regulation, the applicant may refer the matter directly, in writing, to the Financial Regulator . On a prospectus being approved, the applicant must file the prospectus with the Financial Regulator immediately and, if the Company is an Irish company, with the Companies Registration Office within fourteen days of the publication of the prospectus . 7.5 If the Financial Regulator refuses to approve a prospectus, the applicant has twenty-eight days from that decision to appeal such decision to the Irish High Court .
2
7.6
Meaning of offer to the public

Prior to the implementation of the Prospectus Directive, there was no clear meaning of offer to the public. The Companies Act 1963 made reference to it without properly defining it, while the European Communities Transferable Securities and Stock Exchange Regulations 1992 made no reference to it at all while providing some guidance as to certain offers that could be excluded from the requirement to publish a prospectus. The introduction, therefore, of the Prospectus Directive and the repeal of the pre-existing prospectus laws clarified matters greatly. Accordingly, all offers of securities to the public or public offers must be accompanied by a prospectus (unless such offer falls within an exemption from publishing a prospectus). The Financial Regulator did, however, clarify the definition to make clear that it does not apply to a communication in connection with trading on a regulated market or any other market operated by an approved stock exchange (being an exchange prescribed as such by the Irish Government) .
3
7.7
Obligation to publish a prospectus

Regulation 12 of the Prospectus Regulations states that, subject to the exemptions set out in Regulations 9 and 10, no offer of securities to the public may be made in Ireland without the publication of a prospectus in respect of that
104
Ireland
7.8
offer, unless, where Ireland is the home Member State, the prospectus has been approved by the Financial Regulator or, where Ireland is a host Member State, the prospectus has been approved by the competent authority of the relevant home Member State, pursuant to the relevant implementing legislation in that state, of the Prospectus Directive . In addition, Regulation 13 states that no securities shall be admitted to trading on a regulated market in Ireland (being the ISEs main market) without the publication of a prospectus unless, where Ireland is the home Member State, the prospectus has been approved by the Financial Regulator or, where Ireland is a host Member State, the prospectus has been approved by the competent authority of the relevant home Member State, pursuant to the relevant implementing legislation in that state, of the Prospectus Directive.
4
7.8
Exemptions from the prospectus requirement

There are a number of exemptions, set out in Regulations 9 and 10 of the Prospectus Regulations, from the requirement to publish a prospectus where there is an offer of securities to the public. These exemptions, which can be classified as relating to the offer or the securities, are as follows: (i) an offer of securities addressed solely to qualified investors; (ii) an offer of securities addressed to fewer than 100 persons, other than qualified investors; (iii) an offer of securities addressed to investors where the minimum consideration payable pursuant to the offer is at least 50,000 per investor, for each separate offer; (iv) an offer of securities whose denomination per unit amounts to at least 50,000; (v) an offer of securities where the offer expressly limits the amount of the total consideration for the offer to less than 100,000; (vi) securities that are not in fact being offered because existing shareholders receive them by way of an existing right, for example (1) shares issued in substitution for outstanding shares of the same class; (2) an issuance of new shares that does not involve an increase in the companys share capital; and (3) shares offered free of charge to existing shareholders and dividends paid in the form of shares of the same class as those for which the dividends are paid; (vii) securities offered in connection with certain transactions, such as takeovers or mergers, provided a document is made available containing information the Financial Regulator regards as equivalent to that contained in a prospectus; importantly an equivalent document is not a prospectus for the purposes of the Prospectus Directive and is therefore not eligible for the European passport; and (viii) securities offered to employees or former employees which are already admitted to trading on a regulated market . 105
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Regulation 13 lists the exemptions from the obligation to publish a prospectus where there is an admission to trading of securities on a regulated market in Ireland. The exempt securities listed in Regulation 13 fall into two main categories: those that mirror the securities which are exempt in a public offering (see (vi) to (viii) above); and additional exemptions which companies may use in connection with the exemption for offerings, including: (i) an exemption for the admission of shares representing, over a twelvemonth period, less than ten per cent of shares of the same class already admitted to trading on the same regulated market; (ii) an exemption for shares resulting from the conversion, exchange or substitution of other securities or the exercise of rights (i.e., warrants, options or convertibles, so long as it does not result in a public offering); and (iii) an exemption that permits the admission of securities where there is no prospectus to passport into Ireland but the offeror nevertheless meets certain conditions (e.g., the securities have been traded on another regulated market for at least eighteen months) .
IV 1
7.10
Content, responsibility, language and supplements General content requirements

Part 5 of the Prospectus Regulations, and in particular Regulation 19, provides that a prospectus must contain all information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to the securities. The prospectus must be consistent and presented in an easily analysable and comprehensible form, contain information concerning the issuer and the securities to be offered or admitted to trading and must contain the minimum information required under the Commission Regulations. A prospectus must also contain a summary which briefly and in non-technical language conveys the essential characteristics and risks associated with the issuer, any guarantor and the securities. Unlike other jurisdictions (such as the UK), the ISE does not set a limit of 2,500 words on the summary .
2
7.11
Responsibility
Schedule 1 of the Prospectus Regulations sets out those persons who are responsible for a prospectus. The responsible persons for prospectuses relating to equity securities are: (i) the issuer; (ii) all persons that are directors of the issuer when the prospectus is published and those that have authorised themselves to be named as directors or having agreed to become directors of the issuer;
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(iii) each person that accepts, and is stated in the prospectus as accepting, responsibility for the prospectus; (iv) the offeror of the securities (if there is an offer to the public and the offeror is not the issuer); (v) the person seeking admission of the securities (if not the issuer); and (vi) every other person that has authorised the contents of the prospectus (other than the Financial Regulator). The issuer is not responsible if it does not authorise the application for admission to trading or the offer to the public. In addition, directors are not responsible when a prospectus is published without their consent and they have given reasonable public notice that it has been issued without their knowledge or consent. 7.12 Certain persons (for example, experts) can state in the prospectus that they accept responsibility only for specific parts of the prospectus or only in specific respects, and such persons must give written confirmation regarding statements made by them in the prospectus. In these written confirmations such person will state that they are only responsible to the extent specified and only if the material in question is included in (or substantially in) the form and context to which they had agreed .
3
7.13
Format
The Prospectus Regulations provide for two primary options as regards the format of a prospectus. It may either be a single document (including a summary) or a tripartite prospectus consisting of a registration document, a secur ities note and a summary note . The registration document contains the required information in respect of the issuer and the securities note details the required information as regards the securities to be offered and/or admitted to trading. Where separate documents are used, where a person has a registration document approved by the Financial Regulator, it need only draw up the securities note and the summary when its securities are offered to the public or admitted to trading. The registration document once approved is valid for twelve months provided it is updated with a supplement where required . If the tripartite document approach is taken, the securities note must provide the information that is normally included in the registration document if there has been a material change or recent developments which could affect investors assessments since the last updated registration document or supplement was approved. In addition to the two options above, where the securities in question are nonequity securities being issued under an offering programme or in a continuous or repeated manner, a base prospectus can be filed with the Financial Regulator and supplemented as necessary with information on the issuer and/ or the relevant securities . 107
7.14
7.15
4
7.15
Detailed requirements
The detailed prospectus content requirements are as set out in the Commission Regulations and, more particularly, the Annexes to those Regulations. The Prospectus Regulations also provide for the incorporation of information by reference. Only information that has been approved by the Financial Regulator or filed with it in accordance with the issuers annual information requirements (see below) may be incorporated in this way. The information included in this manner must be the latest available to the issuer and the prospectus summary may not incorporate information by reference. Where information is incorporated by reference, a cross-reference list must be provided in order to enable investors to easily identify specific items of information . Where Ireland acts as a home Member State, issuers whose securities are admitted to trading are required, pursuant to the Prospectus Rules, to file an annual update with the ISE within twenty working days of the publication of the issuers annual financial statements. This statement must contain or refer to all information published or made available to the public over the previous twelve months pursuant to obligations imposed on the issuer by securities regulators in the EEA and elsewhere. In order to satisfy this requirement, the Financial Regulator permits issuers to file a list stating where this information can be obtained, indicating the date of its publication and filing, and including a short description. Appropriate disclaimers are usually included to ensure that investors do not rely on information which may be out of date. The Financial Regulator maintains a page on its website (www.financialregulator.ie) where annual information updated can be obtained .
7.16
5
7.17
Prospectus supplements
Regulation 51 of the Prospectus Regulations requires the publication of a supplement to a prospectus if any significant new fact arises or material mistake or inaccuracy in the prospectus comes to light which is capable of affecting the assessment of the securities, and which arises or is noted from the time of approval of the prospectus to either the close of the offering or the commencement of trading, as the case may be. The same approval process as applies for a prospectus will apply to a supplement save that the ISE is required to review and comment on the supplement within seven working days . It is an implied term of every prospectus that where a person has agreed to purchase or subscribe for the securities concerned (or agreed to do so) before a supplement is published, that person has two working days to withdraw their application or acceptances by notice in writing .
6
7.18 108
Language
Rule 6 of the prospectus Rules states that the Financial Regulator will accept a prospectus drawn up in either the Irish or English languages. It will also require
Ireland
7.20
an Irish or English translation of the summary of a non-Financial Regulator approved prospectus if the issuer is making a public offering of securities or seeking an admission to trading .
V 1
7.19
Publication and advertisements Publication method

Pursuant to Regulation 45 of the Prospectus Regulations, a prospectus is deemed to have been made available to the public when published either: (i) in one or more newspapers circulated throughout, or widely circulated in, Ireland or in the Member States in which the offering is made or the admission to trading sought; (ii) in a printed form to be made available, free of charge, to the public at the offices of the market on which the securities are being admitted to trading or at the issuers registered office and at the offices of the financial intermediaries placing or selling the securities, including paying agents; (iii) in electronic form on the issuers website and, if applicable, on the website of financial intermediaries placing or selling the securities, including paying agents; or (iv) in electronic form on the website of the regulated market where admission to trading is being sought; or (v) on the Financial Regulators website (the prospectus will be published in this manner by the Financial Regulator unless the issuer requests otherwise) . Pursuant to Regulation 46, where the securities being offered are equity securities, the issuer must publish a notice stating how the prospectus has been made available to the public . Where the prospectus has been made available in electronic form, the issuer must send a paper copy to any investor, free of charge, on request . Prospectuses approved by the Financial Regulator are available on the Approved Prospectuses page of its website .
2
7.20
Advertisements
Part 12 of, and Schedule 2 to, the Prospectus Regulations deal with advertisements relating to a public offer or an admission to trading. Advertisements that comply with Part 12 and Schedule 2 are not considered to be a prospectus. Schedule 12 sets out the principles that apply to any advertisements. These include principles that advertisements must state that a prospectus has been or will be published and indicate where it can be obtained, that information in the advertisement must be consistent with that contained in the prospectus and 109
7.20
that where material information is given to select investors, it must be given to all investors .
VI
7.21
Use of prospectuses approved in non-EU and non-EEA countries

Where Ireland is the home Member State for a third-country issuer (not being an issuer from a Member State), the Prospectus Regulations permit the Financial Regulator to approve a prospectus drawn up by a third-party issuer in accordance with its national law provided the prospectus has been drawn up in accordance with appropriate international standards (including IOSCO disclosure standards) and the information requirements including information of a financial nature are equivalent to the requirements under the Prospectus Directive. Pursuant to Regulation 55 of the Prospectus Regulations, a prospectus approved by the competent authority of a Home Member State (other than Ireland) shall be deemed valid in Ireland provided a notification is given to the Financial Regulator by that other authority which notification must include (1) a certificate of approval (certifying compliance with the Prospectus Directive); (2) a copy of the prospectus as approved; and (3) if requested by the Financial Regulator, a translation of the summary of the prospectus into the Irish or English languages .
VII
7.22
Sanctions
Pursuant to Part 15 of the Prospectus Regulations, the Financial Regulator has the authority and power to appoint a person (an assessor) to determine if any relevant provision of the Prospectus Regulations, the Prospectus Rules or any other provision enacted in accordance with the Prospectus Directive has been breached. The assessor has the power to call witnesses and seek documentation and a right to apply to the High Court to seek cooperation from any persons being assessed. If an adverse finding is made against a person, the Financial Regulator may impose such of the following administrative sanctions as it may determine: (i) a private caution or reprimand; (ii) a public caution or reprimand; (iii) a direction to pay a fine to the Financial Regulator (maximum 2,500,000); (iv) a direction disqualifying that person from being involved in the management of any regulated financial service provider; (v) a direction to cease committing the contravention; or (vi) a direction to pay all or part of the Financial Regulators costs. Any sanctions may be appealed by a person to the Irish High Court .
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VIII
7.23
The 2005 Act provides for civil liability for misstatement in a prospectus and for criminal sanctions where there has been a breach of the 2005 Act or the Prospectus Regulations. Criminal penalties include fines of up to 1,000,000 and/or a maximum jail sentence of five years. Where a person suffers loss on the faith of a prospectus where the loss may have been sustained by reason of an untrue statement or any omission of information required by the Prospectus Directive and the Commission Regulations, section 41 of the 2005 Act provides that compensation must be paid by: (i) the issuer of the prospectus; (ii) the offeror of the securities to which the prospectus relates; (iii) every person who has sought the admission of the securities to which the prospectus relates to a regulated market; (iv) the guarantor of the issue; (v) every director of the issuer; (vi) every promoter of the issuer; and (vii) every person who has authorised the issue of the prospectus (not including the Financial Regulator) .
7.24
Persons cannot be liable solely on the basis of the summary unless it is inaccurate, misleading or inconsistent when read together with other parts of the prospectus. Further, a person cannot be liable if they can prove that: they did not consent to the issue of the prospectus (or withdrew consent before publication or acquisition of any securities by an investor); or they have reasonable grounds to believe that the information in the prospectus was true or that the omission causing loss was rightly omitted .
IX
7.25
Listing rules
The Prospectus Directive only harmonises rules in relation to prospectuses. The listing rules of the ISE contain a number of obligations which are superequivalent to the requirements of the Prospectus Directive. In particular, a company listed on the ISEs main market must comply with super-equivalent eligibility requirements, continuing obligations and rules in relation to sponsors. This means that a prospectus which is passported into Ireland is no guarantee of admission to the ISEs main market, as the issuer must still satisfy the super-equivalent listing rules requirements .
X
7.26
Private companies
Section 21 of the Companies (Amendment) Act 1983 and section 33 of the Companies Act 1963 prohibit the offering of shares or debentures to the 111
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public by an Irish private company. If a company wishes to offer shares to the public, the issuing company must be a public limited company prior to the offering in question, or the private company should re-register as such prior to such offering. If this is not possible, the private company will need to consider if the offering is being made to the public .
112
8 Italy
F r a nc e s c o Gi a n n i, A n dr e a M a r a n i a n d Gau di a na Gi us t i
Gianni, Origoni, Grippo & Partners
Introduction 114 Main provisions of the Prospectus Directive and the Prospectus Regulation implemented within the Italian legal system before the Implementation Decree 115 1 The EU passport 115 2 Annual update document 116 3 Incorporation of information by reference 116 4 Form of prospectuses 117 III The Implementation Decree in brief 118 IV The regulatory framework in Italy 119 V Range of application 119 1 New definitions of EC financial instruments, public offering of financial products, home Member State and host Member State 119 VI Exemptions from the obligation to publish a prospectus 123 VII Approval of the prospectus by the competent authority and the related drafting procedures 124 1 Prohibition on publishing a prospectus without the prior authorisation of Consob 124 2 Right of Consob to transfer the approval of the prospectus to another competent authority of an EU State 125 3 Procedure for the approval of the prospectus 126 4 Prospectus composed of several documents 126 VIII Contents of the prospectus and language 127 1 Contents of the prospectus 127 2 Language 127 IX Revocation of subscriptions 128 X Advertisements 128 XI Prospectus liability 129 XII Financial statements of the issuer 130 131 1 Offence of falsification of the prospectus
I II
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8.1
I
8.1
Introduction
The deadline for implementing the Prospectus Directive and the Prospectus Regulation expired on 1 July 2005. However, like other Member States, Italy has not yet complied with such deadlines. On 28 December 2005, the Italian Parliament adopted Law No. 262 (the Law on Savings),1 as subsequently modified, setting forth Provisions for protecting savings and regulating the financial markets. In particular, Article 12 of the Law on Savings, among others, authorised the Government to adopt a legislative decree, within eighteen months as of the date of its entering into force, in order to implement the provisions of the Prospectus Directive. On 28 March 2007, the Government, availing itself of such authorisation, issued Legislative Decree No. 51 (the Implementation Decree), by means of which the Prospectus Directive was finally implemented within the Italian legal system. In the period between the expiry of the deadline for implementing the Prospectus Directive and the Prospectus Regulation, the general principles of the EC system, as implemented in Italy, have been applied. In particular, according to Italian case law,2 unconditional directives having a sufficiently clear content but which have not been implemented yet by Member States within the prescribed deadlines are considered immediately applicable (so-called self-executing directives, i.e., those directives which do not require further actions for their implementation). Based on this principle, the competent authority of a Member State that has not formally implemented the Prospectus Directive will not be able to exempt itself from the application of the principles set by the same Prospectus Directive and the Prospectus Regulation, if so requested, even if different national rules apply. In view of the above principle, the Commissione Nazionale per le Societ e la Borsa (i.e., the independent administrative authority responsible for protecting investors, efficiency, transparency and the development of the Italian securities market) (Consob), as of 5 July 2005, has applied the prospectus schemes provided by the Prospectus Regulation. In fact, the contents of such schemes appeared to be detailed and unconditional.3 Moreover, while awaiting the necessary amendments to the most important Italian legislative Act governing financial matters (i.e., Legislative Decree no. 58 of 24 February 1998, the TUF or Unified Financial Act), in order to ensure the consistency of the TUF with the provisions of the Prospectus Directive, Consob has approved some amendments to Consob Prospectus Regulation No. 11971 regarding issuers (the RE or Issuer Regulation) in order to partially implement the Prospectus Directive, with respect to those
8.2
8.3
8.4
8.5
8.6
8.7
8.8
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matters on which Consob has been already vested with regulatory authority in accordance with Article 94, paragraph 3, Article 95 and Article 100, paragraph 2, of the TUF.4 8.9 In particular, the provisions of the Prospectus Regulation and those regarding the EU passport and the exemptions from the obligation to publish a prospectus (with respect to the latter aspect, see Paragraph VI hereinafter) have been implemented. Conversely, some provisions of the Prospectus Directive were not implemented under the Issuer Regulation, such as those relating to: (i) some definitions, among which, in particular, we note those of financial instruments, public offerings and qualified investors (Art. 2 of the Prospectus Directive); (ii) the possibility to revoke the subscriptions in the event of publication of a supplement to the prospectus or of the omission from the same of the definitive offer price and the amount of financial instruments offered (Art. 8(1) and Art. 16(2) Dir.); (iii) civil liability for the information provided in a prospectus (Art. 6 Dir.); (iv) sanctions (Art. 25 Dir.); and (v) advertisements in the context of offering financial products to the public (Art. 15 Dir.).
8.10
II
Main provisions of the Prospectus Directive and the Prospectus Regulation implemented within the Italian legal system before the Implementation Decree
The main provisions of the Prospectus Directive and the Prospectus Regulation directly applied within the Italian legal system, before the Implementation Decree, are analysed below.
8.11
1
8.12
The EU passport
The provisions of Article 17 of the Prospectus Directive regarding the EU passport have been reflected in Articles 10 and 10bis of the Issuer Regulation, which have been issued to implement the provisions of Article 98 of the TUF, which sets forth, among others, that Consob is responsible for ruling, by means of regulations, the recognition in Italy of prospectuses approved, in compliance with EC rules, by the competent authorities of other Member States. The principle of the EU passport provides that a prospectus, which has obtained the approval of the competent authority of the home Member State of the issuer, does not require further authorisation by the competent authority of the host Member State, provided that the latter receives an approval certificate issued by the first authority. In the event that Italy is the home Member State, Article 10 of the Issuer Regulation provides that prospectuses and any related supplements the publication of which has been authorised by Consob are valid for public offerings 115
8.13
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8.14
or admission to negotiations in any other Member State. In such a case, upon request by the issuer or the offeror, Consob must transmit, within three days of such request or, in the event that the request is presented together with the draft of the prospectus, within one business day of issuance of authorisation, to the competent authorities of the Member States in which the offering has to be carried out, the following documentation: (i) a certificate attesting that the prospectus complies with the provisions of the Prospectus Regulation; (ii) a copy of the prospectus; and (iii) if requested by such authorities, a translation of the summary box in the official language of the Member State in which the offering is made. It is specified, moreover, that the issuer, the offeror or the other persons responsible for drafting the prospectus shall assume responsibility for the truthfulness of the translation and its compliance with the version approved by Consob. 8.15 Conversely, in accordance with Article 10bis of the Issuer Regulation, in the event that the offering is made in Italy as the host Member State, subject to the prior approval of the competent authority of the originating Member State, the prospectus can be published in Italy subject to the condition that Consob receives the documentation mentioned under (i), (ii) and (iii) above. However, the intervention of Consob on the Issuer Regulation gave rise to numerous uncertainties with respect to the applicability of some other provisions (contained in the same Issuer Regulation) to public offerings made in Italy as host Member State on the basis of a duly passported prospectus (e.g., Arts. 13 and 14 of the Issuer Regulation regarding the execution of the offering and its fairness).
8.16
2
8.17
Annual update document

In implementing Article 10 of the Prospectus Directive, Article 54 of the Issuer Regulation provides that issuers shall be obliged to file with Consob, at least on an annual basis, a document that contains or refers to all the information regularly published by the same, whether inside or outside the European Union, during the preceding twelve months. In the event that the annual update document refers to information already published or made available to the public during the previous twelve months, the same must indicate: (i) the nature of such information; (ii) the date of publication; and (iii) the place where such information is available. The document shall be filed with Consob after the publication of the annual financial statements.
8.18
8.19
3
8.20 116
Incorporation of information by reference

According to what is provided for by the twenty-ninth recital of the Prospectus Directive, the right granted to issuers to incorporate information into the
Italy
8.25
prospectus by reference to documents containing the information to be disclosed in a prospectus provided that such documents have been previously filed with the competent authority or approved by it should simplify the procedure for drafting a prospectus and reduce the costs for issuers, without compromising the protection of investors. 8.21 Article 8 of the Issuer Regulation has effectively allowed the incorporation of information by reference in an offering or listing prospectus, in the event that the documents to be incorporated have previously been filed with the competent authority or approved by it. In particular, in the event that the prospectus is composed of several documents or contains information, included by reference, such documents and the information composing it may be published and distributed severally, providing that such documents are made available to the public, free of charge, alternatively: (i) by means of an announcement in one or more newspapers of national or widespread circulation; (ii) in printed form at the registered office of the issuer and at the offices of the intermediaries responsible for placement or of those operating on their behalf; or (iii) in electronic form on the website of the issuer and, where applicable, on the website of the intermediaries responsible for the placement. In this case, the issuer, the offeror and the responsible intermediaries or those operating on their behalf shall deliver a copy of the prospectus in printed form, free of charge, to those requesting it. The foregoing are the same procedures established by the Issuer Regulation for the publication of the prospectus itself. The possibility of incorporating documents/information by reference makes the drafting of a prospectus less burdensome as Consob also allows the incorporation by reference into Italian prospectuses even if the documents are written in English.
8.22
4
8.23
Form of prospectuses
Article 5 of the Issuer Regulation establishes that the prospectus for financial instruments, other than the units or shares of open UCITS,5 shall be drawn up in accordance with the provisions of the Prospectus Regulation. Furthermore, in the event that the offering is carried out exclusively within Italy as home Member State, the prospectus shall be drawn up in Italian. Pursuant to Article 5 of the Issuer Regulation, the indications as to the price and amount of the financial products if not known at the moment of publication of the prospectus may be inserted into supplementary announcements published pursuant to Article 9 of the Issuer Regulation.6 In this case, the prospectus must indicate the criteria and conditions on the basis of which the price and amount of the financial products shall be determined or, in the case of the price, the maximum price. Article 5 of the Issuer Regulation also provides that the prospectus must contain a summary drawn up in non-technical language and compliant with the 117
8.24
8.25
8.25
terms of Article 24 of the Prospectus Regulation. The summary shall briefly present the essential risks and characteristics associated with the issuer, the possible guarantors and the financial instruments, in the language in which the prospectus was originally drafted, and shall contain a warning, according to which: (i) it shall be read as an introduction to the prospectus; (ii) any decision to invest in the financial instruments shall be based on an examination by the investor of the complete prospectus; (iii) whenever an action is proposed before a judicial authority regarding the information contained in the prospectus, the appealing investor may be obliged to bear the translation costs for the prospectus before the start of the proceedings; and (iv) the civil liability shall only be borne by the persons who have drafted the summary and its translation, if any, only when such summary is misleading, imprecise or inconsistent, if read together with the other parts of the prospectus. 8.26 Article 5 of the Issuer Regulation also provides that the placement manager shall attest, through a declaration attached to the notice, that the prospectus has been drawn up in accordance with the Prospectus Regulation and contains the significant information to the aims of its preparation or of which it has become aware during its investigations. The issuer or the offeror and the other parties responsible for the prospectus shall sign the declaration of liability set forth by the Prospectus Regulation to be reproduced as an attachment to the notice.7 In exceptional cases, and without prejudice to the observance of the objectives indicated by Article 94, second paragraph, of the TUF8 and by the EC regulations, Article 5 of the Issuer Regulation allows Consob to exclude the publication of some of the information established in the scheme of the prospectuses upon request of the offeror, the issuer and the placement manager. Article 5 of the Issuer Regulation also provides that, when certain information prescribed in the schemes of the prospectus is not appropriate in light of the activity of the issuer or its legal form or for the financial products being the object of the prospectus, the same prospectus must contain equivalent information, where available. Finally, Article 5 of the Issuer Regulation provides that, if the offering relates to financial products for which suitable schemes are not provided, Consob shall establish the contents of the prospectus at the request of the offeror.
8.27
8.28
8.29
III
8.30
The Implementation Decree in brief

With the Implementation Decree the Government has intervened by modifying the TUF in the following areas: (i) definitions (Art. 1 and Art. 93bis TUF); (ii) regulations relating to the offering prospectus and the approval of the prospectus (Art. 94 TUF and Art. 94bis TUF); (iii) provisions for implementation (Art. 95 TUF); (iv) revocation of purchases and subscriptions (Art.
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95bis TUF); (v) financial statements of the issuer (Art. 96 TUF); (vi) disclosure obligations (Art. 97 TUF); (vii) validity of the prospectus (Art. 98 TUF); (viii) issuers from non-EU countries (Art. 98bis TUF); (ix) offering to the public of units or shares in open-ended UCITSs (Art. 98ter TUF); (x) provisions for implementation relating to the preceding point; (xi) disclosure obligations (Art. 98quinquies TUF); (xii) powers of Consob (Art. 99 TUF); (xiii) cases of non-applicability of the provisions to the public offering (Art. 100 TUF); (xiv) provisions relating to the circulation of financial products (Art. 100bis TUF); (xv) announcement activities (Art. 101 TUF); (xvi) admission to trading of EU financial instruments (Art. 113 TUF); (xvii) admission to trading of units or shares in open UCITSs (Art. 113bis TUF); (xviii) sanctions in the case of violation of the provisions relating to the public offering of financial products or to admission to trading (Art. 191 TUF and Art. 191bis TUF). 8.31 Hereinafter the principal provisions of the Implementation Decree, as implemented in the TUF, are illustrated.
IV
8.32
The regulatory framework in Italy

The regulatory framework consists of: (i) the Prospectus Directive and the Prospectus Regulation; (ii) document CESR/05-054-b of 10 February 2005, containing recommendations for the consistent application of the regulations mentioned above; (iii) the TUF, as modified by the Implementation Decree; and (iv) the Issuer Regulation.
V 1
8.33
Range of application New definitions of EC financial instruments, public offering of financial products, home Member State and host Member State
Prior to the issuance of the Implementation Decree, Article 2 of the Issuer Regulation introduced only the definitions of: (i) home Member State; (ii) host Member State; (iii) equity securities; and (iv) instruments other than equity securities, in so far as the same were not defined within the TUF but their area of application was limited to the regulations on offerings of investments. Following the issuance of the Implementation Decree, in addition to the above definitions, the new definitions contained in the TUF shall henceforth be applied. For the purposes of applying the provisions on public subscription and sale offerings, it is useful to illustrate the following definitions. In accordance with Article 3 of the Implementation Decree, EC financial instruments are: (i) equity securities tradable in the capital markets; (ii) bonds, government securities and other debt securities tradable in the capital markets; (iii) any other normally traded security which allows the instruments described 119
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in (i) and (ii) to be purchased through subscription or exchange or which entail cash settlement, determined with regard to EC financial instruments, currencies, interest rates or yields, commodities or other indices or measures, as well as units of closed-end funds. 8.36 Financial instruments are further subdivided into equity securities and instruments other than equity securities. In particular, equity securities are defined as: equity and other tradable instruments equivalent to shares in companies as well as any other type of tradable EC financial instrument which assigns the right to purchase the above instruments through conversion or the exercise of rights provided that the latter instruments are issued by the issuer of the underlying shares or by an entity belonging to the group of the same issuer. Conversely, instruments which differ from equity securities consist of all the financial instruments which are not included within the definition of equity securities. According to the twelfth recital of the Prospectus Directive and the Prospectus Regulation, certificates representing shares and convertible bonds should be considered as instruments differing from equity securities. For the purpose of being qualified as EC financial instruments and as equity securities, the instruments described above must be negotiable. The notion does not only refer to the suitability of such instument to be traded on regulated markets. Neither Article 3 of the Implementation Decree nor the Prospectus Directive contain any reference to the circumstances in which the instrument is admitted to listing on a market or meets the requirements for obtaining such a listing. Conversely the reference is made to the broadest notion of capital markets, which includes but does not coincide with that of regulated markets. As a consequence, even unlisted instruments may be EC financial instruments provided that they are negotiable. Thus, the negotiability of an instrument must be understood as its suitability to be the object of transactions, and hence of transfer, on capital markets.9 The notion of capital markets is not identified in the regulations, but is gathered from practice. Since, unlike regulated markets, the capital market is not a defined market, nor even less regulated as such, it is not required that the instruments must be transferred according to certain rules or procedures (which instead are applied to negotiations carried out in official markets). The important aspect is that the instrument is normally and generally transferable, and suitable to be the object of transactions. Article 2 of the Implementation Decree replaces the definition of investment solicitation10 with that of the public offering of financial products, being any notice aimed at persons, in any form and with any means, which presents sufficient information on the conditions of the offering and the financial products offered, in order to allow an investor to decide whether or not to purchase or subscribe such financial products, including the placement through authorised subjects.
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8.38
8.39
120
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8.40
The notion of public offering, as implemented in Italy, is broader than that of EC law (Art. 2(1) Dir.) since this latter notion refers only to financial instruments and not to financial products. Indeed, the financial instruments are a species of the genus financial products. Financial products are defined by Article 1, lett. u) of the TUF as: financial instruments and any other form of investment having a financial nature. Public offers of financial products other than EC financial instruments cannot benefit by the so-called European passport. Unlike the provisions in force before the issuance of the Implementation Decree, financial announcements no longer constitute a form of public offering of financial products. In order to be considered as such, the aforementioned announcements must present sufficient information on the conditions of the offering and the financial products offered in order to allow an investor to decide whether or not to acquire or subscribe such financial products. Article 2 of the Implementation Decree specifies that the placement of financial products through financial intermediaries is also subject to the publication of the prospectus, unless the placement falls within one of the cases expressly exempted from such publication. This provision is intended to prevent cases of elusion of the obligation of a prospectus in the event of subsequent sale to the retail market of securities originally placed with institutional investors, for which the obligation in question does not apply. In this respect, the Law on Savings introduced Article 100bis of the TUF, which provides that an offering is also made to the public when the financial products which have been the object of a placement reserved to professional investors in Italy or abroad are systematically resold over the following twelve months to subjects other than professional investors, and the same resale does not fall under any of the exemptions established by Article 100 of the TUF. Furthermore, in the above event, when no prospectus has been published, the purchaser who is acting for purposes other than business or professional activity may assert the nullity of the contract, and the authorised subjects, who carried out the resale of the financial products, shall be liable for the damages caused. This is clearly an explicit restriction on resale in the secondary market carried out in a way which does not comply with the provisions relating to the prospectus. The adoption of such a provision has been suggested by the scandals that occurred in Italy in the past in the context of certain offers (one may recall the offering of notes issued by the Argentinean State in 2001, by Cirio-del Monte in 2002 and by Parmalat in 2003, which ended up in the portfolios of many nonprofessional investors, even though the offering had originally been carried out without the preparation of any prospectus, taking advantage of the exemption relating only to offers addressed to professional investors). Pursuant to the old regime, in order to qualify an activity of offering to the public of financial products as an investment solicitation, it was required that the offering, the invitation to an offering or the promotional messages had 121
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to be aimed at the sale or subscription of financial products.11 Conversely, in order to qualify an offering, pursuant to the new regime, as an offering to the public of financial products, it is now sufficient that the notices include at least core information about the conditions of the offering and the financial products in order to allow the investor to decide whether or not to acquire or underwrite such financial products; the specific purposes which are pursued by the offering are no longer relevant. 8.44 In accordance with Article 3 of the Implementation Decree, home Member State means: 1) for all the European Community issuers of Community financial instruments not mentioned in point (2) below, the Member Sate in which the issuer has its registered office; 2) for the issuance of EC financial instruments other than equity securities, whose unit nominal value is at least 1,000, and for the issuance of EC financial instruments other than the equity securities which give the right to acquire negotiable securities or to receive an amount in cash through the conversion or exercise of rights given by the same securities, provided that the issuer of EC financial instruments other than equity securities is not the issuer of the underlying EC financial instruments or an entity belonging to the group of such issuer, the Member State in which the issuer has its registered office, or in which the EC financial instruments have been or are intended to be admitted to trading on a regulated market or in which the EC financial instruments are offered to the public at the choice of the issuer, the offeror or the person requesting the admission of the same, as the case may be. The same regime shall apply to EC financial instruments other than equity securities denominated in a currency other than Euro, provided that the value of such a minimum denomination is approximately equivalent to 1,000; 3) for all issuers of EC financial instruments which are not mentioned in point 2) with their registered office in a third country, the Member State in which the EC financial instruments are intended to be offered to the public for the first time after the date of coming into force of the Prospectus Directive, or in which the first request has been presented for admission to trading on a regulated market at the choice of the issuer, the offeror or the person requesting admission, as the case may be, excepting a subsequent choice by the issuers having their registered office in a third country, if the home Member State has not been determined by their choice. 8.45 Finally, pursuant to Article 3 of the Implementation Decree, host Member State is the Member State in which a public offering is made or the admission to trading of EC financial instruments is requested, if it is different from the home Member State.
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VI
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Exemptions from the obligation to publish a prospectus

The new Article 100 of the TUF, as modified by the Implementation Decree, provides that the provisions regarding the offering to the public of financial products such as, among others, the obligation to publish a prospectus, shall not apply to offerings: (a) aimed only at qualified investors, including individuals and small- and medium-sized enterprises, as defined by Consob based on the criteria set forth by EC provisions; (b) aimed at a number of subjects not exceeding that indicated by Consob; (c) of an overall amount not exceeding that indicated by Consob; (d) regarding financial instruments other than equity securities issued by or which benefit by the unconditional and irrevocable guarantee of a Member State or issued by public international entities to which one or more Member States belong; (e) regarding financial instruments issued by the European Central Bank or by the national central banks of Member States; (f) regarding financial instruments continuously or constantly issued by banks, provided that such instruments: (i) are not subordinated, convertible or exchangeable; (ii) do not give the right to subscribe or purchase other types of financial instruments and are not linked to a derivative instrument; (iii) represent, by way of certificates, reimbursable debts; (iv) are covered by a system of deposit guarantees, pursuant to Articles 96 to 96quater of Legislative Decree No. 385 of 1 September 1993; (g) regarding money market instruments issued by banks with a maturity of less than twelve months.
8.47
With regard to the notion of qualified investor under letter (a) above, Consob decided not to carry out a review of such definition as adopted under the old provisions of Article 100 of the TUF. Such a choice was justified by: (i) the need to evaluate whether it was appropriate to create two distinct notions of qualified investor, between intermediation activities and activities of public offerings of financial products; as well as (ii) the circumstance of weighing the possibility of authorising certain individuals and small- and mediumsized enterprises to be considered, at their request, as qualified investors. Furthermore, Consob was not authorised to establish the register of individuals and small- and medium-sized enterprises considered as qualified investors, provided by Article 2(3) of the Prospectus Directive, which was open to consultation by all issuers. The notion of qualified investor contained in Article 2(1) of the Prospectus Directive does not coincide with that of Article 31 of Consob Regulation No. 11522 on intermediaries,12 as subsequently amended (the Intermediary Regulation). First, according to the Intermediary Regulation, in order to be considered as qualified investors, individuals must hold the professional 123
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requirements established by the TUF for those individuals carrying out administrative, management and control functions within intermediation companies. Conversely, Article 2(2) of the Prospectus Directive establishes that subject to a request by an individual and provided that there is a reciprocal recognition between Member States, in order to be considered as a qualified investor such individual must fulfil at least one of the following criteria: (i) to have carried out transactions of significant size on the security market with an average frequency of at least ten transactions per quarter over the last four quarters; (ii) the size of the portfolio of financial instruments must exceed 500,000; or (iii) to work or have worked for at least a year in the financial sector carrying out duties which require a knowledge of financial instruments investments. 8.49 Article 2(1) of the Prospectus Directive defines small- and medium-sized enterprises as companies, which on the basis of their most recent annual or consolidated balance sheet satisfy at least two of the three following criteria: (i) an average number of employees over the course of the financial year less than 250; (ii) total balance sheet assets not exceeding 43,000,000; or (iii) net annual revenue not exceeding 50,000. Upon request of such companies, and provided that there is reciprocal recognition between the Member States, smalland medium-sized companies may be considered as qualified investors. The Intermediary Regulation does not contain an analogous provision. In granting to Consob the regulatory power to define which subjects should be considered as qualified investors, Article 100 of the TUF expressly provides that such a classification shall be made in observance of EC principles. For the purposes of the new notion of qualified investor, it shall thus be necessary to wait till Consob issues the relevant regulation. Pending the issuance of the same, doubts will arise regarding the applicability of the old definition of qualified investor, provided that there is an EC definition which could be considered sufficiently detailed. Article 100 of the TUF also grants to Consob the right to issue regulations which identify further types of offerings to the public of financial products exempted from the obligation of publishing a prospectus.13 Pursuant to Article 100 of the TUF, for the purpose of making use of the EU passport, the issuer or offeror which carries out one of the offerings described in items c), d) and e) above may also decide to draft a prospectus.
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Approval of the prospectus by the competent authority and the related drafting procedures Prohibition on publishing a prospectus without the prior authorisation of Consob
The thirty-seventh recital of the Prospectus Directive underlines that the existence of several competent authorities in each Member State may generate
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superfluous costs and lead to an overlap of responsibility without supplementary advantages. To this end, it seems useful for each Member State to designate a single competent authority for the approval of prospectuses, and for the assumption of the responsibilities regarding the supervision on observance of the Prospectus Directive. In compliance with the terms of Article 21 of the Prospectus Directive, Article 1 of the Implementation Decree establishes that Consob is the competent national authority for the purposes of executing the tasks established by the Prospectus Directive. 8.54 Consob is indeed obliged to verify the completeness of the prospectus as well as its consistency, it being understood that the issuer remains responsible for the truthfulness of the information contained in the prospectus. Article 13(2) of the Prospectus Directive expressly provides that failure by the competent authority to reply to a demand for authorisation to publish a prospectus shall not constitute an approval of the request. Conversely, prior to the issuance of the Implementation Decree, Article 94 of the TUF established that in the case of requests regarding listed financial products or financial products circulated among the public in a significant manner, Consob could indicate supplementary information to be inserted in the prospectus and specific publication procedures to the offerors within fifteen days as of the presentation of the request; after this deadline the so-called principle of silent consent would apply, and, as a consequence, the prospectus could be published.14 Article 94bis of the TUF now expressly establishes that failure by Consob to issue a decision within the established deadlines shall not constitute approval of the prospectus. The above provision thus introduces a procedure in which silence of the Consob is equivalent neither to an approval, nor to a rejection, giving rise to a rather unusual qualification of administrative behaviour.
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Right of Consob to transfer the approval of the prospectus to another competent authority of an EU state
Article 94bis also grants to Consob the power to demand, in the case of offers relating to EC financial instruments, the approval of the prospectus by a competent authority of another Member State. The issuer and the offeror have only the right to receive, within three business days as of the adoption of the decision, the relevant notice by Consob. The new terms for the approval of the prospectus shall start again from that date onwards. Article 95 of the TUF provides that Consob shall regulate the provisions for the implementation of the section relating to the public offering of financial products with regard to the characteristics of the financial products, the issuers and the markets. The regulation also establishes in particular the conditions for the transfer of approval of a prospectus to the competent authority of another Member State. 125
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Procedure for the approval of the prospectus

Article 94bis of the TUF provides that Consob shall approve the prospectus within the terms established by Consob in observance with the terms of the EC provisions. Indeed, the time frame established by Article 13 of the Prospectus Directive has already been formally implemented by Article 7 of the Issuer Regulation, which provides that the authorisation to publish the prospectus shall be issued: (i) within twenty business days as of the date of receipt of a request for an authorisation, in the event that the investment solicitation (i.e., the offering to the public of financial products) relates to financial instruments which are neither listed nor diffused among the public in a significant manner; (ii) within ten business days as of the date of receipt of the request for an authorisation, in the event that the investment solicitation (i.e., the offering to the public of financial products) relates to financial instruments which are neither listed nor diffused among the public in a significant manner, issued by an issuer which already has financial instruments admitted to trading on a regulated market, or which has offered such instruments to the public. Article 7 of the Issuer Regulation also provides that the request shall take effect from the moment on which the same is received by Consob. However, if the notice is incomplete, Consob shall inform the issuer or the offeror within ten working days, and the request shall take effect from the date on which Consob receives the missing documents or elements. According to Article 7 of the Issuer Regulation, in the event that, due to reasonable grounds, Consob considers that further information is necessary, it shall inform the issuer or the offeror within twenty business days, in the case described under (i) and within ten business days in relation to the deadline described under (ii). The new deadlines shall run from the moment on which Consob receives such information.
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Prospectus composed of several documents

In accordance with Articles 5 and 12 of the Prospectus Directive,15 Article 94 of the TUF allows issuers and offerors to draft the prospectus in unitary form or as distinct documents. In the latter case, the prospectus shall be composed of: (i) a registration document that contains the information about the issuer or the offeror; (ii) an informative note about the financial instruments and products offered; and (iii) a summary containing the risks and essential characteristics of the offering. The obligation to edit the summary shall be particularly significant for cross-border offers, in so far as it could be the only document translated into the language of the host Member State in which the transaction is carried out. Article 6 of the Issuer Regulation introduces an authorisation procedure relating to the registration document. In fact, the issuer is allowed to request a
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separate authorisation to Consob for the publication of the registration document. The informative note on the financial instruments, together with the summary, may be subject to authorisation, if the issuer decides to carry out the offering or the admission to trading on a regulated market. In the case of a prospectus having a tripartite format, the registration document shall have a validity of twelve months starting from the date of authorisation to its publication.
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Contents of the prospectus and language Contents of the prospectus

Article 94 of the TUF establishes that the prospectus must contain, in an easily analysable and comprehensible form, all the information which, according to the features of the issuer and the financial products offered, are necessary to allow investors to make an informed judgment on the assets, financial situation and financial results and prospects of the issuer and the guarantors, as well as on the financial products and the related rights.
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Language
Article 19 of the Prospectus Directive provides that, in the case of an offering to the public of financial products or of listing carried out: (i) only in the home Member State, the prospectus must be drawn up in a language accepted by the competent authority of the home Member State; (ii) in one or more host states, excluding the home Member State, the prospectus must be drafted either in a language accepted by every competent authority of the host states or in a language commonly used in the world of international finance, at the choice of the issuer, the offeror or the person requesting the admission. The competent authorities of each host State shall further only have the right to request the translation of the summary; (iii) in the home Member State and in other Member States, the prospectus must be drawn up in a language accepted by the competent authority of the home Member State and must be made available either in a language accepted by the competent authorities of the host Member State or in a language commonly used in the world of international finance at the choice of the issuer, the offeror or the person requesting the admission. The competent authorities of each host Member State shall furthermore only have the right to request the translation of the summary box. Article 95 of the TUF also establishes that Consob shall regulate the implementation provisions for the section relating to the public offering of financial products with regard to the characteristics of the financial products, the issuers and the markets. The regulation shall also, in particular, establish the language to be used in the prospectus. Pending the issuance of the above regulations, the current language regime for prospectuses is contained in Articles 10 and 10bis of the Issuer Regulation. In 127
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the event that an investment solicitation (i.e., the offering to the public of financial products) is carried out outside Italy and the same is the home Member State, the prospectus may be drafted in a language commonly used in the world of international finance. The competent authority of the host Member State may request a translation of the summary box into the official language of that State. 8.67 Conversely, by way of example, in the event that the offering to the public of financial products is intended to be made in Italy as the host Member State, the prospectus approved by the authority of the home Member State may be drafted either in Italian or in a language commonly used in the world of international finance at the choice of the issuer or of the offeror. In this latter case, the summary box shall be translated into Italian.
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Revocation of subscriptions
Article 95bis of the TUF, by implementing Article 16 of the Prospectus Directive and Article 8(1) of the Prospectus Directive, introduces two cases of revocability of the subscriptions, in case of: (i) failure to include into the prospectus the final offer price and the amount of financial products offered; (ii) publication of a supplement to the prospectus. In the event under point (i) such a right may be exercised within the deadline indicated by the prospectus, and in any case within a deadline of no less than two business days as of when the final offer price and the amount of financial products offered to the public is submitted. In the event of publication of the supplement to the prospectus, the revocation may be exercised within the deadline indicated by the same, which in any case shall not be less than two business days after the date of publication of the supplement. Thus, the revocation of subscriptions allows the investor to re-evaluate whether or not to adhere to the public offering of financial products, based on core information which was not available to the investor at the time on which the decision to subscribe for financial products was adopted. The purpose is to ensure that all the investors make investment decisions on an informed basis and based on the most recent information relating to the issuer.
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Advertisements
Prior to the issuance of the Implementation Decree, the provisions relating to advertisements under Article 101 of the TUF were more stringent than those of the Prospectus Directive. In fact, Article 101 of the TUF, unlike Article 15 of the Prospectus Directive, prohibited any kind of advertising activity preceding the carrying out of a public offering of financial products. This prohibition remains in force today with regard to financial products other than EC financial instruments.
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With regard to the procedures for making announcements, Article 101 of the TUF establishes that they shall be submitted to Consob at the same time, and shall be made according to the criteria established by Consob regulations, in accordance with EC provisions and, in any case, in observance of the accuracy of the information and of its consistency with that contained in the prospectus, if already published, or with the information that shall be included under the prospectus to be published. Article 101 of the TUF further provides that Consob may: (i) suspend, for a period not exceeding ten consecutive16 business days, any further circulation of the advertisement relating to an offering regarding EC financial instruments, in the event of grounded suspicion of infringement of the provisions above or of the related regulatory laws; (ii) precautionary suspend for a period not exceeding ninety days, the further circulation of the advertisement relating to an offering regarding products other than those described under point (i), in the event of grounded suspicion of infringement of the provisions illustrated above, or of the related regulatory laws; (iii) prevent the further circulation of the advertisement, in the event of a confirmed infringement of the legal provisions illustrated above or of the related regulatory laws; (iv) prevent the execution of the offering, in the event of failure to comply with the provisions described under points (i), (ii) and (iii) above. Article 101 of the TUF finally establishes that the relevant information provided by the issuer or the offeror to qualified investors or to special categories of investors, including information communicated during meetings relating to offers of financial products, must be disclosed to all qualified investors or to all the categories of investors to which the offering is directed on an exclusive basis. This provision is intended to guarantee that all the above investors have access to the same core of information in order to decide whether or not adhere to the offering. Article 101 does not indicate what is a relevant information. Thus, Consob shall have to indicate what type of information may be considered as such.
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XI
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In accordance with Article 6 of the Prospectus Directive, Article 94 of the TUF, as modified by the Implementation Decree, contains provisions on the infringement of the rules relating to the draft and contents of the prospectus (the Prospectus Liability). In particular, Article 94 of the TUF provides that the issuer, the offeror and the possible guarantor, as the case may be, as well as any other person who has subscribed the prospectus, shall be liable, with regard to the parts of its own competence,17 for damages suffered by an investor who had reasonably relied on the truthfulness and completeness of the information contained in 129
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the prospectus. The regulation further provides for inversion of the burden of proof, in so far as the above subjects, in order to avoid liability, must demonstrate that they adopted every diligent measure for the purpose of ensuring that the information corresponded to the facts and did not contain omissions which could alter their meaning. 8.78 Article 94 of the TUF also extends liability for false information or omissions which are able to influence the decisions of a reasonable investor to the intermediary responsible for the placement. Also in this case, there is an inversion of the burden of proof, in so far as for the purpose of avoiding any liability with regard to investors the party responsible for the placement must prove that it has adopted every diligent measure in order to ensure that the information corresponded to the facts and did not contain omissions which could alter their meaning. By imposing a burden of proof on the subjects cited above, the Italian legislator extended to the Prospectus Liability the same rules already ratified by Article 23 of the TUF for the case of compensation for losses caused to clients by intermediaries in providing investment services. In this event, intermediaries shall prove that they acted with the specific diligence requested. Article 94 also provides that no subject may be held liable solely for the information contained in the summary, unless this latter is misleading, imprecise or inconsistent, if read together with the other parts of the prospectus. With regard to the statute of limitations within which any actions for compensation may be brought, Article 94 of the TUF provides for a term of five years as of the date of publication of the prospectus, except where the investor proves that the falsity of the information or the omissions was discovered during the two years preceding the initiation of the action.
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XII
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Financial statements of the issuer

Prior to the issuance of the Implementation Decree, Article 96 of the TUF provided that for the purpose of carrying out an investment solicitation, the most recent annual financial statements and the most recent consolidated financial statements of the issuer had to be certified by an auditor. Furthermore, in the event that following the auditing of such financial statements, the auditor had expressed a negative opinion or had declared itself unable to express an opinion on the same, the issuer could not carry out an investment solicitation (i.e., an offering of financial products to the public). The provisions illustrated above were not compatible, however, with the provisions of the schemes attached to the Prospectus Regulation. The Implementation Decree has provided for the deletion of the mentioned obligations with regard to EC financial instruments. Conversely, however, in the case of issuers of
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financial products different from EC financial instruments, the offering to the public of the same cannot be carried out in the event that the most recent annual financial statements and consolidated financial statements of the issuer have not been audited and the auditor has formulated a negative opinion or has declared itself unable to express an opinion.
1
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Offence of falsification of the prospectus

The administrative pecuniary sanctions for the infringement of regulations on the public offering of financial products are contained in Article 191 of the TUF, as amended by the Implementation Decree. In Italy, the falsification of prospectuses is also a criminal offence. Article 173bis of the TUF provides that anyone who presents false information or conceals data in the prospectus requested for an investment solicitation (i.e., for the offering to the public of financial products) or for the admission to listing on regulated markets, or in documents to be published on the occasion of public offers for acquisition or exchange, in such a way as to lead into error the recipients of the prospectus, with the intention of misleading the same recipients and of securing for itself or for others an unfair profit, shall be punished by imprisonment from one to five years. In order to commit the offence of falsification of the prospectus, the party must be aware of the falsity, of the intention to deceive and of the purpose of unfair profit. Finally, the presentation of false information or concealment of data must be able to mislead. Considering the ratio of the rule, aimed at ensuring the transparency and integrity of markets, such a rule does not provide for a quantitative threshold.
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Notes
1. Italian Official Gazette 28 December 2005, No. 301, Ordinary Supplement. 2. Constitutional Court, 2 February 1990, No. 64, and Constitutional Court, 18 April 1991, No. 168. 3. This decision has been clarified by Consob in the Consob Informa newsletter of 25 July 2005, No. 30. 4. The modifications to the Issuer Regulation have been adopted by Consob decision No. 15232 of 29 November 2005. 5. According to the terms of Article 1, paragraph 1, item m) of the TUF, Sicavs and mutual funds are collective investment bodies for savings (UCITS). 6. This Article provides that the indications relating to the price established for the offering and the final size of the same, where not included in the prospectus, shall be published through the supplementary notice established in Article 5, paragraph 2, as soon as such elements are determined. The supplementary notice shall be published with the same procedures used for the prospectus.
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7. 8.
9.
10.
11.
12.
13.
At the same time as its publication, a copy of the notice, together with a reproduction of the same in electronic form, shall be sent to Consob. With regard to the new provisions on responsibility for the prospectus introduced by the Implementation Decree, see Chapter XI. This Article provides that the prospectus shall contain the information which, according to the characteristics of the financial products and the issuers, shall be necessary for allowing investors to make an informed judgment on the asset, economic and financial situation and on the evolution of the activities of the issuer, as well as on the financial products and their associated rights. F. Annunziata, La Disciplina del Mercato dei Capitali [The regulation of capital markets], Giappichelli Editore, Torino, 2004, and R. Costi L. Enriques Il Mercato Mobiliare [The Securities Market], in Trattato di Diritto Commerciale [Treatise on Commercial Law], Volume VIII, CEDAM, Padova, 2004. Prior to the issuance of the Implementation Decree, according to the terms of Article 1, paragraph 1, item t) of the TUF, investment solicitation had the following meaning: any offering, invitation to an offering or promotional message intended for the public in any form, and aiming at the sale or subscription of financial products, including the placement among subjects authorised to provide investment services. This circumstance is confirmed by Consob, which in Notice No. DEM/68995 of 18 September 2000 and No. DIS/43280 of 2 June 2000, observed that: for the purposes of qualification of an offering, invitation to an offering or promotional message as a case of an investment offering, the same had to have the objective of sale or subscription of financial products. According to the terms of the cited Article (notwithstanding the fact that the regulation refers to qualified operators, it is considered that the same nevertheless constitutes the supplementary provision of the cited item a) of the TUF), qualified operators means: (i) authorised intermediaries; (ii) asset management companies; (iii) SICAVs; (iv) pension funds; (v) insurance companies; (vi) foreign subjects carrying out the activities of the above subjects, by virtue of the laws in force in their own origin country; (vii) companies and entities issuing financial instruments traded in regulated markets; (viii) companies registered with the lists described in Articles 106, 107 and 113 of Legislative Decree No. 385 of 1 September 1993; (ix) financial promoters; (x) individuals providing evidence of having the professional requirements established by the Consolidated Act for subjects carrying out administrative, management and control functions within securities intermediation companies; (xi) banking foundations; (xii) as well as any company or legal person having specific competence and experience with transactions involving financial instruments, expressly declared in writing by the legal representative of the same. We note that at present, the regulatory discipline for implementation of the aforementioned provisions is contained in Articles 33 and 57 of the Issuer Regulation. Hence, until Consob does not issue the new regulatory provisions, we consider that the regulations currently in force should continue to be applied.
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14. As far as we are aware, no issuer/offeror has ever made use of such a regulatory provision. 15. We point out that the cited Articles of the Prospectus Directive had already been implemented by Article 6 of the Issuer Regulation. 16. We indicate that in the old formulation of Article 101, the right of suspension could be exercised for not more than ninety days. 17. The right to limit liability solely to the parts of respective competence is directly provided by the schemes attached to the Regulation of 29 April 2004.
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9 Malta
L ou i s De Ga br i e l e
Camilleri Preziosi Advocates
II III
IV
V VI
VII VIII
IX X XI XII XIII
A dual approach: the Companies Act and the Listing Rules 1 The Companies Act 135 2 The Listing Rules 136 The central competent administrative authority 136 Definition of a public offer 136 1 Definition 136 2 Exemptions 137 3 Further exemptions 137 4 Collective investment schemes 138 Approval of a prospectus 138 1 Principle 138 2 Exception to the home country Principle 139 Single European passport 140 The prospectus 141 1 Content 141 2 Format 141 3 Supplements 141 4 Language 141 Publication 142 Advertisements 143 1 General 143 2 Investment Services Act 144 Appeal 144 Prospectus liability 144 Non-EU and non-EEA issuers and the use of prospectuses approved in non-EU and non-EEA countries 145 Sanctions 145 Conclusion 146
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I
9.1 134
A dual approach: the Companies Act and the Listing Rules

The Prospectus Directive was transposed into Maltese law as part of an intensive initiative taken by the Maltese authorities on the legislative financial
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services front following Maltas accession to the European Union (the EU) in May 2004. Since the Prospectus Directive is a maximum harmonisation directive, the Maltese authorities enjoyed limited flexibility in achieving the Prospectus Directives objectives. As a result, the Maltese provisions implementing the Prospectus Directive substantially reflect the wording of the Prospectus Directive. 9.2 The Maltese legislative and regulatory framework, prior to the transposition of the Prospectus Directive, distinguished between a prospectus pursuant to which an offer of securities is made to the public and an admission document pursuant to which the securities of an issuer would be admissible to trading on a stock exchange. Whilst the former was regulated by the Companies Act (Cap. 386 of the Laws of Malta) (CA), the latter were regulated by the Listing Rules promulgated by the Listing Authority under the Financial Markets Act (Cap. 345 of the Laws of Malta) (FMA). Notwithstanding the convergence between the two sets of rules introduced by the Prospectus Directive, the implementation of the Prospectus Directive in Maltese law has retained this dichotomy, with the CA as the law regulating a prospectus offering securities to the public where no application is made for the securities so offered or issued to be admitted to a regulated market and the Listing Rules acting as the point of reference in circumstances where an application is made to the Listing Authority for securities to be admitted to trading on a regulated market. Accordingly, the Prospectus Directive has brought about significant amendments to both the CA and the Listing Rules .
1
9.3
The Companies Act

Pursuant to Legal Notice 391 of 2005, a number of provisions of the CA were amended including, but not limited to, the definition of an offer of securities to the public and the relevant exemptions thereunder. The same legal notice also introduced and amended, where applicable, the substantive provisions on the requirement to draw up a prospectus, the penalties for the non-compliance therewith, the civil liability attached to the issuance of a prospectus, the registration requirements and the interpretative provisions. The Second Schedule of the CA was also amended by virtue of Legal Notice 390 of 2005. Part A of the Schedule prescribes what must be specified in a prospectus which is issued by a company incorporated in a Member State (or EEA State). Part A was used to transpose most parts of the Prospectus Directive and states the requirements for the prospectuss approval and publication. Part B deals with prospectuses of an overseas company constituted in a jurisdiction other than a Member State (or an EEA State) and which offer securities to the public in Malta. The Schedule also incorporates by reference the Prospectus Regulation . 135
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2
9.4
The Listing Rules

The Listing Rules regulate issuers whose securities are, or are in the process of being made, admissible to listing on a recognised investment exchange in Malta. The Listing Rules have also been amended to transpose the requirements of the Prospectus Directive with respect to the contents of a prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements .
II
9. 5
The central competent administrative authority

The Malta Financial Services Authority (the MFSA), acting through the Registrar of Companies (the Registrar) is Maltas central competent administrative authority responsible for supervising compliance with the provisions of the Prospectus Directive. The Registrars powers are listed in the Companies Act (The Prospectus) Regulations.1 In the case of offers to the public where listing or an application for listing is involved, the MFSA acts through the Listing Authority .
III 1
9.6
Definition of a public offer Definition

Prior to the implementation of the Prospectus Directive, a public offer was defined as an offer made to the public generally and then provided for a number of safe harbours that exempted an offer from the rigours of a public offer and accordingly from the requirement of a prospectus. The implementation of the Prospectus Directive required substantial changes to this definition. Article 2(3)(a) of the CA now defines a public offer as a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe to these securities. This definition is also applicable to the placing of securities through financial intermediaries. This definition replicates the Prospectus Directives definition. In substance, the net effect is not quite different from the position obtained prior to the implementation of the Prospectus Directive but the implementation of the exemptions under the Prospectus Directive have signified a critical change to Maltas regulatory scheme with regards to what does not constitute a public offering. Indeed, the structure has remained the same where all offers of securities to the public, except for the exemptions discussed in 2 and 3 below, whether made by listed or non-listed companies, require the issuance and publication of a prospectus .
136
Malta
9.8
2
9.7
Exemptions
The CA contains the exemptions found under the Prospectus Directive that exempt an offer of securities from being a public offer with the consequence that no prospectus is necessary in those specific instances. Article 2(3) of the CA replicates the exemptions found under Article 3(2) of the Prospectus Directive. The proviso to the exemptions found in the Prospectus Directive can also be found in the CA. Moreover, the CA also exempts from the obligation to publish a prospectus the exemptions found in Article 1(2)(h) of the Prospectus Directive2 and in Article 1(2)(j) of the Prospectus Directive.3 In these cases, an offeror has the right, but not the obligation, to draw up a prospectus in accordance with the provisions of Part A of the Second Schedule to the CA.
3
9.8
Further exemptions
The CA also exempts a number of transactions and securities from the provisions of Chapter III of the CA, which partly implements the Prospectus Directive, including the obligation to draw up a prospectus. Article 89 of the CA exempts a form of application issued: (i) in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures; or (ii) an offer where the shares are offered for no consideration and is made exclusively to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; or (iii) an offer where shares are allotted to existing or former directors or employees by their employer which has shares already admitted to trading on a recognised investment exchange or by an affiliated undertaking, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; or (iv) shares issued on the redemption or reduction of shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued capital; or (v) an offer made in connection with a takeover bid, provided that a document is available containing information which is regarded by the Registrar as being equivalent to that of the prospectus; or (vi) an offer made in connection with or pursuant to a proposed merger, provided that a document is available containing information which is regarded by the Registrar as being equivalent to that of the prospectus . 137
9.9
4
9.9
Collective investment schemes

Article 89 of the CA also exempts issues by a holder of a collective investment scheme licence within the meaning of the Investment Services Act (ISA), provided such issue is made in accordance with rules or regulations made under that Act. The ISA provides that a collective investment scheme, whether licensed or not, is prohibited from issuing or causing to be issued a prospectus in or from Malta unless the prospectus has been approved by the MFSA. Prior to the implementation of the Prospectus Directive, the Investment Services Act (Prospectus of Collective Investment Schemes) Regulations 1996 contained detailed provisions regulating the issuing of prospectuses by such schemes. These regulations were repealed and replaced following the implementation of the Prospectus Directive. The Investment Services Act (Prospectus of Collective Investment Schemes) Regulations4 is divided into three parts dealing with Malta-based schemes, European and non-European based schemes and a number of miscellaneous provisions. These Regulations regulate all prospectuses of collective investment schemes, including those that fall outside the scope of the Prospectus Directive. It is important to note that the Investment Services Act (Prospectus of Collective Investment Schemes) Regulations do not transpose all the provisions of the Prospectus Directive. Other additional and detailed requirements of the Prospectus Directive are found in the Investment Services Guidelines An offer to the public made by a collective investment scheme where listing is involved is regulated by the Listing Rules .
IV 1
9.10
Approval of a prospectus Principle

A prospectus for a public offering requires approval from the Registrar. However, where an issuer of securities to the public is listed or is in the process of listing on a regulated market in Malta, the prospectus must be prepared in accordance with the Listing Rules and must be submitted for approval to the Listing Authority. In concordance with the home country principle embraced by the Prospectus Directive, the Registrar or the Listing Authority will not approve a prospectus unless he is satisfied that Malta is the home Member State in relation to the issuer of the securities to which it relates and the prospectus has been drawn up in accordance with the provisions of the CA and of Part A of the Schedule to the CA or the Listing Rules. The Registrar or the Listing Authority is then required to notify the issuer or the offeror, as the case may be, of his decision regarding the approval of the prospectus within ten working days of the submission of the draft
138
Malta
9.11
prospectus. This time limit will be extended to twenty working days if the public offer involves securities issued by an issuer who has not previously offered securities to the public or who does not have any securities admitted to trading on a regulated market and who has not previously offered secur ities to the public. If the Registrar or the Listing Authority finds, on reasonable grounds, that the documents submitted are incomplete or that supplementary information is needed, the time limits will apply only from the date on which such information is provided by the issuer or the offeror. The Registrar or Listing Authority is required, within ten days from the submission of the application, to notify the issuer if the documents are incomplete. Nevertheless, the failure by the Registrar or Listing Authority to give a decision within the appropriate time limit does not constitute an approval of the prospectus . According to the Second Schedule and the Listing Rules, a prospectus must contain all the information necessary, according to the particular nature of the issuer and of the securities, to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the issuers and of any guarantor, and of the rights attaching to such securities. The information must be presented in an easily analysable and comprehensible form. Furthermore, the Listing Rules require the prospectus to be signed by every director of the company. This is replicated by similar provisions in the CA; however, the latter contemplates the possibility of an agent authorised in writing to sign on behalf of the said directors .
2
9.11
Exception to the home country principle

An exception is, however, made for issues of non-equity securities whose denomination per unit amounts to at least 1,001.635 (or nearly equivalent to this amount in another currency) and for any issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer. In such a case, the home Member State is the Member State where the issuer has its registered office, or where the securities were offered to the public. Thus, issuers are entitled to have the prospectus approved by the authority of the country in which the admission to trading or the public offer is to take place. Such issuers are entitled to apply for approval of the prospectus to the authority of the country in which the admission to trading or the public offer is to take place . 139
9.12
V
9.12
Single European passport

The Listing Rules and the CA provide for the exercise of passport rights, introduced by the Prospectus Directive, where a prospectus has already been approved in an EU (or an EEA) Member State and for the validity of a Malta approved prospectus in other EU (or EEA) Member States. If Malta is the home Member State and the securities are offered in one or more Member States, other than Malta or EEA States, the prospectus approved by the Registrar and any supplements thereto shall be valid for an offer to the public in any number of host Member States or EEA States, provided the regulatory authority of the host Member State or EEA State (the host regulatory authority) is notified. In fact, the Registrar is to provide the host regulatory authority, at the request of the issuer or the person responsible for drawing up the prospectus, and within three working days following that request or, if the request is submitted together with the draft prospectus, within one working day after the approval of the prospectus, with a certificate of approval and a copy of the prospectus as approved . If there is the need, this notification shall be accompanied by a translation of the summary of the prospectus produced under the responsibility of the issuer or person responsible for drawing up the prospectus. The same procedure shall be followed for any supplement to the prospectus. The process of notification is considered to be essential. In fact a prospectus which has been approved by the regulatory authority of another Member State (or an EEA State) is not deemed to be an approved prospectus unless that authority has provided the Registrar with a certificate of approval and a copy of the prospectus as approved together with, where requested by the Registrar, a translation into English or Maltese of the summary of the prospectus . The certificate of approval is a statement confirming that the prospectus has been drawn up in accordance with the Prospectus Directive, that the prospectus has been approved, in accordance with the Prospectus Directive, by the Registrar or the regulatory authority of the Member State or EEA State, as the case may be, providing the certificate, and, where applicable, of the reasons as to why the Registrar or the regulatory authority providing the certificate authorised the omission, in accordance with the Prospectus Directive, from the prospectus of information which would otherwise have been included. The procedure set out above should also apply where an issuer of securities to the public is listed or is in the process of listing on a regulated market in a Member State (or EEA State). In such a case, it is the Listing Authority and not the Registrar that carries out the process of notification and issues the certificate of approval .
140
Malta
9.16
VI 1
9.13
The prospectus Content

The prospectus must contain all the information necessarily required for an investor to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities. The required information to be submitted in the prospectus varies according to the nature and circumstances of the issuer and the type of securities involved. On the basis of the dual approach described in I above, the requirements are found in Chapter 66 of the Listing Rules and in paragraph 5 of the Second Schedule of the CA. It is important to note, however, that the Listing Rules provide that the description of the required information made in such a prospectus is indicative and does not seek to replace the Prospectus Regulation. Indeed, it has been the practice in Malta that practitioners actually refer to the building blocks of the Prospectus Regulation in preparing a prospectus rather than the local rules .
2
9.14
Format
Maltese law mirrors the Prospectus Directive in offering issuers a choice as to the format of the prospectus. Accordingly, a prospectus may be drawn up either as a single document (which must include a summary) containing all the requisite information, or as a three-part prospectus composed of separate documents which will be divided into: (i) a registration document with information on the issue; (ii) a securities note; and (iii) a summary note. Provision is also made in the CA and the Listing Rules for the less comprehensive base prospectus as defined in the Prospectus Directive .
3
9.15
Supplements
The CA and the Listing Rules provide for the information given in the base prospectus to be supplemented by a supplement to be drawn up and published in the situations and in the manner listed in Article 16(1) of the Prospectus Directive.7 It is important to note that if the final terms of the offer are not included in either the base prospectus or a supplement, the final terms shall be provided to investors and filed with the Registrar in the case of an offer to the public .
4
9.16
Language
Maltese and English are the official languages in Malta and accordingly the Listing Rules8 and the CA9 provide that where the offer is going to be made in more than one Member State (or EEA member), including Malta,
141
9.16
the prospectus must be made in English or Maltese and must also be made available, either in a language accepted by the regulatory authorities of each host Member State (or EEA State), or in a language customary in the sphere of international finance, at the choice of the issuer or offeror. On the other hand, when securities are offered to the public in one or more Member States or EEA States excluding Malta, the Listing Rules10 and the CA11 state that the prospectus shall be drawn up either in a language accepted by the regulatory authorities of those Member States or EEA States or in a language customary in the sphere of international finance, at the choice of the issuer or offeror. However, for the purpose of scrutiny by the Listing Authority, the prospectus must, at the choice of the issuer or offeror, be drawn up in English, Maltese or any other language customary in the sphere of international finance . The Listing Rules12 adds that where admission to trading on a regulated market of non-equity securities whose denomination per unit amounts to at least 50,000 is sought in one or more Member States (or EEA States), the prospectus shall be drawn up, either in a language accepted by the regulatory authorities of the home and host Member States (or EEA States), or in a language customary in the sphere of international finance, at the choice of the issuer or person asking for admission to trading .
VII
9.17
Publication
The CA (Art. 99) provides that the allotment or sale of any shares in or debentures of a public company in pursuance of a prospectus, and any proceedings taken on applications made in pursuance of a prospectus, shall only be made until at least the beginning of the sixth working day (or such later time, if any, as may be specified in the prospectus) after the publication in a daily newspaper circulating wholly or mainly in Malta of a notice stating that a prospectus has been issued, indicating therein where the issuer or offeror has made available, free of charge, a paper copy of the full prospectus . In respect of listed companies, Chapter 7 of the Listing Rules provides that, once approved, the prospectus must be filed with the Listing Authority and must be made available to the public by the applicant no later than six working days before the relevant securities are admitted to trading. Furthermore, a prospectus must be available at least six working days before a primary offer opens. Any prospectus approved by the Listing Authority must be registered with the Registrar . The Listing Authority shall insert on its website any note stating that the prospectus has been published and is available at the issuers registered office. The Listing Authority is also required to publish on its website over a period of twelve months, at its choice, all the approved prospectuses .
142
Malta
9.18
In the case of a prospectus comprising several documents and/or incorporating by reference, the documents and information making up the prospectus may be published and circulated separately provided that the said documents are made available to the public, free of charge . Each document must indicate where the other constituent documents of the full prospectus may be obtained. The text and the format of the prospectus, and/or the supplements to the prospectus, made available to the public, shall at all times be identical to the original version approved by the Listing Authority . Where the prospectus is made available by publication in electronic form, a hard copy must nevertheless be delivered to the investor, upon his request, free of charge, by the issuer, the person asking for admissibility to listing or the financial intermediaries placing or selling the securities .
VIII 1
9.18
Advertisements General
The Companies Act (The Prospectus) Regulations13 and the Listing Rules14 provide the requirements for advertisements relating to offers of securities to the public. Advertisements must be clearly recognisable as such and the information contained in the advertisement must not be inaccurate or misleading and must be consistent with the information contained or to be contained in the prospectus. The advertisement must also contain a statement that a prospectus has been or will be published and the addresses and times at which copies of the prospectus are or will be available to the public. It is also important that the information concerning the offer to the public (disclosed in oral or written form) must be consistent with that contained in the prospectus. Where Malta is the home Member State and the advertising activity involves an offer of securities to the public, the Companies Act (The Prospectus) Regulations provide that the Registrar has the power to exercise control over the advertisements compliance with the law. The Regulations also impose disclosure of material information provided by an issuer or an offeror, including information disclosed in the context of meetings relating to offers of securities, to all qualified investors or special categories of investors to whom an offer is exclusively addressed, despite the exemption from publication of a prospectus. If, however, a prospectus is required to be published, such information is to be included in the prospectus or in a supplement to the prospectus. In the case of companies admissible or applying for admissibility to listing, an advertisement issued for the purpose of announcing an offer where a prospectus is required by the Listing Rules must seek the Listing Authoritys authorisation prior to its publication. 143
9.19
2
9.19
Investment Services Act

In terms of the Investment Services Act (Cap. 370 of the Laws of Malta), an investment advertisement may not be issued in or from within Malta unless its content has been approved by a holder of an investment services licence. A problem may arise since the definition of an investment advertisement excludes a prospectus issued by a company in terms of the CA. Under Article 2 of the CA, the term company is defined as any company formed and registered in accordance with the CA. Prima facie, this may create a doubt as to whether a prospectus issued by a company which has not been formed and registered in terms of the CA is exempt from the above-mentioned approval. From informal discussions with the Registrar, it appears, however, that the term prospectus in the investment advertisement definition would also include a prospectus issued by a company which, although not incorporated under the CA, has issued its prospectus in terms of the Prospectus Directive . On this basis, it appears that the approval of an investment services licence holder with respect to such a prospectus is not necessary .
IX
9.20
Appeal
In line with Article 26 of the Prospectus Directive, decisions taken by the Registrar in respect of any matter concerning the prospectus or an offer to the public are subject to a right to appeal to the Financial Services Tribunal.15
X
9.21
The CA (Art. 94) reflects Article 6 of the Prospectus Directive when providing that liability for the information in the prospectus attaches to all persons responsible for it. In fact, civil liability for misstatements in the prospectus attaches jointly and severally to the persons who are responsible for or who have authorised the issue of a prospectus in case damage is sustained by a person subscribing for shares or debentures on the faith of that prospectus, by reason of any untrue statement included therein. The CA, however, excludes an expert being held liable for any such damage, unless the expert has made an untrue statement in the prospectus. Furthermore, a person will not be held liable provided he proves that, up to the time of the allotment of the shares or debentures, either he had reasonable grounds to believe and did believe that the statement was true, or that any untrue statement made by an expert was made by a person competent to make such a statement. The CA further provides that if such a person on becoming aware of the untrue statement before any allotment is made under the prospectus gives reasonable public notice of the untruthfulness of the statement, he will not be liable.
144
Malta
9.23
Since the summary is only meant to be read as an introduction, and not in conjunction, to the other parts of the prospectus, the Prospectus Directive obliges Member States to ensure that no civil liability attaches to any person solely on the basis of the summary (including any translation thereof unless it is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus. In almost identical wording, a proviso was introduced in the CA providing that no person shall be liable for statements made in the summary (including the translation thereof), except when such statements are untrue when read together with the other parts of the prospectus . The Second Schedule16 and the Listing Rules17 also contain a provision requiring the summary to contain a warning that civil liability attaches to those persons who have tabled the summary including any translation thereof, and applied for its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus .
XI
9.22
Non-EU and non-EEA issuers and the use of prospectuses approved in non-EU and non-EEA countries
Part B of the Second Schedule deals with prospectuses of an overseas company constituted in a jurisdiction other than a Member State or an EEA State and specifies what a prospectus from a non-EU country should contain in order for it to be approved. Part 1 refers to the matters which must be specified in the prospectus. The requirements are based on those found in the Prospectus Directive and their aim is to bring prospectuses created outside the EU or EEA in line with the European Standards established by the Prospectus Directive .
XII
9.23
Sanctions
As required by Article 25 of the Prospectus Directive, the CA ensures that the appropriate measures may be taken or administrative sanctions may be imposed against the persons responsible in case the provisions adopted in the implementation of the Prospectus Directive have not been complied with in Article 91. Every person responsible for issuing, circulating or distributing a prospectus or for the issue of a form of application for shares or debentures in contravention of the provisions of the CA is liable to a penalty. Under the CA, the Registrar has the duty to recover penalties due under such Act. An exception is granted if the person responsible for the prospectus proves that he was not aware of any undisclosed matter, or that the contravention was a result of an honest mistake of fact on his part, or that the contravention regarded a matter which, in the courts opinion, were immaterial or should be reasonably excused. The CA further imposes a penalty on every person who is knowingly a part of the issue, if a statement in a prospectus purporting to be made by an expert 145
9.24
is not made with the experts written consent, such consent being recorded in a statement in the prospectus. Another penalty is imposed on everyone responsible for the issue, if the registration procedure set out in Article 93(1) of the CA is not followed. The Registrar will register the prospectus upon receipt of a copy, signed by every person named therein as a director of the company or his agent authorised in writing, and once he is satisfied that the requirements under Chapter III of the CA and the Second Schedule to the CA have been complied with. A penalty shall be imposed for every day from the date of issue of the prospectus until a copy is delivered .
XIII
9.24
Conclusion
The transposition of the Prospectus Directive into Maltese law has resulted in a number of amendments to the CA and the Listing Rules, and to the publishing of legal notices under a number of Acts. The dual approach taken by the legislator has ensured that issues where listing is involved and where listing is not involved are each governed by separate legislative instruments. Nevertheless, some inconsistencies that have arisen, such as the lack of clarity in the definition of investment advertisement (discussed in VIII2 above) require the legislators intervention, notwithstanding any informal clarifications that may be given to practitioners by the Registrar when faced with such legal ambiguity. However, the implementation of the Prospectus Directive, in particular the introduction of the passporting regime for prospectuses, continues to strengthen the legal framework in place for Malta to continue to register successes as a European financial services centre .
Notes
1. Subsidiary Legislation 386.11. 2. Offers where the total consideration of the securities offered does not exceed 2,500,000, which limit shall be calculated over a period of twelve months. 3. Offers in respect of non-equity securities issued in a continuous or repeated manner by credit institutions where the total consideration of the offer over a period of twelve months is less than 50,000,000, provided that these securities are not subordinated, convertible or exchangeable and do not give a right to subscribe to or acquire other types of securities and they are not linked to a derivative instrument. 4. Subsidiary Legislation 370.04. 5. The values vary slightly from those found in the Prospectus Directive as a result of their conversion from Maltese lira to euro following Maltas adoption of the euro as its currency on 1 January 2008.
146
Malta
9.24
6. Rules regulating prospectuses under the Listing Rules fall under three separate chapters. Chapter 5 deals with the prospectus in general, Chapter 6 deals with the contents of the prospectus, while Chapter 7 deals with the authorisation the admissibility, the application procedures, publication and circulation of the prospectus. A working group is currently studying the possibility of streamlining and simplifying the legal regime governing a prospectus under the Listing Rules . 7. Paragraph 26, Second Schedule, Companies Act; and Listing Rules 5.135.16. 8. Listing Rule 6.11. 9. Paragraph 29, Second Schedule, Companies Act. 10. Listing Rules 6.10. 11. Paragraphs 28, Second Schedule, Companies Act. 12. Listing Rules 6.12. 13. Prospectus Regulation 5, Subsidiary Legislation 386.11. 14. Listing Rule 7.19. 15. The Financial Services Tribunal is constituted in terms of Article 21 of the Malta Financial Services Authority Act (Cap. 330 of the Laws of Malta). The Tribunal and its statutory functions were modelled on a similar tribunal established by the Financial Services Act 1986 of the United Kingdom . 16. Paragraph 5, Second Schedule, Companies Act. 17. Listing Rule 6.2.4.
147
10 Romania
I u l i a na C r a ic i u
Musat & Asociatii
I II III
Introduction 148 Competent authority 149 Prior approval and appeal procedures 150 1 Offering of securities to the public 150 A Procedure 150 B Exemptions 151 2 Admission to trading on a regulated market 151 A Procedure 151 B Exemptions 151 IV Content and format, language and supplements of the prospectus 152 1 Content 152 2 Format 153 3 Supplements 153 4 Language 153 V Publication and advertisements 154 1 Method of publication 154 2 Advertisements 154 VI Use of a prospectus approved in other (non-EU and non-EEA) countries 155 VII Measures and sanctions 155 VIII Prospectus liability 157 IX Rules applicable to transactions and securities not subject to the Directive and Regulation 158 X Conclusion 158
I
10.1
Introduction
In Romania, the Prospectus Directive has been implemented by Capital Markets Law No. 297 of 28 June 2004, as amended to date (the Capital Markets Law, or Law 297/2004), at the level of primary legislation, which entered into force and effect on 29 July 2004. The implementation was subsequently completed via two secondary enactments, namely National Securities Commission Regulation No. 1 of 9 March 2006 regarding issuers and securities transactions
148
Romania
10.6
(Regulation 1/2006) and National Securities Commission Regulation no. 31 of 14 December 2006 for completion of certain regulations issued by the National Securities Commission for implementing certain provisions of the European directives (Regulation 31/2006). Regulation 1/2006 entered into force on 6 April 2006, while Regulation 31/2006 entered into force on 4 January 2007. In addition, the national supervisory authority in capital markets, the National Securities Commission (NSC), issued a short note on the international public offering of securities in accordance with the Prospectus Directive, which stands as a recommendation. 10.2 Prior to the implementation of the Prospectus Directive, the offering of securities was regulated by the Emergency Government Ordinance no. 28/2002 on securities, financial investment services and regulated markets, pursuant to which no passporting was available, since at that time Romanias prospects of becoming an EU Member State were yet to be defined. The rules governing the publication of a prospectus in the event of a public offering of securities or a request for admission to trading on a regulated market are laid down in the Capital Markets Law and are detailed in Regulation 1/2006 and Regulation 31/2006. These enactments distinguish between two types of public offerings: (i) the sale offering; (ii) the purchase/takeover offering. 10.4 The current applicable Romanian legal framework solely provides rules concerning the public offering of securities. However, public offering of other financial instruments remains a grey area, not clearly regulated.
10.3
II
10.5
Competent authority
The competent authority for the approval of prospectuses in Romania is the NSC. More particularly, with respect to the public offering of securities, NSC is competent to approve: (i) the public offering of securities on the Romanian territory; (ii) admissions to trading on Romanian regulated (and unregulated) markets; (iii) the public offering of securities which takes place on the territory of another Member State of the European Economic Area in the event Romania is the home Member State; (iv) admissions to trading on a regulated market of another Member State of the European Economic Area in the event Romania is the host Member State.
10.6
Where Romania is not the host Member State, the NSC transfers its authority to approve the prospectus to the relevant authority of the host Member State, subject to the latter notifying the NSC with respect to approval of the prospectus in line with the Prospectus Directive and provision of a copy of 149
10.6
the report. In the event the prospectus is amended (e.g., as a result of initial information included in the prospectus being modified), the NSC must be notified accordingly, and in that case the NSC may require the competent authority from the host Member state to include additional information in the offering prospectus.
III 1
A

Procedure
10.7
In order to offer securities to the public in Romania or to have securities admitted to trading on a regulated market, a prospectus must be approved by the NSC or by the competent authority of another Member State in accordance with the Prospectus Directive (Art. 17). The procedure set forth in the Prospectus Directive, as discussed in the general report, has been implemented by the Capital Markets Law and the secondary legislation issued by the NSC. In brief, the offering of securities to the public where Romania is a host Member State is commenced with the prospectus being filed with the NSC along with additional information and documents depending on the public offering purpose (e.g., draft press release concerning the public offering, in case of takeover public offering evidence of the public offering bond, i.e., bank deposit of a minimum of thirty per cent of the total offering value or bank letter of guarantee for the full public offering value, price statement, etc.). The NSC must approve or reject the prospectus within ten business days after receipt of the prospectus and related approval request. The above deadline is extended to twenty business days if NSC has not reviewed a prospectus for the offeror or issuer relating to a public offering or admission to trading on a regulated market before. Nonetheless, request of the NSC for more information or documents suspends the deadlines mentioned above. As per the legal provisions in force, the NSCs approval of the prospectus is solely an acknowledgement of the prospectus being in line with the applicable legal requirements and is not a guarantee or assessment of the public offerings opportunity, advantages and shortcomings, possible profits and risks. If the prospectus is rejected (or not approved within the statutory deadline), the applicant may file a claim with the Administrative Disputes and Litigation Section of the Bucharest Court of Appeal, seeking the Court to compel the NSC to approve the prospectus. In case the Bucharest Court of Appeal dismisses the motion, the applicant is entitled to file a second appeal with the Administrative Disputes and Litigation Section of the High Court of Cassation and Justice against the Bucharest Court of Appeals decision.
10.8
10.9
10.10
150
Romania
10.13
Exemptions
10.11
The Capital Markets Law provides as exceptions from the mandatory character of the publication of a offering prospectus, the exemptions set forth in Articles 3(2) and 4(1) of the Prospectus Directive,1 including, inter alia, the following: (a) the offering of securities made exclusively to the qualified investors; (b) the offering of securities made to less than 100 investors, individuals or legal persons which are not qualified investors; (c) the offering of securities in relation to a merger; (d) the offering of securities to existing or former directors or employees by an undertaking affiliated with the employer, provided these securities are of the same class as the securities already admitted to trading on a regulated market, subject to a simplified prospectus being made available; and (e) the offering of securities in exchange for other securities being the object of another public offering of purchase/takeover/exchange, subject to a simplified prospectus being made available for each issuer and securities categories. All exemptions are admissible, subject to a simplified prospectus being made available to the relevant investors.2 Romanian law also provides for a new exemption from publication, in addition to the ones set forth in Article 4(1) of the Prospectus Directive, namely the offering of shares in relation to change of the share capital, other than the increase of share capital by contribution in cash, by gratuitous allotment of shares to existing shareholders or by dividends paid by issuance of new shares of the same type as the shares for which dividends are being paid, subject to a simplified prospectus being made available.
2
A

Procedure
10.12
Securities may be admitted to trading on a regulated market provided that a prospectus has been approved by the NSC or the competent regulator of another Member State. The procedure to request, obtain approval of and challenge NSC decisions concerning the prospectus is the same as the procedure applicable to a public offering (see nos. 7 through 10 of this chapter).
Exemptions
10.13
Regulation 1/2006 provides for exemptions to the obligation to publish a prospectus for the admission to trading on a regulated market of certain categories of securities, which mirror those set forth in Article 4(2) of the Prospectus Directive.3 However, Romanian law also provides for an additional exemption from publication, namely the admission to trading of shares in relation to 151
10.13
change of the share capital, other than the increase of share capital by contribution in cash, by gratuitous allotment of shares to existing shareholders or by dividends paid by issuance of new shares of the same type as the shares for which dividends are being paid, subject to a simplified prospectus being made available.
IV 1
10.14

Under Romanian law, it is a general requirement that prospectuses contain information sufficient and necessary, taking into account the nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, to enable the investors to make an informed assessment of: (i) the assets and liabilities; (ii) financial position; (iii) financial results (profit and loss); and (iv) prospects of the offeror, issuer and any guarantor and of the rights attached to such securities. As provided for in the Capital Markets Law and Article 11 of the Prospectus Directive, the NSC can also permit the incorporation of information by reference in the prospectus. Prospectuses of public offerings where Romania is a host Member State must be drawn up in compliance with the Regulation, as well as applicable Romanian law provisions, while prospectuses of public offerings passported in Romania must be made in compliance with the Prospectus Directive. However, a prospectus can be drawn up in accordance with the national law of an issuer not having its registered office in the European Union Area if: (i) the information incorporated in the prospectus is equivalent to the requirements of the national and international standards; and (ii) the prospectus is drawn up in accordance with international standards set by international securities commission organisations. The Romanian Capital Markets Law also provides that any amendment to the offer shall be prior approved by the NSC and any amendment made with the observance of such provisions shall be deemed null and void. The prospectus validity shall be of twelve months further to the publication and it may be used for subsequent issuance of securities, provided that any amendment to the initial offer is prior approved by the NSC. As a rule, the price and number of securities object of the public offering must be provided for in the prospectus. If such information is not mentioned, the prospectus must provide at least the conditions and criteria for price establishment. As a rule, subscriptions within public offerings are irrevocable. However, subscribers are allowed to withdraw their acceptance of the offer or subscription within a period of three business days from either: (i) the date of establishment
10.15
10.16
10.17
10.18
10.19
152
Romania
10.24
of the price and number of securities subject to the public offering, if these were not available in the prospectus; or (ii) the date of publication of a prospectus amendment. Withdrawal is to be notified to the leading public offering intermediary.
2
10.20
Format
The prospectus can, at the offerors or issuers discretion, be drawn up as a single document or as three separate documents. A prospectus consisting of three separate documents includes: (i) an offer or presentation document (with information relating to the issuer); (ii) a securities presentation note (with information relating to features of the securities to be offered or admitted to trading); and (iii) a summary of the prospectus. Listed companies which intend to make multiple offerings within a single year may request NSC to approve a public offering schedule. In this case, when a public offering is envisaged, only the securities note and summary need be prepared, and only if changes or recent developments have occurred the issuer presentation note needs to be updated. As per NSC Regulation 1/2006, for the public offering or admission to trading of certain types of securities (such as non-equity securities, including warrants in any form issued under an offering programme, or non-equity securities issued in a continuous or repeated manner by credit institutions), the prospectus can, at the choosing of the issuer, offeror or person requesting admission to trading on a regulated market, consist of a base prospectus containing all relevant information about the issuer and the securities offered or to be admitted.
10.21
10.22
3
10.23
Supplements
In the event that a significant factor occurs in the period between approval of the prospectus and the close of the offer or the admission to trading, the issuer (or offeror) must prepare a supplement to the prospectus. This supplement must be prior approved by the NSC and where a publication exemption is not applicable, made public in a manner similar to the initial prospectus. Supplements must not create for investors a less favourable position.
4
10.24
Language
As a rule, the prospectus should be prepared in Romanian and, in the case of a cross-border public offering, another widely used language. The summary must be also prepared in Romanian, unless the press releases and/or prospectus were drafted and approved under a different EU Member State jurisdiction and using a widely used language of that jurisdiction, in which case the summary need only be prepared in that language. 153
10.25
V 1
10.25

The prospectus must be made available to the public any time further to NSC approval. Publication shall be accomplished in accordance with Article 14(2) of the Prospectus Directive and Article 175 of the Romanian Capital Markets Law. A prospectus shall be considered to have been made public when it is made available in any of the following ways: (i) publication in at least two daily newspapers with nationwide or extensive circulation; (ii) in a printed document made available free of charge to the public at the offices of the market on which the securities are being admitted to trading, the issuers registered office and the offices of the financial intermediaries placing or selling the securities; (iii) on the website of: (a) the offeror or issuer and, if any, the financial intermediary; (b) the market operation where admission to trading is to be completed; or (c) the NSC (www.cnvm.ro).
10.26
Any press releases concerning the public offering must mention that a prospectus has been or will be published and the place where it is or will be possible to obtain a copy thereof. When the prospectus is made public, it becomes mandatory.
2
10.27
Advertisements
Any type of advertisement relating to an offering of securities to the public or to an admission to trading is subject to specific provisions of the Romanian securities legislation, in the event that: (i) securities are offered on the Romanian territory or securities are admitted to trading on a Romanian regulated market; (ii) securities are offered or admitted to trading outside Romania by Romanian investors, and the prospectus has been drawn up and approved by the NSC in accordance with the applicable law.
10.28
Any advertisement made public by the issuer (or offeror) should comply with the following conditions: (i) the document should state that a prospectus has been or will be published and where it can be obtained; (ii) the information contained in the advertisement should be accurate and not misleading; (iii) the information should be consistent with that contained in the prospectus; and (iv) the advertisement must be clearly recognisable as such. All advertisements should be approved by the NSC before being circulated. The NSC will inform the issuer (or offeror) of its decision within a period of five days following receipt of the draft document.
10.29
154
Romania
10.34
10.30
Advertisements must contain no reference to their approval by the NSC, only references to the NSC approval of the prospectus being admissible. Moreover, any information provided in the advertisement materials must correspond to the information included in the prospectus. Publishing advertisements presenting advantages or benefits is under Romanian law a fraud or deceptive advertisement (Art. 178(3), (4) Law 297/2004).
VI
10.31

If a prospectus is drawn up and approved by the competent authority in accordance with the national law of an issuer whose home state is not a Member State of the European Economic Area, the NSC will approve the prospectus if the following cumulative conditions are complied with: (i) the information incorporated in the prospectus (including financial information) is equivalent to the requirements of the Regulation 1/2006; and (ii) the prospectus is drawn up in accordance with the international standards set by international securities commission organisations (Art. 50 Regulation 1/2006 and Art. 20(1) Dir.). The possibility to use a prospectus approved by the regulator of another Member State of the European Economic Area, as mirrored in the Prospectus Directive (Art. 49 Regulation 1/2006), is also implemented in Romania. Accordingly, no approval by the NSC of a prospectus is required if: (i) the prospectus was approved by the competent authority of another Member State of the European Economic Area in accordance with the Directives implementing legislation; (ii) the prospectus is still valid; (iii) the prospectus is drawn up in Romanian or a widely used language; (iv) the NSC is notified that the prospectus has been approved by the competent authority of the home Member State and a copy of the prospectus and a Romanian translation of the summary are provided.
10.32
10.33
With a view to carry out a public offer in Romania grounded on a base prospectus approved by the regulator of another Member State of the European Economic Area, the NSC issued a recommendation that the final terms of the public offering be notified to NSC, in case such final terms are not included in the base prospectus/amendments to the base prospectus notified to NSC.
VII
10.34
Measures and sanctions

Law 297/2004 contains a list of measures and sanctions that can be imposed by the NSC under specific circumstances (Art. 180-181 Law 297/2004 and Title X). This list of measures goes beyond those set forth in Article 21(3) and (4) of the Prospectus Directive, as, for example, the NSC has the right to 155
10.34
repeal the decision approving the prospectus in case: (i) it acknowledges that the public offering infringes the applicable laws and NSC regulations in force; (ii) it assesses that circumstances subsequent to the decision of approval determine material changes of the elements which grounded such decision; (iii) the issuer/offeror/person requesting admission to trading notifies NSC that it withdraws the public offering, prior to launching the offering announcement. 10.35 As per Law 297/2004, any of the following facts represents a contravention: (i) infringement of any provision of Law 297/2004 and NSC regulations for implementation of Law 297/2004; (ii) carrying out operations requiring NSCs authorisation without such authorisation or by breaching the conditions/restriction set forth in the authorisation; (iii) infringement of the conduct of business rules; (iv) infringement of measures set forth following audits; and (v) infringement of the obligations set forth for listed companies to have the financial statements audited by licensed persons (Art. 272 Law 297/2004). Any of the above contraventions may be sanctioned by NSC with: (i) warning; (ii) fine; (iii) complementary administrative penalties ranging from: (a) suspension of authorisation; (b) withdrawal of authorisation; to (c) temporary denial of carrying out activities/services regulated by Law 297/2004 (Art. 273). The administrative fines may range between: (i) 0.5 per cent to 5 per cent of the paid share capital for legal entities; (ii) RON 500 to 50,000 for individuals; (iii) fifty per cent to one hundred per cent of the value of transactions performed by persons breaching insider trading and market abuse rules (Art. 245248 Law 297/2004). In addition to administrative fines, persons found to have breached the securities laws may also be subject to criminal liability (i.e., prison ranging from six months to five years, criminal fine of fifty per cent to one hundred per cent of the value of transactions performed and/or a temporary denial of carrying out activities/services regulated by Law 297/2004). The following acts, for example, are subject to criminal sanctions: (i) the intentional presentation by the director, manager and/or executive leader of inaccurate and/or misleading information regarding the economical status of the company; (ii) the intentional use of confidential/privileged information, by any person being aware of such information, with a view to acquire or transfer or having the intention to acquire/transfer, to its own benefit or for other, directly or indirectly, financial instruments such information refers to; (iii) the intentional disclosure of confidential/privileged information to other persons, by persons being aware of such information or the counsel given to a person to acquire/transfer financial instruments subject to such confidential/privileged information; 156
10.36
10.37
10.38
Romania
10.42
(iv) the intentional performance of activities of market manipulation; (v) the intentional access by unauthorised persons of the electronic trading/ depository/settlement systems (Art. 237(3), Art. 245-248, Art. 279(2) Law 297/2004).
VIII
10.39
The prospectus must clearly identify (with name and position for individuals and name and registered office for legal entities) the persons who are responsible for the authenticity, accuracy and completeness of the information included in the prospectus (Art. 10(1), (2) Regulation 1/2006). Those persons include the issuer or the offeror (as the case may be), the intermediary, the financial auditor or any other person having contributed to set up the prospectus (including the person guaranteeing the fulfilment of obligations undertaken by the issuer). These persons must warrant in the prospectus that, to the best of their knowledge, the information contained therein is true and accurate and that no information had been omitted that could materially alter the meaning of the prospectus. Additionally, the following persons may also be held liable for any infringement of the legal provisions related to the authenticity, accuracy or correctness of information in the prospectus: (i) the offeror; (ii) the members of the Board of Directors (or the sole director) of the offeror; (iii) the issuer; (iv) the members of the Board of Directors of the issuer; (v) the founders, in case of public subscription; (vi) the financial auditor which ascertained the financial results mentioned in the prospectus; (vii) the offer intermediary; (viii) and/or any other entity which undertook liability in the prospectus for any information, study or assessment included therein. In these cases, the right to damages must be exercised by a harmed investor within six months from acknowledgement of the prospectuss default, but not later than one year from the closing date of the public offer (Art. 182(1) Law 297/2004). On what concerns admissible evidence, it should be noted that liability cannot be incurred solely on the basis of a summary of the prospectus or a translation thereof, unless the summary contains misleading, inaccurate, inconsistent or contradictory information in relation to the prospectus (Art. 10(3) Regulation 1/2006). The liability for the prospectus applies to the following entities/persons jointly, irrespective of their default, in connection with any damage caused by any misleading, inaccurate or incorrect information in the prospectus: (i) the offeror, if any of the following is liable: the members of the Board of Directors (or the sole director); the offer intermediary; and/or any other entity which undertook liability in the prospectus for any information, study or assessment included therein; 157
10.40
10.41
10.42
10.42
(ii) the issuer, if any of the following is liable: the members of the Board of Directors; the founders in case of public subscription; the financial auditor which ascertained the financial results mentioned in the prospectus; (iii) the manager of the intermediation syndicate, if any of the syndicate members is liable (Art. 182(2) Law 297/2004).
IX
10.43
Romanian legislation implementing the Prospectus Directive chose to apply the rules set forth in the Prospectus Directive to public offerings of securities with a total consideration of less than 2,500,000 partly or entirely carried out on the Romanian territory (Art. 12, Regulation 1/2006). Save when other specific legislation applies, other public offerings do not require the publication of a prospectus.
10.44
X
10.45
Conclusion
The Romanian legislation has generally transposed in full the provisions of the Prospectus Directive. However, some provisions of the Romanian law go beyond the scope of the Prospectus Directive. More particularly, unlike the Prospectus Directive, which provides a total exemption from publishing a prospectus for: (i) certain categories of offers; (ii) admission of certain categories of securities to trading on a Romanian regulated market; or (iii) shares issued in substitution of shares of the same class already issued, if the issuing of such new shares does not involve any increase in the share capita, the Romanian law requires the publication of a simplified prospectus even in such cases. Additionally, as regards shares offered, allotted or to be allotted in relation to change of the share capital, other than the increase of share capital by contribution in cash, by gratuitous allotment of shares to existing shareholders or by dividends paid by issuance of new shares of the same type as the shares for which dividends are being paid, for which the Prospectus Directive requires issuance of a prospectus, the Romanian law provides exemption from publication, subject to a simplified prospectus being made available.
Notes
1. See nos. 13 and 15 of Chapter 1, vol. I, of this book. 2. This is an extension of exemption (e), defined in no. 13 of Chapter 1, vol. I, of this book. 3. See no. 15 of Chapter 1, vol. I, of this book.
158
11 Republic of Slovenia
Eva Pe rga r e c, J u r i j D ol a n a n d M I TJA V I DM A R Odvetniki Jurij Dolan, Mitja Vidmar & Igor Zemljaric
Introduction 159 1 The legal framework 159 2 Some general features 161 II Competent authority 162 III Procedure of prior approval and appeal 163 1 Procedure of prior approval 163 2 Right of appeal 165 IV Content, language and supplements of the prospectus 166 1 Content 166 2 Format 168 3 Supplements of the prospectus 169 4 Language 169 V Publication and advertisements 170 1 Method of publication 170 2 Advertisements 171 VI Use of prospectus approved in other (non-EU and non-EEA) countries 172 VII Sanctions 173 VIII Prospectus liability 175 IX Rules applicable to transactions and securities not subject to the Prospectus Directive and Prospectus Regulation 175 1 Securities not subject to the Prospectus Directive and ZTFI 2 Exempted transactions 177 3 Exempted securities 177 4 Exempted admissions to trading 178 X Conclusion 180
175
I 1
11.1
Introduction The legal framework

The Republic of Slovenia, following dissolution of the former Socialist Federal Republic of Yugoslavia (SFRY) in 1991, continued to apply the majority of 159
11.1
the former federal legislation to the extent that such legislation was not contrary to the constitutional order of the independent Republic of Slovenia. In its effort to establish its own legislative framework as soon as reasonably practicable, Slovenia revised important former federal laws and regulations in an expedient manner. The first law of the Republic of Slovenia relating to issuing, offering and trading of securities was passed in 1994; the legislative framework relating to securities was thereafter substantially revised in 1999 with the new Securities Market Act (the ZTVP, Zakon o trgu vrednostnih papirjev), which also replaced some securities-related provisions previously included in other regulations such as the Law on Takeover of 1997 (ZPre, Zakon o prevzemih) and the Law on Investment Funds and Management Companies of 1994 (the ZISDU, Zakon o investicijskih skladih in drubah za upravljanje). 11.2 Slovenia implemented the Prospectus Directive with some delay through the substantial revision of the 1999 Securities Market Act in 2006 (the ZTVP-1, Zakon o trgu vrednostnih papirjev), which was published in the Official Journal of the Republic of Slovenia on 17 March 2006. The provisions of ZTVP-1 complied in most respects with the provisions of the Prospectus Directive; however, there were some differences in defining its field of application. In accordance with Article 1 of the Prospectus Directive, the Prospectus Directive shall, inter alia, not apply to non-equity securities issued in a continuous or repeated manner by credit institutions where the total consideration for the offer is less than 50,000,000, which limit shall be calculated over a period of twelve months (see also Chapter I, no. 9). The corresponding minimum amount in ZTVP-1 was set in Slovenian domestic currency at SIT 12,000,000,000 which, according to the official exchange rate,1 amounted to 50,075,112.67. Similarly, Article 3 of the Prospectus Directive provides that there is no obligation to publish a prospectus in relation to an offer for securities addressed to investors who acquire securities for a total consideration of at least 50,000 per investor, for each separate offer and when an offer of securities whose denomination per unit amounts to at least 50,000. Again, the threshold included in ZTVP-1 slightly differs from the amount under the Prospectus Directive since it was set at SIT 12,000,000, which amounted to 50,075.11. It should be noted that during the validity of ZTVP-1, Slovenia did not adopt the Euro as its currency; the national currency unit was Slovenian Tolar (SIT). Slovenia adopted the Euro as its currency on 1 January 2007, when the Euro Adoption Act (ZUE, Zakon o uvedbi evra) entered into force. The differences resulting from the use of different currencies under the ZTVP-1 and the Prospectus Directive were finally remedied through the adoption of the new law in 2007. ZTVP-1 was replaced in 2007 by a wholly new Market in Financial Instruments Act (the ZTFI) published in the Official Journal of the Republic of Slovenia
11.3 160
Republic of Slovenia
11.7
on 27 July 2007. The new ZTFI entered into force on 11 August 2007 and purports to have fully implemented various EU directives dealing with the subject matter of the prospectus and securities, including the Prospectus Directive and Directive 2004/109 of 15 December 2004. 11.4 The provisions relating to the content of the prospectus contained in the Prospectus Regulation were applicable in Slovenia from its accession to the European Union in 2004 onwards as in any other Member State.
2
11.5
Some general features

The provisions of ZTFI reflect the basic principle under the Prospectus Directive that securities may only be offered publicly in Slovenia if a prospectus in relation to such securities has been published in Slovenia during the period of the last twelve months and such prospectus has previously been approved by either: (i) the Slovenian Securities Market Agency (Agencija za trg vrednostnih papirjev) (the ATVP) or (ii) by the competent authority of another Member State of the European Union (each a Member State) and notified to the ATVP in accordance with the Prospectus Directive. For the purposes of ZTFI, the term offer of securities to the public means any communication, in any form and with application of any means, which contains sufficient information on the terms of the offer and the securities to be offered that on the basis of such information the investor decides to purchase or subscribe for such securities (Art. 30 ZTFI ). This definition shall also be applicable to selling the securities through financial intermediaries. It should be noted that: (i) there seems to be no special regulation defining sufficient information under the laws of Slovenia (see Chapter 1, vol. I, of this book, footnote no. 48); and (ii) such definition slightly, in its grammatical interpretation, differs from the definition of the offer to the public as contained in Article 2 of the Prospectus Directive but which difference should be remedied by proper interpretation in practice. According to the ZTFI, the offering programme is a plan, which enables issuance of debt securities (non-equity securities), including warrants in any form, which are a similar type or category, permanently or repeatedly during the period defined in the programme. In Article 31 of ZTFI the term first and further sale of securities defines: (i) the first sale of securities as a sale of securities based upon the issuers offer upon their issuance; and (ii) the further sale of securities as any sale of securities, except the first sale, including a sale performed by a financial intermediary that buys the securities from the issuer upon the first sale. According to the ZTFI, the term qualified investor (dobro pouceni vlagatelj) includes: (i) legal entities having received the approval or are subject to supervision in relation to their activities on the financial markets, including credit 161
11.6
11.7
11.7
(ii) (iii)
(iv) (v) (vi)
institutions (kreditne institucije), investment companies (investicjska podjetja), other surveyed financial companies (druge nadzorovane financne drube), insurance companies (zavarovalnice), reinsurance companies (pozavarovalnice), pension companies (pokojninske drube), collective investments undertaking (kolektivni nalobeni podjemi) in management companies of such undertakings, pension funds (pokojninski skladi) and the managers thereof and persons trading with goods and derivatives thereof; legal entities without the approval and not subject to supervision in relation to their activities on the financial markets provided that their corporate purpose is solely to invest in securities; the Republic of Slovenia and other states or bodies of national or regional governments, Bank of Slovenia (Banka Slovenije) and other central banks, international and supranational institutions (such as World Bank, International Monetary Fund, European Central Bank, European Investment Bank and similar); small- and medium-sized enterprises as defined in Article 2(1)(e) of the Prospectus Directive; small- and medium-sized companies that have been registered as qualified investors on their request in the Member State of their registered seat (Art. 2(a)(e)(v) Dir.); and natural persons who were, on their request, registered in the register of the qualified investors held by the Member State of their residence.
In accordance with Article 47 of the ZTFI, the register of the qualified investors in Slovenia is held by the ATVP and is available to the issuers. According to the ZTFI, the term debt securities shall generally mean the bonds and other securities, other than equity securities.
II
11.8
Competent authority
The competent authority for the approval of a prospectus in Slovenia is ATVP (Agencija za trg vrednostnih papirjev). ATVP has the sole competence to review and approve a prospectus in accordance with the ZTFI. ATVP is also a contact point of the Republic of Slovenia as defined in Article 56, first paragraph, of the Directive 2004/39 EC for the purposes of exchanging notices, information and cooperation with the competent authorities of the other Member States. The ATVP has its registered seat in Ljubljana, Poljanski nasip 6, 1000 Ljubljana (Phone: + 386 (0)1 2800400, Email: webmaster@a-tvp.si, www. atvp.si). As explained further below (see no. 13 of this chapter), ATVP may transfer the competence to approve a prospectus to the competent authority of another Member State if such authority consents to such transfer.
11.9
162
11.13
III 1
11.10
Procedure of prior approval and appeal Procedure of prior approval

Subject to certain exemptions (see nos. 40 to 46 of this chapter), any public offering of securities in Slovenia (whether through an initial sale or a subsequent resale) is only permitted in Slovenia if the issuer or the offeror publishes a prospectus in relation to the securities so offered. A prospectus must also be published by the person seeking the admission of the securities to trading on a regulated market (except in case of certain exceptions as provided under the ZTFI). Pursuant to Article 37 of ZTFI, a prospectus must be approved by the competent authority of the home Member State of the issuer before being made available to the public. Article 69 of ZTFI provides that the application for approval of the prospectus may be filed by the issuer, the offeror (if different from the issuer) or (in the case of a prospectus for admission to trading) the person asking for admission of the securities to trading on a regulated market. Such application must be accompanied by a copy of the prospectus prepared in accordance with the provisions of the Prospectus Regulation (Art. 70 ZTFI). If the application is filed by an issuer which is a local authority within the Republic of Slovenia (e.g., a municipality), the consent of the Ministry of Finance for such issue of the relevant securities is also required (Art. 70/3 ZTFI). If the ATVP determines that the application is incomplete or that the prospectus has not been prepared in accordance with the ZTFI, it must notify the issuer within ten working days from the day of receipt of the application. The ATVP must notify the applicant of its decision on an application to approve a prospectus within ten working days from the receipt of the complete application. This period is extended to twenty working days in case of a public offering for securities by an issuer whose securities have previously not been offered to the public and admitted to trading on a regulated market (Art. 71/1,2 ZTFI). ATVP may: (i) transfer its competence and responsibility to approve a prospectus to the competent authority of another Member State if such authority consents to such transfer; or (ii) assume the competence to approve a prospectus from the competent authority of another Member State (Art. 68 ZTFI). Such transfer shall be notified to the applicant within three working days from the date of the ATVPs agreement with the other competent authority, but no later than on the date on which it would otherwise have to notify its decision on an application to approve a prospectus. If the approval of the prospectus is so transferred, the time period for the notification of the decision on the prospectus shall run from the date of the notification of the transfer to the applicant (Art. 68 ZTFI). 163
11.11
11.12
11.13
11.14
11.14
The ATVP shall approve the prospectus if the application is filed by the relevant applicant and if such prospectus complies with the provisions set out in Chapter 2 of the ZTFI (Offer of securities to the public) (Art. 72/1 of ZTFI) (see also Chapter 1, no. 28). If this is not the case, the approval shall be denied unless the prospectus has been amended or supplemented to comply with the above-mentioned provisions within the time period set by the ATVP. Pursuant to Article 72 of ZTFI, the approval shall also be denied if: (a) the application refers to a prospectus for securities for which the decision on their issuance is void or has been annulled; or (b) the applicant is an issuer that has been sanctioned by the ATVP for breach of its obligations to comply with its reporting requirement2 and such breach has not yet been remedied. The application to approve a prospectus shall be rejected if: (a) the application has been filed by a non-eligible applicant; (b) the application is incomplete due to reasons other than irregularities or incompleteness of the prospectus and such application has not been amended or supplemented within the available time period; or (c) other procedural requirements for the assessment of the application have not been met.
11.15
After the prospectus is approved, the issuer, the offeror or the applicant for admission to trading of the securities shall file the final version thereof (which shall not differ from the approved version) with the ATVP in electronic form, publish it and inform the ATVP about the way of publishing (see also no. 29 of this chapter). If the prospectus relates to an initial public offer of a class of shares not already admitted to trading on a regulated market, the requirement relating to the publication and notification of a prospectus shall be fulfilled as soon as possible but no later than six working days before the expiry of the offer (or sooner if the acceptance period is less than six working days). In other cases the requirement relating to the publication and notification of a prospectus shall be fulfilled by the day on which the securities are offered to the public or admitted to trading on a regulated market (Art. 73(2) ZTFI). The prospectus approved is generally valid for a period of twelve months after its publication provided that it is supplemented if and as required by ZTFI (Art. 62 ZTFI) (see no. 27 of this chapter). In the case of a prospectus relating to an offering programme, the base prospectus shall be valid for a period of up to twelve months. In the case of non-equity securities issued in a continuous or repeated manner by credit institutions and complying with the other criteria referred to in Article 56/2 of the ZTFI (see also no. 26 of this chapter), the prospectus shall be valid until no more of the securities concerned are issued in a continuous or repeated manner. In case of a divided prospectus (i.e., a prospectus divided into three separate documents), its registration document shall be valid for a period
11.16
164
11.19
of twelve months after its submission to the ATVP provided it has been updated with the annual document stating all published or publicly available information of the issuer (Art. 62 (4) ZTFI) and shall, when accompanied by the securities note and updated (if applicable) with the required supplements, together with the summary note constitute a valid prospectus (Art. 62(5) ZTFI). After the expiry of the validity period, the prospectus may no longer be used for public offering or the admission to trading (listing) on the regulated market. As to the further sale of the securities, the prospectus has to be published before every further sale of securities when such are offered to the public. Before any public offer, the ATVP shall issue a decision on approval of the prospectus.
2
11.17
Right of appeal
The decisions taken by ATVP in the process of approval of the prospectus may be challenged in court proceedings initiated against ATVP in the Supreme Court of the Republic of Slovenia3 in accordance with the provisions of the Administrative Disputes Act (ZUS, Zakon o upravnem sporu, Official Journal of the Republic of Slovenia, No.105/2006), as supplemented by certain special procedural provisions contained in ZTFI. The main features of these provisions are briefly outlined below. The person challenging a decision taken by ATVP in the procedure of prior approval of a prospectus may be: (i) any person that participated in the procedure conducted by ATVP prior to such decision (i.e., the applicant and any other person who was given the possibility to participate in the procedure in order to protect its lawful interest); or (ii) a representative of the public interest. According to the provisions of the ZUS currently in force, the role of such a representative can, as a general rule, be taken by the public attorney (Dravni pravobranilec) who requires the governments authorisation for filing complaints seeking to protect the public interest. The rules of procedure applicable to the relevant proceedings differ significantly depending on whether the ATVP by the decision so challenged approved the prospectus or not. If the approval of prospectus was denied by ATVP, then the general rules for challenging administrative decisions apply. This basically means that the court will, in the event of the plaintiffs success, declare the ATVPs decision invalid, and either: (a) direct that ATVP shall repeat the procedure of approval (taking into account the courts guidelines as to legal and procedural matters); or (b) take a final decision on the approval of the prospectus. The court decision in such cases is final and is not subject to further appeal. 165
11.18
11.19
11.19
If, however, the plaintiff challenges the decision by which ATVP approved a prospectus, the court may neither declare the ATVPs decision invalid nor modify the ATVPs decision. Instead, the court can only declare that the decision was unlawful, which declaration has no effect on the validity of the transactions effected in reliance on the relevant prospectus. The parties can appeal against the decisions taken by the court in these cases, in which case the final decision is taken by a panel of seven judges of the Supreme Court.
IV 1
11.20
Content, language and supplements of the prospectus Content

A base prospectus is a prospectus containing: (i) all the information required under the Prospectus Regulation and Article 53 of ZTFI (which shall include all information necessary to enable investors to make an informed assessment about the investment in the securities, including information on the legal and financial situation and prospects of the issuer, any guarantor and of the rights attaching to such securities); (ii) a supplement to the prospectus if and when necessary; and (iii) the final terms of the offer if so elected by the issuer (Art. 40 ZTFI). If the final offer price and number of the securities which will be offered to the public cannot be included in the prospectus, then the prospectus should disclose the criteria and conditions according to which such elements will be determined; in case of price, the maximum final price should alternatively be disclosed. If the prospectus does not include the above information, the issuer or the offeror should enable the investors to withdraw from the acceptance of the purchase or subscription of securities within a period not shorter than two working days after the final offer price and number of the securities has been published (Art. 59(1) and (2) ZTFI). In each case, the issuer or the offeror must notify the final offer price and amount of securities to the ATVP or the competent authority of a home Member State of the issuer and publish this information in accordance with the provisions of Article 74(1) of ZTFI (see no. 29 of this chapter). In exceptional cases, where information required by the Prospectus Regulation to be included in a prospectus is inappropriate to the issuers sphere of activity or to the legal form of the issuer or to the securities to which the prospectus relates, the prospectus shall contain information equivalent (if it exists) to the required information, taking into account the general requirement that the prospectus must contain the information necessary to enable investors to make an informed assessment about the investment in the securities. In addition, the ATVP may authorise the omission from the prospectus of certain other information required by the provisions of the ZTVP or the Prospectus Regulation if: a) the disclosure of such information would be contrary to the public interest;
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b) the disclosure of such information would be seriously detrimental to the issuer, provided that such omission would not be likely to mislead the public considering the facts and circumstances essential for the informed assessment of the issuer, offeror or the guarantor or the rights attached to the securities to which the prospectus relates; c) such information is of minor importance only for such specific offer or admission to trading and does not have characteristics that would influence the assessment of the financial position and future prospectus of the issuer, offeror or guarantor. According to the provisions of ZTFI, the ATVP may prescribe more detailed criteria for the omission of the information, provided that in defining such detailed criteria it takes into account the regulation or other implementing act of the European Commission issued on the basis of Article 8(4) of the Prospectus Directive (Art. 60 ZTFI). 11.22 Information may also be incorporated in the prospectus indirectly, by reference to one or more previously or simultaneously published documents that have been approved by, or filed with, the ATVP or the competent authority of another Member State, which is a Member State of the issuer in accordance with the provisions of ZTFI. The information contained in such documents shall be the latest information available to the issuer and the type of information permitted to be included in the prospectus and the manner of such incorporation by reference shall comply with the provisions of the Prospectus Regulation (see also Chapter 1, vol. I, of this book, no. 40). When information is incorporated by reference, a cross-reference list must be provided in order to enable investors to easily identify and access specific items of information so incorporated. The summary note (see no. 23 of this chapter) may not incorporate information by reference (Art. 64 ZTFI). In addition to all relevant information relating to the issuer and the securities which are to be offered to the public or admitted to trading on a regulated market, the prospectus must also contain a summary note except where the denomination per unit of securities amounts to at least 50,000. In accordance with Article 54 of the ZTFI, the summary shall, in a brief manner and in a non-technical language, convey the essential characteristics and risks associated with the issuer, any guarantor and the securities, in the language in which the prospectus was originally drawn up (see also no. 28 of this chapter). The summary shall also contain a warning (Art. 54(2) ZTFI) that: (a) the summary should be read as an introduction to the prospectus; (b) any decision to invest in the securities should be based on consideration by the investor of the prospectus as a whole; (c) where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might have to bear the costs 167
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of translating the prospectus into the official language of the court before the legal proceedings are initiated; and (d) the persons who have prepared the summary, including any translation thereof, and applied for its notification, shall only be liable if the summary is misleading, inaccurate or inconsistent when considered together with the other parts of the prospectus.
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Format
The prospectus may be drawn up as a single document (enotni prospekt) or in a form of separate documents (deljeni prospekt). If the prospectus comprises several documents, the information required for the prospectus should be divided among the documents as follows: (i) the registration document shall contain the information relating the issuer; (ii) the securities note shall contain the description of securities and information relating to them; and (iii) a document with a summary note shall be added (Art. 55 ZTFI). A summary note is not required for prospectuses prepared in relation to admission to trading on a regulated market of debt (non-equity) securities with the nominal amount of at least 50,000 (Art. 53/5 ZTFI). A prospectus may also be drawn up as a simplified prospectus, which contains only the basic information as to the issuer and securities offered to the public or to be admitted to trading on the regulated market (see also no. 43 of this chapter). The simplified prospectus may be drawn up for the securities for which the total purchase price during the twelve-month period is less than 2,500,000 (Art. 42 ZTFI). For certain securities, a base prospectus approach shall be applicable. In accordance with Article 56 of ZTFI, special rules for the base prospectus apply in relation to the following securities: (a) debt (non-equity) securities, including warrants, issued under an offering programme; and (b) debt (non-equity) securities issued by banks in a continuous or repeated manner provided that: (i) the proceeds from the issue of such securities are, according to the applicable law, invested into assets that provide sufficient coverage for all liabilities under such securities until their maturity; and (ii) in the event of insolvency of the bank issuer, such assets shall be intended for priority repayment of the capital and interest payable in respect of such securities, without prejudice to the application of the Prospectus Directive 2001/24/EC (see also no. 20 of this chapter). In case of a base prospectus, the information contained in the base prospectus shall be supplemented, if and when necessary, by updated information on the issuer and the relevant securities (see also nos. 20 and 26 of this chapter).
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3
11.27
Supplements of the prospectus

The issuer, the offeror or the applicant for the admission to trading shall prepare a supplement to a prospectus which already has been approved if, between the approval of the prospectus and the close of offer of securities or start of trading on the organised market: (i) any new material fact or circumstance has occurred; or (ii) a material error or inaccuracy in relation to the information included in the prospectus is discovered, provided that such fact, circumstance, error or inaccuracy could affect the assessment of the securities (Art. 80 ZTFI). Any supplement to the prospectus shall be approved by the ATVP or the competent authority of the issuers home Member State within seven working days of the application, mutatis mutandis, of the rules applicable to the prospectus approval generally. Such supplement should be published in the same manner as applicable to the publication of the original prospectus. If necessary, considering the new information included in the supplement, the issuer, the offeror or the applicant for the admission to trading shall also publish a corresponding supplement to the summary and its translation. Investors that purchased or subscribed for the securities pursuant to the offer based on the original prospectus shall have the right to withdraw from the acceptance of the offer. Such right to withdraw shall be enforced within two working days after the supplement has been published.
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Language
According to the rules contained in Article 85 of ZTFI and as contemplated by the Prospectus Directive, the determination as to which language shall be applicable for the prospectus depends on the residency of the issuer and the state where the offer to the public or application for admission to trading on a regulated market is made. The prospectus shall be prepared in the Slovenian language: (a) in cases where Slovenia is the home country for the issuer and the offer to the public is to be made in Slovenia only, or admission to trading on a regulated market in Slovenia only is sought; and (b) if Slovenia is the issuers home Member State and a public offering is made or admission to trading on a regulated market sought in Slovenia and in other Member State(s), provided that such prospectus shall be made available to the public also in a language accepted by the competent authority of the host Member State or in the language customarily used in the international financial circles. If Slovenia is the host Member State and the prospectus is not prepared in the Slovenian language, ATVP may require that the summary be translated into the Slovenian language. 169
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In a case of an offer to the public or an application for admission to trading on a regulated market in a Member State other than Slovenia, the prospectus shall be drawn up, at the choice of the issuer, offeror or person applying for admission to trading, in a language accepted by the competent authority of the host Member State or in a language customarily used in international financial circles. Notwithstanding the aforementioned, for the purposes of the prospectus approval procedure by the ATVP, such prospectus shall in addition also be drawn up, at the discretion of the applicant, in the Slovenian language or in a language customarily used in international financial circles. Where admission to trading is sought in one or more Member States for debt securities each with nominal value of at least 50,000, the prospectus shall be drawn up (at the choice of the issuer or person applying for admission to trading) either in the languages accepted by the competent authorities of the issuers home Member State and of each such host Member State or in the language customarily used in international financial circles (Art. 85/6 ZTFI).
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11.29

According to Article 74 of ZTFI, a duty to make the approved prospectus available to the public shall be considered complied with if the prospectus has been made available to the public through one of the following means: (a) by publication in a newspaper sold on the whole or prevailing part of Slovenia or the Member State in which securities are offered to the public or admitted to trading; (b) if its printed version is made available to the public free of charge (i) at the offices of the administrator of the organised market where the securities are to be admitted to trading, or (ii) at the registered office of the issuer and all of the offices of the intermediaries performing the services in relation to the sale and purchase of subscription of the relevant securities; (c) in electronic form on the websites of the issuer and of the financial intermediaries selling the securities; (d) in electronic form on the website of the regulated market where the admission to trading is sought; (e) in electronic form on the ATVP website (such service, if provided by ATVP, is chargeable) (Art. 74 ZTFI). The ATVP is obliged to publish on its website a list of all the prospectuses approved during the preceding twelve months. Such list shall also provide the hyperlinks to the prospectuses published on the websites of the issuer,
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intermediaries or regulated market (see no. 29 of this chapter) unless a prospectus is also published on the ATVP website (Art. 74/2 ZTFI). Although where the prospectus is made available by publication in electronic form the Prospectus Directive only requires that a paper copy of the prospectus be delivered free of charge to the investor at his request, the ZTFI requires that in case of publication in electronic form the issuer, the offeror, the person asking for admission to trading or the financial intermediaries placing or selling the securities shall, upon the request of an investor and free of charge, deliver the prospectus to such person in paper form (Art. 77 ZTFI). 11.30 A prospectus comprising several documents and/or incorporating information by reference, the documents and information making up the prospectus may according to Article 76 of ZTFI be published separately provided that such documents are made available, free of charge, to the public in accordance with one of the methods of appropriate prospectus publication (see no. 29 of this chapter). Each of such documents shall indicate where the other documents, which together constitute the prospectus, may be obtained (Art. 76(2) ZTFI). In pursuance of its right under Article 14(3) of the Prospectus Directive, Slovenia has included into ZTFI a provision that any advertisement in relation to the relevant securities (see no. 32 of this chapter) shall include a statement that a prospectus has been or will be published and where such prospectus can be obtained by the investors.
2
11.31
Advertisements
The provisions contained in Article 78 of ZTFI and covering the advertisement in relation to securities may be split between: (a) rules generally applicable to the offering of securities to the public or admission of securities to trading on an organised market; and (b) rules applicable to the securities in relation to which the issuer, the offeror or the person applying for admission to trading of such securities is required to prepare a prospectus. Advertisement shall be considered as any form of advertisement or marketing in relation to the offering of securities to the public or admission of securities to trading on an organised market.
11.32
Any public offering of securities or admission of securities to trading shall be subject to the following general rules: (a) the advertisement shall comply with the provisions of the Prospectus Regulation; and (b) an issuer or an offeror shall ensure that all information in relation to the offer, including those disclosed during the roadshows or disclosed 171
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to some investors only, is made available to all the qualified investors or special categories of investors to whom the offer is addressed; 11.33 If an obligation to prepare a prospectus is attached to the relevant public offering or admission to trading, the following rules shall apply in addition to the general rules: (a) each advertisement shall include an information as to the publication of the prospectus and where it shall be available to the investors (see no. 30 of this chapter); (b) each advertisement shall be clearly recognisable as such; (c) the information included in the advertisement shall not be inaccurate or misleading and must comply with the information contained in the prospectus (if already published) or required to be included in the prospectus (if the prospectus has not yet been published); and (d) any information relating to the public offer of securities or admission to trading shall be consistent with that contained in the prospectus, notwithstanding if it has been disclosed orally or in writing and regardless of whether it has been made for advertising or marketing purposes.
VI
11.34

Generally, all of the provisions of ZTFI regulating offers of securities or applications for admission to trading on an organised market in Slovenia shall apply in relation to any such offer made or admission sought in relation to securities issued by the issuer with its registered office in a third country outside the European Union. In addition to the generally applicable rules, the issuer of securities with a registered office outside the European Union, the offeror of securities issued by such issuer or the applicant for the admission of such securities to trading in Slovenia shall authorise a person authorised to provide investment services in Slovenia pursuant to the ZTFI for all actions in relation to the public offer or admission to trading, including for the preparation and publication of the prospectus (Art. 87/1 ZTFI). Such authorised investment company shall be jointly and severally liable with the issuer, offeror or such applicant for their respective obligations set by the ZTFI in relation to the offering or admission to trading. Notwithstanding the general rules applicable to prospectuses, ATVP may also approve a prospectus related to the securities of a third-country issuer and prepared under the laws of such third country provided that the following conditions are met: (a) the prospectus has been drawn up in accordance with international standards set by the international organisation of authorities responsible for the supervision in relation to the securities, including the International
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1136
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Organisation of Securities Commissions (IOSCO) information publications standards; and (b) the prospectus meets, in relation to the information included in the prospectus (including information of financial nature), the requirements that are equivalent to the requirements under the ZTFI. In considering the approval of a prospectus related to the securities of a thirdcountry issuer, ATVP is bound to comply with the implementing regulation issued by the Commission pursuant to Article 20/3 of the Prospectus Directive.
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11.37
Sanctions
As provided in Article 89 of ZTFI, ATVP shall have the competency and obligation for the supervision of compliance with the ZTFI provisions relating to public offers and applications for admission to trading on a regulated market for which Slovenia is the home Member State. ATVP shall also have powers in relation to public offers and admissions to trading sought where Slovenia is considered the host Member State for the issuer, provided that according to Article 96 of ZTFI in such case its powers are limited to: (a) notification to the home Member State of the irregularities or breaches of the issuers or the intermediaries obligations discovered in relation to the public offer or admission to trading in Slovenia; (b) taking appropriate measures necessary for the protection of investors if the breaches notified before have not been remedied (despite measures taken by the issuers home Member State or as a result of such home Member States measures being inadequate), provided that the measures are: (i) notified in advance to the competent authority of the home Member State, and (ii) immediately notified to the European Commission. ATVP shall have no authority if securities of the issuer with a registered office in Slovenia are to be offered publicly or admitted to trading on the regulated market in a Member State other than Slovenia, provided that the issuer, the offeror or the person asking for admission have elected that the competent authority of the Member State in which the securities are to be offered or admitted to trading shall perform this task (Art. 67 and 38 ZTFI). Such election of the issuer, the offeror or the person asking for admission shall be notified to the ATVP and to the competent authority of the other Member State in advance. The supervision shall be aimed at ensuring that the issuer, the offeror, the applicant for admission to trading and other relevant persons comply with the provisions related to the offering of the securities to the public. Supervision shall include its powers to intervene as discussed below (see no. 38 of this chapter). ATVP may request information and documentation in relation to its supervision of compliance with the ZTFI provisions from the issuer, the offeror or 173
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the applicant for the admission to trading of securities, including their holding and subordinated companies. Such information and documentation may also be required from their respective auditors and directors. 11.38 ATVP shall be authorised by the issuer, the offeror or the applicant for the admission to trading that additional information is included in the prospectus if such is required for the protection of the investors. Should ATVP have a founded suspicion that the provisions of the ZTFI related to the offering of securities to the public have been breached, ATVP may: (i) temporarily suspend the public offering or admission to trading for a period of up to ten working days; (ii) prohibit advertising or temporarily suspend it for a period of up to ten working days; and (iii) request the regulated market regulator to suspend trading with securities for a period of up to ten working days. The ATVP may also: (i) prohibit the offering of securities to the public or admission to trading; (ii) prohibit trading with such securities; and (iii) publish that the issuer does not comply with its obligations related to the offering of securities to public. In case the ATVP has temporarily suspended or prohibited the offering to public or admission to trading of the relevant securities, each investor that previously purchased or subscribed for the relevant securities shall have the right to withdraw from its acceptance of the underlying offer within five working days from the publication of the relevant ATVPs measure. ATVP also has the power to impose administrative penalties on the issuers and other persons who violated the relevant ZTFI provisions, including the individuals responsible. For grave breaches (such as failure to publish a prospectus or a supplement thereto when required, publication of prospectus or a supplement thereto without a prior approval, inclusion of inaccurate or incomplete information in a prospectus, publication of invalid prospectus and failure to duly publish a prospectus or supplement thereto or failure to prepare a prospectus in the relevant language) penalties range from 25,000 to 125,000 for legal persons and from 130 to 4,100 for the responsible individual. In the event of an especially severe offence due to high damage caused or benefit received or wilful conduct or intent of the offender, penalties may be increased up to 370,000,00 for legal persons and up to 12,000 for the responsible individual (Art. 556 ZTFI). For minor breaches (such as failure to publish the final offer price and number of securities or failure to comply with obligations related to the notification of such price, number and methods, failure to timely submit the final prospectus to ATVP, failure to timely publish the outcome of the offer, failure to make the prospectus available to the public or failure to provide information to ATVP) the penalties range from 12,000 to 125,000 for legal persons and from 200 to 4,100 for the responsible individual (Art. 557 ZTFI). Slovenian law does not provide for a specific prospectus, public offering of securities or admission to trading criminal sanctions.
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VIII
11.40
According to Article 58 of ZTFI, the prospectus shall contain information on the persons responsible for the accuracy and completeness of the information contained in the prospectus. Information regarding at least the following persons shall be included, considering the intended use of the prospectus: (a) the issuer and members of its management and supervisory board; (b) the offeror or applicant for admission to trading; and (c) any guarantor for the obligations under the securities. The prospectus should contain a statement of the responsible persons that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that there are no omissions likely to affect the import of the prospectus.
11.41
All such persons shall be jointly and severally liable for any damages caused to the investor due to inaccurate and incomplete information contained in the prospectus, unless they can prove one of the following (Art. 58 ZTFI): (a) they have acted with due professional care in preparing the prospectus and verifying the information included; (b) at the moment of the purchase of securities the investor knew that the information contained in the prospectus was inaccurate and incomplete; (c) the investor had the right to withdraw from its acceptance of the offer according to the ZTFI and has failed to enforce such right (Art. 80/5 ZTFI); (d) information has not been included in the prospectus as permitted under the ZTFI (Arts. 60 and 61 ZTFI); or (e) such information is unlikely to be considered material by a reasonable investor in deciding whether or not to purchase securities. No liability shall attach to any person solely on the basis of the preparation of the summary, including its translation, unless such summary contains inaccurate or misleading information when read together with the other parts of the prospectus. ATVP shall have no responsibility for the accuracy and completeness of the information included in prospectuses approved by it (Art. 67/2 ZTFI).
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Rules applicable to transactions and securities not subject to the Prospectus Directive and Prospectus Regulation Securities not subject to the Prospectus Directive and ZTFI
In accordance with Article 41(1) of the ZTFI, the provisions regulating the offer of securities to the public shall not apply to the following securities: (a) units issued by collective investment undertakings other than the closedend type; 175
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(b) non-equity securities issued by the Member State, regional or local authority of a Member State, public international bodies of which one or more Member States are members, European Central Bank or central bank of a Member State; (c) shares or other securities representing a portion in the capital of the central bank of a Member State; (d) securities unconditionally and irrevocably guaranteed by a Member State or by a regional or local authority of a Member State;4 (e) non-equity securities issued in a continuous or repeated manner by a bank provided that these securities: (i) are not subordinated, convertible or exchangeable; (ii) do not give a right to subscribe to or acquire other types of securities and are not linked to a derivative instrument; (iii) materialise reception of repayable deposits as defined in the Banking Act (ZBan, Zakon o bancnitvu);5 (iv) are covered by a deposit guarantee scheme under the Directive 94/19/EU; (f) debt (non-equity) securities issued in a continuous or repeated manner by banks where the total consideration of such offer is less than 50,000,000 which limit shall be calculated over a period of twelve months, provided that these securities: (i) are not subordinated, convertible or exchangeable; (ii) do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative instrument. Nevertheless, according to Article 41(2) of the ZTFI, the issuer, offeror or a person asking for admission to trading on a regulated market of securities referred to in (b), (d) and (f) above may prepare a prospectus in accordance with the provisions of the ZTFI when securities are offered to the public or the request for admission to trading on the regulated market has been filed. 11.43 In addition, public offerings of securities where total consideration of the offer is less than 2,500,000, which limit shall be calculated over a period of twelve months, are subject to the requirements set out in Article 42 of ZTFI (see also no. 25 of this chapter). Article 42 provides that a simplified prospectus can be published for every public offer of these securities. Such simplified prospectuses must contain the basic details of the issuer (name and unique ID number), the value of the issue, the denomination of the securities and the rights of their holders, financial and other information enabling the investors to make a proper assessment of the issuer and the securities and such other information evidencing that the simplified prospectus is eligible for approval. Before publication, the simplified prospectus must be approved by the ATVP, for which purpose the same procedure applies as for the approval of a prospectus.
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2
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Exempted transactions
According to Article 49 of the ZTFI, the publication of a prospectus is not required in connection with a public offering of securities: (a) if the offer is addressed solely to qualified investors (dobro pouceni vla gatelji), as defined in the ZTFI; and/or (b) if the offer is addressed to fewer than 100 natural or legal persons in a Member State, not being qualified investors; and/or (c) if the offer is addressed to investors who acquire the securities for a total consideration of at least 50,000 per investor, for each separate offer; and/or (d) if the securities offered have denomination per unit of at least 50,000; and/or (e) if the total consideration for the securities offered is less than 100,000, which limit shall be calculated over a period of twelve months. The exemptions referred to above can only be relied upon if each single transaction fulfils the required criteria and the prospectus must be published in respect of any transaction that falls outside the scope of the above exemptions. In addition, the intention to rely on the above exemption must be notified to the ATVP not later than three working days before the commencement of the offer (which notification must, in the case of the initial sale of the securities, be accompanied with a copy of the decision on the issuance of the securities) (Art. 52 ZTFI).
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Exempted securities
According to Article 50 of the ZTFI, publication of a prospectus is also not required in connection with the offerings to the public of the following types of securities: (a) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued capital; (b) securities offered in connection with a takeover by means of an exchange offer, provided that: (i) where the takeover offer is subject to provisions of the Takeover Act (ZPre, Zakon o prevzemih),6 the issuer has obtained approval for the takeover and has published a prospectus in accordance with the provisions of Takeover Act; or (ii) in all other cases of takeover offers, a document is available containing information which is regarded by the ATVP as being equivalent to that required for the prospectus under the ZTFI; 177
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(c) securities offered, allotted or to be allotted in connection with a merger or demerger, provided that: (i) where such merger or demerger is subject to the provisions of the Companies Act (ZGD, Zakon gospodarskih drubah),7 the required information has been made available in accordance with the provisions of ZGD; (ii) in all other cases of mergers or demergers, that a document is available containing information which is regarded by ATVP as being equivalent to that of the prospectus; (d) shares offered, allotted or to be allotted free of charge to existing shareholders based on a capital increase from the companys assets, and dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (e) securities offered, allotted or to be allotted to existing or former directors or employees by their employer which or its affiliated undertaking has securities already admitted to trading on a regulated market, provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer. The intention to rely on the above exemption must be notified to the ATVP not later than three working days before the commencement of the offer of securities to the public or to admission to trading on a regulated market (Art. 52 ZTFI).
4
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Exempted admissions to trading

According to the Article 51 of the ZTFI, the obligation to publish a prospectus shall not apply to the admission to trading on a regulated market of the following types of securities: (a) shares representing, over a period of twelve months, less than ten per cent of the number of shares of the same class already admitted to trading on the same regulated market; (b) shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, if the issuing of such shares does not involve any increase in the issued capital; (c) securities offered in connection with a takeover by means of an exchange offer, provided that: (i) where the takeover offer is subject to provisions of the Takeover Act, the issuer has obtained approval for the takeover and has published a prospectus in accordance with the provisions of the Takeover Act; or (ii) in all other cases of takeover offers, a document is available containing information which is regarded by the ATVP as being equivalent to that of the prospectus;
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(d) securities offered, allotted or to be allotted in connection with a merger or demerger, provided that: (i) where such merger or demerger is subject to the provisions of the Companies Act, the required information has been made available in accordance with the provisions of ZGD; (ii) in all other cases of mergers or demergers, that a document is available containing information which is regarded by ATVP as being equivalent to that of the prospectus; (e) shares offered, allotted or to be allotted free of charge to existing shareholders based on a capital increase from the companys assets, and dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (f) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or its affiliated undertaking which has securities already admitted to trading on a regulated market, provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer; (g) shares resulting from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market. In addition, the obligation to publish a prospectus shall also not apply to securities already admitted to trading on another regulated market, if the following conditions are met: (i) that these securities, or securities of the same class, have been admitted to trading on that other regulated market for more than eighteen months; (ii) that, depending on the moment of the admission to trading on that other regulated market: (a) if these securities were admitted to trading on that other regulated market after 31 December 2003, such admission to trading was associated with an approved prospectus made available to the public in conformity with Article 14 of the Prospectus Directive; (b) if these securities were admitted to trading on that other regulated market after 30 June 1983 and before 31 December 2003, listing particulars were approved in accordance with the requirements of Directive 80/390/EEC (as subsequently amended) or Directive 2001/34/EC; (iii) that the ongoing obligations for trading on that other regulated market have been fulfilled; 179
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(iv) that the person seeking the admission of a security to trading on a regulated market under this exemption makes a summary document available to the public in the Slovenian language accepted by ATVP; (v) that the summary document referred to in the previous sub-paragraph is made available to the public in Slovenia in the same manner as required for a prospectus (as set out in the Article 74 of the ZTFI); and (vi) that the contents of the summary document shall comply with Articles 53 and 54 of the ZTFI8 and shall state where the most recent prospectus can be obtained and where the financial information published by the issuer pursuant to his ongoing disclosure obligations is available. The intention to rely on the above exemption must be notified to the ATVP not later than three working days before the admission to the trading on the regulated market.
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Conclusion
The Slovenian legislation reflects the principles contained in the Prospectus Directive and is a result of various changes over the years, including those related to the adoption of the Euro as the Slovenian currency unit as of 1 January 2007. Although the majority of the Prospectus Directive was implemented earlier, it was fully implemented by the new ZTFI from July 2007. The aim of such legislation is no different than the aim of the relevant European Union directives, including the Prospectus Directive and the Prospectus Regulation and will definitely help expand the capital and financial market in Slovenia. It has to be noted, though, that the ZTFI is a fairly complex law with nearly 600 articles and numerous cross references, which complexity may cause, despite fair intentions of the legislator, some problems in practice. On the other hand, after one year of the application of the new ZTFI it may be said that no material problems have been reported and ATVP is continuing to further improve its practice and expertise as regulator in relation to the securities public offering and admission to trading and many other issues dealt with by the new ZTFI, including various ZTFI implementing regulations.
Notes
1. 2. 3. 4. 1 euro = 239,640 SIT. Chapter III of ZTFI, Duty to disclose controlled information. Vrhovno sodice Republike Slovenije. Securities issued by associations with legal status or non-profit-making bodies, recognised by a Member State, with a view to their obtaining the means necessary to achieve their non-profit-making objectives. 5. Banking Act, published in the Official Journal of the Republic of Slovenia, No. 131/2006, as amended.
180
11.47
6. Zakon o prevzemih, Official Journal of the Republic of Slovenia, No. 79/06, as amended. 7. Zakon o gospodarskih drubah/ZGD-1, Official Journal of the Republic of Slovenia, No. 42/06 as amended. 8. Unofficial translation: The summary shall, in a brief manner and in nontechnical language, convey the essential characteristics and risks associated with the issuer, any guarantor and the securities, in the language in which the prospectus was originally drawn up.
181
12 Spain
R a m i ro R i v e r a a n d Augus t o P i e l Ura Menndez
Introduction 182 Competent authority 185 Prior approval procedure and appeal 185 1 Prior administrative authorisation 185 2 Public offer and admission to trading 185 3 Exemptions 186 IV Content and format, language and supplements of the prospectus 187 1 Content requirements 187 2 Format 188 3 Supplements 189 4 Language 189 V Publication and advertisements 190 1 Method of publication 190 2 Advertisements 190 VI Use of prospectus approved in other (non-EU and non-EEA) countries 190 VII Sanctions 191 VIII Prospectus liability 192 IX Rules applicable to transactions and securities not subject to the Directive and Regulations 193 X Conclusion 194
I II III
I
12.1
Introduction
The law 24/1988, of 28 July, on the Securities Markets (the SML) sets out the basic legal framework governing capital markets in Spain. The SML has been the subject of several substantial reforms over the years, but still represents the main body where the legal foundations are laid on key matters such as the definition of securities, the role of the agents involved in capital markets, the principles governing the issuance and offering of securities, etc. Under the Spanish legal regime, laws approved by the Spanish Parliament set out basic legal principles, whilst the rules, policies, codes and the specific
182
Spain
12.3
guidance are left for the regulations to be produced by the Spanish Government (normally enacted under the form of Royal Decrees, Ministerial Orders or Circulares, depending on the degree of detail required and the need to adjust from time to time to the changing conditions in the market). 12.2 Until the implementation of the Prospectus Directive, the offering of securities was regulated under Royal Decree 291/1992 and the Ministerial Order dated 12 July 1993, which among other things spelled out the rules governing the content of the prospectus to be published in Spain in the event of a public offer or a request for admission to trading, the exemptions of the obligation to publish a prospectus and other related issues. These rules have been repealed following the implementation of the Prospectus Directive as discussed below . The Prospectus Directive implementation process was completed in two stages: (1) On 11 March 2005, the Spanish Government enacted Royal Decree Law 5/2005 (the RDL 5/2005) on urgent reforms to encourage productivity and improve public procurement. This law was intended to implement the core principles of the Prospectus Directive by restating Title III of the SML. However, RDL 5/2005 only incorporated a limited number of the main provisions of the Prospectus Directive, including: (i) the obligation to publish a prospectus (Art. 3 Dir.); (ii) prospectus summaries (Art. 5(2) Dir.); (iii) mutual recognition of prospectuses (Art. 17 Dir.); (iv) precautionary measures (Art. 23 Dir.); and (v) prospectus liability (Art. 6 Dir.). (2) RDL 5/2005 did implement a number of principles included from the Prospectus Directive, but lacked the required level of detail. Accordingly, full implementation in Spain required the enactment of additional regulations. Though the deadline for the implementation of the Prospectus Directive into local law was missed, full implementation was achieved following the enactment of: (a) Royal Decree 1310/2005 of 4 November 2005, partially developing the SML on the admission to trading of securities in official secondary markets, public offerings of securities and the prospectus required for such purposes (the RD 1310/2005), and (b) Ministerial Order EHA/3537/2005, of 10 November 2005 (the EHA Order 3537/2005, together with RD 1310/2005, RDL 5/2005 and the SML, the Spanish Securities Market Regulations or Regulations). Adjusting the pre-Prospectus Directive regulations to the new principles contained in RDL 5/2005 caused a significant number of legal uncertainties and practical difficulties during the interim period running from the enactment of RDL 5/2005 (March 2005) until the enactment of RD 1310/2005 (November 2005). In order to help cover this gap, the Spanish capital market regulator (the Comisin Nacional del Mercado de Valores, or CNMV) 183
12.3
12.3
published in July 2005 a helpful notice intended to provide interim solutions in a number of areas of concern. This notice also anticipated the way in which the CNMV would presumably interpret the new legal framework in a number of relevant areas where the law and regulations lacked the appropriate level of detail. The CNMVs notice also stated that certain provisions in the Prospectus Directive, though not yet implemented by local laws, were drafted in such sufficiently precise terms that allowed it to reach direct effect, so that issuers and offerors, as well as anybody asking for the admission of securities for trading, could benefit from them even before the implementation process had been completed .1 12.4 The most relevant amendments introduced by the new legislative developments can be summarised as follows:
Former requirements to file with the CNMV a prior notification (comunicacin previa) regarding listing and public offerings of securities are now removed, thus reducing the bureaucratic burdens and facilitating the process. The approval process is now subject to a strict timeline, where the CNMV has shortened the terms formerly allowed to produce its rulings. The number and scope of the exemptions to the duty to produce and register a prospectus in relation to certain public offerings or sale of securities are increased and widened. Listing and offering requirements are regulated in a single set of rules on the basis of a common set of principles. The EU passport ensures the ability to use the locally approved prospectus in a variety of EU jurisdictions without going through the approval process again. The terms under which the issuer (and other parties involved in the offering process) assume liability for the contents of the prospectus, is regulated in depth. Printing of a prospectus is no longer the only available means to ensure that the prospectus is distributed. Certain formalities normally associated with the issuance of debt securities (such as the need for a notarial deed, official publications and/or registration of the issuances with the Commercial Registry) have now been removed and/or simplified to a large extent .
12.5
The Regulations include amongst the securities subject to the principles in the Prospectus Directive, certain types of money market instruments with maturity less than twelve months (pagars). By way of exception, these issuers are not required to remit annual information, need not produce a summary of the prospectus, but cannot have access to the EU passport regime .
184
Spain
12.12
II
12.6
Competent authority
In Spain, the CNMV acts as a public agency with independent legal status. The CNMV operates as the competent authority for the purposes of the Prospectus Directive. The CNMV is entrusted with the surveillance and supervision of the securities markets, and it also participates in producing market regulation. The CNMV shall be deemed the competent authority with respect to all transactions submitted to the Regulations. These include: (i) listing of securities in Spanish secondary markets; and (ii) public offerings and issuances, as well as prospectuses, if and to the extent Spain is the home Member State. Spain shall be regarded as the home Member State in accordance with the rules set out under Article 2(1)(m) of the Prospectus Directive .
12.7
III
12.8
Prior approval procedure and appeal

The Regulations implementing the Prospectus Directive provide for terms and conditions that are generally equivalent to those of the Prospectus Directive. Accordingly, the following sections will outline the major differences between the relevant provisions in RDL 5/2005 and RD 1310/2005, and the corresponding rules under the Prospectus Directive.2
1
12.9
Prior administrative authorisation

As a general principle, the Regulations provide that the issuance and offering of securities in Spain shall not be subject to prior administrative authorisation. Any pre-existing limitation has now been removed. Likewise, no prior administrative authorisation is required for the admission to trading of securities (listing) in a Spanish secondary market. The above notwithstanding, unless covered by an exemption, listings and offerings in Spain shall be subject to the filing, registration and, where necessary, approval by the CNMV of: (a) certain information regarding the issuer and the securities; (b) audited financial statements of the issuer; and (c) a prospectus, which will be subject to certain publicity requirements.
12.10
2
12.11
Public offer and admission to trading

Under RDL 5/2005, a public offering of securities in Spain is any form of communication with third parties in any manner and under any form that provides sufficient information on the terms of the offer and the securities, thus allowing the investor to decide upon the acquisition or subscription of any such security. An offer shall not be deemed a public offering where: (a) it is exclusively addressed to qualified investors; (b) it is addressed to fewer than 100 individuals 185
12.12
12.12
or entities per Member State, excluding qualified investors; (c) it is addressed to investors that acquire no less than 50,000 each, for each separate offer; (d) the securities have an individual nominal value of no less than 50,000; and (e) the securities represent an aggregate total value of less than 2,500,000 during a twelve months period . Where an offer does not qualify as a public offering, there is no need to file for approval of a prospectus. However, any subsequent sale of any security that may have gained access to any of the above exemptions shall nonetheless be treated as a separate offer and, thus, will be assessed on its own merits so as to confirm if it does qualify as a public offering or not . The Regulations have effectively widened the scope of the so-called private placement exemptions, which used to safe harbour certain offerings addressed to institutional investors as well as to the general public to the extent that the large nominal value of the securities, or the reduced size of the offering, suggested the existence of a very limited distribution or a sophisticated targeted investor. 12.13 Qualified investors include those formerly regarded as institutional investors (such as banks, investment firms, insurance companies, pension funds, collective investment schemes, public institutions, etc.) , as well as: (a) individuals that expressly request to be treated as such and comply with certain criteria associated with a certain command and expertise of the capital markets; and (b) small- and medium-sized entities (SMEs under the Regulations) that voluntarily adhere to the qualified investors regime . It is worth noting that the relevant registers of qualified investors will not be maintained by the CNMV, but by investment services companies and credit institutions providing investment services, which registers shall be made available to all issuers upon request (Art. 30 RD 1310/2005) . The concept of qualified investor is thus broader than the institutional investor exemption available under the old regime .
3
12.14
Exemptions
There are a number of exemptions from the prospectus requirement for public offerings, which can be divided into the following categories: (i) shares issued in substitution for outstanding shares of the same class, to the extent that the share capital is not increased; (ii) securities offered in connection with certain transactions, such as takeovers or mergers, provided a document is made available containing information the CNMV regards as equivalent to that contained in a prospectus, in light of EU regulations; (iii) shares offered free of charge to existing shareholders and dividends paid in the form of shares of the same class as those for which the dividends are paid, to the extent a document is made available containing
186
Spain
12.16
information on the number and nature of the shares, and the reasons and details of the offering; (iv) securities offered to directors and/or employees or former employees by their employer or a company of the same group, to the extent the securities offered are already admitted to trading on an EU or an EEA regulated market, and a document is made available containing information on the number and nature of the securities, and the reasons and details of the offering; (v) non-equity securities issued by certain public authorities and bodies, as well as securities guaranteed by the Spanish State; and (vi) certain non-equity securities issued by credit institutions under the form of programmes on a continuous or regular basis. This rule is expressly intended to allow for the issuance and offerings of commercial paper by Spanish credit institutions in an agile way, thus doing away with the need to file prospectuses for each programme . 12.15 Exemptions that apply only to the admission of transferable securities to trading on a regulated market include, in addition to those that mirror the securities which are exempt in a public offering (see no. 13 of this report), the following: (i) shares representing, over a twelve-month period, less than 10 per cent of shares of the same class already admitted to trading on the same regulated market; (ii) shares resulting from the conversion of other securities or the exercise of rights (i.e., warrants, options or convertibles), to the extent those shares belong to the same class already admitted to trading on the same regulated market; and (iii) securities where there is no prospectus to passport into Spain but the company nevertheless meets certain conditions (e.g., the securities have been traded on another regulated market for at least eighteen months) .
IV 1
12.16
Content and format, language and supplements of the prospectus Content requirements
As per the Prospectus Directive, the Regulations set out that the prospectus shall contain all information which, according to the nature of the issuer and the securities, is necessary to enable investors to make an informed assessment of, broadly speaking, the financial position (assets and liabilities, financial situation, profits and losses) and prospects of the issuer, the guarantor, if any, and the rights attached to the securities. The information in the prospectus must be produced in a clear and easily understandable manner. Under EHA Order 3537/2005, the CNMV has referred to the templates for each type of prospectus as contained in the Prospectus Regulation. As a side 187
12.16
issue, the CNMV has led a number of reviews from various market authorities with a view to produce more detailed templates of certain information, including the one produced by the CNMV and AIAF Mercado de Renta Fija on May 2005 and which refers to the offering and listing of fixed income securities. These templates are voluntary (offerors and issuers need not follow them), but certainly involve a reduction in terms of timing requirements and costs . 12.17 The obligation to include a summary in the prospectus (which, according to the former rules, was only required in Spain in certain specific cases under the form of the so-called trptico or three-page summary) has been implemented by RDL 5/2005. The summary (which shall not be necessary for issuances and offerings involving non-equity securities with a nominal value in excess of 50,000) will include brief, non-technical wording setting out the key characteristics of the securities and the risk factors associated with the issuer, the guarantor, if any, and the securities. Likewise, the summary will include warnings as per the terms of Art. 5(2) Dir., though RDL 5/2005 omits the Prospectus Directive requirement that such summary contains a warning that, where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under the national legislation of the relevant Member State, have to bear the costs of translating the prospectus before legal proceedings can be initiated. Unlike other jurisdictions, the Regulations have not set out a maximum number of words for the summary, though the CNMV recommends that it does not exceed 2,500 words . Moreover, RD 1310/2005 requires that the prospectus summary must always be translated into Spanish unless the relevant prospectus relates to non-equity securities having a nominal value of at least 50,000 or the CNMV waives such translation requirement in light of the specific circumstances of the offer or listing request . The CNMV may allow the omission of certain information in the prospectus as per the terms of Article 8 of the Prospectus Directive .
12.18
2
12.19
Format
Under the Regulations, a prospectus can be drawn up, at the discretion of the issuer, as a single document (which will remain valid for transactions within the twelve months following the date the prospectus is first published) or as three separate documents (which will remain valid for transactions within the twelve months following the date the registration document is first published, provided the securities note is updated with any such relevant information as is material to the securities and the offeror or issuer) . A prospectus consisting of three separate documents should include: (a) a registration document with information relating to the issuer (issuers may request the CNMV to accept their audited annual financial statements as a registration document, if they contain the information required to be included in such
12.20
188
Spain
12.25
document. The CNMV would, in such circumstances, be entitled to require issuers to provide a correspondence table indicating where the sections of the relevant Annex of the Prospectus Regulation have been addressed in the financial statements); (b) a securities note with information relating to the securities to be offered or admitted to trading; and (c) the summary (as described above) . The registration document is valid for twelve months and is thus available for use in the context of other offerings or listings within that period of time, subject to the inclusion of a separate securities note for each specific transaction . 12.21 The Regulations contemplate the use of a base prospectus, that is, a prospectus setting out all relevant information to be included in a prospectus, except for the final terms and conditions of the relevant offer or issuance. These are unknown at the time the base prospectus is approved, and can only be determined at the time of issuance. The final terms and conditions can only relate to information to be included in the securities and need not be approved by the CNMV, though will be subject to stringent publicity requirements. The base prospectus is only available for the issuance or offering of non-equity securities and warrants issued under programmes or on a continuous or regular basis .
12.22
3
12.23
Supplements
According to the Regulations, if any significant new fact arises or material mistake or inaccuracy in the prospectus comes to light from the time of approval of the prospectus to either the close of the offering or the commencement of trading, as the case may be, a supplement to the original prospectus must be filed for approval by the CNMV. The approval process should be completed within five business days (thus shortening the seven business day maximum allowed under the Prospectus Directive) and the supplement must be publicised in the same terms as the prospectus was. If necessary, the summary shall be duly adjusted to reflect the contents of the supplement . In addition, the Regulations provide that the withdrawal right granted to investors by Article 16(2) of the Prospectus Directive shall be exercised within a period of no less than two business days after the publication of the supplement. Surprisingly enough, the rules do not ask for a maximum time limit to this effect. Therefore, the maximum time limit for the exercise of withdrawal rights may be unclear in those (unlikely) situations where issuers and offerors have failed to specify it in the relevant supplement .
12.24
4
12.25
Language
Prospectuses relating to trading requests in an Spanish secondary market or to offerings in Spain may be drafted, at the discretion of the offeror, in the Spanish language, in a language that is customary in the sphere of international finance 189
12.25
(which is widely understood as referring to the English language; the CNMV has confirmed this view) or in another language authorised by the CNMV . 12.26 If the approval is sought for a listing prospectus relating to admission to trading in EU and EEA markets other than Spain, then the prospectus language will be, at the discretion of the offeror, a language commonly accepted by the concerned EU Listing Authorities or in a language that is customary in the sphere of international finance (i.e., the English language), with the summary being translated into the local languages if so requested by the concerned EU Listing Authorities . The CNMV will require a Spanish translation of the summary of a non-CNMV approved prospectus if the issuer is seeking the listing in a Spanish secondary market. The Regulations allow the CNMV to do away with such requirements in light of special circumstances (a vague and undefined term), and further provide for an exemption in case of the offering of non-equity securities with a nominal value in excess of 50,000 .
12.27
V 1
12.28

Article 14 of the Prospectus Directive grants two rights to home Member States, which Spain has chosen not to exercise. The first of these is the right of a home Member State to require an issuer that chooses to publicise a prospectus by insertion in a newspaper or by making it available in printed form, to complement these means by publishing it in electronic form on the web page of the issuer/offeror and those of the underwriters and placement agents . The second of these is the right of a home Member State to require publication of a notice stating how the prospectus has been made available, and where it can be obtained by the public . As a result, neither of these features of Article 14 of the Prospectus Directive is a requirement of Spanish law .
2
12.29
Advertisements
The Regulations have fully implemented Article 15 of the Prospectus Directive. Unlike the prior regime, the new regulations allow for advertisements to be released before the prospectus has been approved. As a matter of practice, and though advertisements need not be subject to approval by the CNMV, offerors and issuers commonly submit draft advertisements to the CNMV in advance and listen to its views and comments.
VI
12.30 190

As stated in Article 20(1) of the Prospectus Directive, RD 1310/2005 provides that the CNMV, to the extent that Spain is the home Member State for the
Spain
12.32
relevant purposes, may approve a prospectus drawn up by a non-EU issuer or offeror, if such prospectus: (a) has been drawn up in accordance with international standards set by an international securities organisation, including the IOSCO disclosure standards; and (b) the information requirements, including information of a financial nature, are equivalent to the requirements under the RD 1310/2005 or developing legislation. In this regard, the following documents are deemed to meet the information requirements referred to in (b) above: (i) the annual accounts drawn up in accordance with, among others, international accounting standards or with generally accepted accounting principles; and (ii) the annual accounts audited in accordance with, among others, international audit standards or with generally accepted international audit principles .
VII
12.31
Sanctions
Article 30 of the SML states that when Spain is a host Member State, the CNMV must inform the competent authorities of the home Member State if it notices that the issuer or the financial institutions in charge of the public offer have committed irregularities or if it observes breaches of the issuers obligations deriving from the admission to trading in a regulated market. In the event that the issuer or the financial institution in charge of the public offer continues to breach the relevant legal or regulatory provisions, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate, the CNMV, after informing the competent authority of the home Member State, will take all the appropriate measures in order to protect investors, immediately informing the European Commission of these measures. In addition to the general right of the CNMV to request additional information from the offerors and issuers (as well as from their controlling shareholders, directors, top executives, etc.), and from certain relevant parties involved in the offering or listing processes (such as any financial intermediary and auditors), Article 44 of RD 1310/2005 sets forth the authority of the CNMV in respect of sanctions which may be imposed for breach of the provisions of the Regulations. These include, among others, the right of the CNMV to adopt the following precautionary measures: (i) to suspend a public offer or an admission to trading, for a maximum term of ten consecutive business days in each case; (ii) to prohibit or suspend public advertisements, for a maximum term of ten consecutive business days in each case; (iii) to prohibit a public offer. 191
12.32
12.32
If the relevant securities have already been admitted to trading, the CNMV may: (i) suspend trading on a Spanish official secondary market or other regulated market for a maximum term of ten consecutive business days in each case, or request the relevant governing body of the market to order such suspension, if the CNMV has evidence that the provisions of RD 1310/2005 have been breached or if the CNMV believes that said measure is advisable for the purposes of protecting the investors; (ii) exclude from trading on a Spanish official secondary market or a regulated market if the CNMV deems that the provisions of RD 1310/2005 have been breached. Such resolutions shall be adopted, in any event, after first hearing the interested party, without prejudice to any preventive measures that may be adopted .
VIII
12.33
According to the Regulations, liability for the information contained in the prospectus lies with: (a) the issuer; (b) the offeror; (c) the person requesting admission to trading in an official secondary market; (d) the directors of all the aforementioned parties; and (e) the guarantor, with respect to the information that this person is required to prepare. In addition, the lead manager in a transaction involving the first admission to trading of the shares of a company in a Spanish secondary market, which had been preceded by a public offering of the shares, shall be held responsible with respect to the information contained in the securities note of the prospectus. To this effect, the lead manager shall be required to carry out any such verifications as are reasonably necessary, in light of commonly accepted market standards, to confirm that the information in the securities note with respect to the transaction or the securities is not false, nor that there is any omission of relevant information. For these purposes, a lead manager is any such financial intermediary mandated in order to assist in setting the financial, timing or commercial conditions of the offer, as well as to coordinate the relations with the regulatory authorities, market parties, potential investors and other underwriters and placement agents. Finally, parties potentially liable for the contents of a prospectus include: (a) any other persons who explicitly assume liability for the content of the prospectus, as long as this acceptance is contained in the prospectus; as well as (b) those persons who have authorised all or part only of the content of the prospectus (to the extent the relevant section has been reflected in the same terms as authorised) .
12.34
12.35
12.36
192
Spain
12.41
12.37
As regards the summary, no civil liability can be attributed to any person solely on the basis of the summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus . The prospectus must identify the persons who are liable for the information contained therein, with their name and post, or, in the case of legal persons, their corporate names and registered offices. These persons must declare that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission which could affect its contents . The statute of limitations for this type of liability shall expire in three years from the time the claimant could have been aware of the false information or omission in the prospectus. Finally, the Regulations provide that where the offeror is a person different than the issuer, the offeror may be exempted from prospectus liability if the issuer has drafted the relevant prospectus and agrees to take responsibility for its contents. The prospectus liability shall be avoided to the extent the relevant party can provide evidence that, at the time the prospectus was published, it acted in a diligent manner to ensure that the information in the prospectus was true or that the omissions that led to the damage had been properly left out of the prospectus. This rule shall not apply inasmuch as any such person, following publication of the prospectus, gained knowledge of the falsehood or omission but failed to take the relevant steps to inform diligently those persons affected during the period when the prospectus remained in force .
12.38
12.39
IX
12.40
Rules applicable to transactions and securities not subject to the Directive and Regulations
The Regulations apply to the offering of any kind of negotiable securities as per the definition contained in RD 1310/2005. The definition explicitly excludes: (a) contracts for future and options (though Art. 1.3 of RD 1310/2005 has explicitly admitted within its scope certain financial contracts); and (b) shares or units in open-ended funds. Both types of contracts and securities are the subject of specific offering and listing regulations. The offering of shares or units in open-ended funds is contained in Law 35/2003 on Collective Investment Institutions and Royal Decree 1309/2005, of 4 November 2005, approving the Regulations of Law 35/2003 on Undertakings for Collective Investment and adapting the tax regime of Undertakings for Collective Investment. For open-ended collective investment institutions, institutions compliant with the investment policies laid down by the UCITS EU Directive 85/611/EC 193
12.41
12.41
(commonly referred to UCITS funds) must be registered with the CNMV through a standard and simple procedure. Other non-UCITS funds are subject to a different authorisation procedure by the CNMV .
X
12.42
Conclusion
In making use of the opt-out rules and alternatives set out under the Prospectus Directive, RD 1310/2005 implemented standard EU requirements for the approval of the prospectus and established a system for listing and approving the public offering of securities that is comparable to those of the most advanced jurisdictions, enabling Spains securities markets to improve their competitiveness. The Spanish legislator has gone beyond a mechanical implementation of EU laws, and has set out to provide a modern, effective and efficient listing and offering regulatory framework, which enables the Spanish securities markets to remain competitive and avoids the risk of local issuers setting out to take advantage of the Prospectus Directive and Prospectus Regulation under other more potentially beneficial jurisdictions.
Notes
1. According to the CNMV notice, those Prospectus Directive provisions were: paragraphs (m) and (n) of Article 2 (which deal with the definition of home Member State and host Member State); Article 4 (regarding the types of securities in relation to which the obligation to publish a prospectus is exempted); last paragraph of Article 5(4) (relating to the final terms of the base prospectuses); Arts. 9(1), 9(2) and 9(4) (dealing with the twelve-month validity of prospectuses, base prospectuses and registration documents); Article 11 (incorporation by reference); Arts. 13(2)13(5), on the time limits for approval of the prospectus and the possibility of transferring prospectuses between competent authorities; Arts. 14(1), 14(2) and 14(4)14(7), on publication of the prospectus; Article 15(2), on advertisements; Article 18, regarding notification of the passport for the prospectuses; and Article 19, regarding the languages of the prospectuses. 2. Annexe 1 includes a chart that intends to facilitate the identification of the specific sections in RD 1310/2005 which implement each of the rules set out under the Prospectus Directive .
194
13 Sweden
Ja n A n de r s s on
Jnkping International Business School, Linkping University
Introduction 195 Competent authority 196 Procedure of prior approval and appeal 196 1 Obligation to publish a prospectus 196 2 Exemptions 196 A General 196 B Offers to the public 197 C Trading on a capital market 198 IV Content and format, language and supplements of the prospectus 199 1 Content 199 2 Format 199 3 Supplements 199 4 Language 200 V Publication and advertisements 200 1 Methods of publication 200 2 Advertisements 201 VI Prospectus approved in other (non-EU and non-EEA) countries 201 VII Sanctions 201 VIII Prospectus liability 201 IX Rules applicable to transactions and securities not subject to the Directive or Regulation 202
I II III
I
13.1
Introduction
The previous Swedish legislation concerning the prospectus for the public offering of securities was regulated in several different laws. With the Prospectus Directive the Swedish legislator substantially revised the legislation and from 1 January 2006 all rules concerning prospectuses are to be found in the Swedish Securities Trading Act (lag om handel med finansiella instrument [nr 1991:980 as amended]).1 195
13.2
II
13.2
Competent authority
With the changes in the Swedish Securities Trading Act only one competent authority supervises the public offering of securities, i.e., the Swedish FSA (Finansinspektionen), while in the past the approval was shared between the different stock exchanges in Sweden and the Swedish FSA. Although the Prospectus Directive contains a right for the competent authority to delegate some powers to other organs, this power was not used by the Swedish legislator to delegate powers from the Swedish FSA .
III 1
13.3
Procedure of prior approval and appeal Obligation to publish a prospectus

The Swedish Securities Trading Act (the SSTA) requires a prospectus to be published whenever a negotiable instrument is to be offered to the public or is to be traded on a capital market unless particular exemptions apply (ch. 2 1; hereafter 2:1 and so forth). In accordance with the preliminary workings which preceded the legislation, a prospectus has to be published whenever a negotiable instrument is intended for public circulation. A negotiable instrument should be considered to be intended for public circulation if it is constructed in such a way that it easily and simply can be negotiated on a regulated market. This also means that other negotiable instruments, for instance shares in private companies and such financial instruments which cannot be transferred, are not covered by the Prospectus Regulation. Besides the obvious situations where there is an offer to the public, a less obvious example is when people are invited to join a formation of a company on a homepage. Another example is when an invitation by mail or email is sent to a number of people, for instance shareholders, members of an association or the inhabitants of a town. However, the legislator has not tried to define the term offered to the public .
2
A
Exemptions
General
13.4
In general, exemptions from the obligation to publish a prospectus under the Swedish Securities Trading Act are based foremost on Article 1 of the Prospectus Directive and the different exemptions contained therein, in particular Articles 1(2)(a), 1(2)(b), 1(2)(d) and 1(2)(i) (which originated from Sweden). The optional exemption in Article 1(2)(h) of the Prospectus Directive (no prospectus has to be published if the consideration for the offer is less then 2.5 million), but above the absolute minimum of 100,000 in Article 3 (according to which no prospectus can ever be required by the Member States), has been implemented
196
Sweden
13.5
as 1 million in Sweden (see below). See Article 2:23 of the Swedish Securities Trading Act .
B Offers to the public
13.5
Under the Swedish Securities Trading Act (Art. 2:4) no prospectus needs to be published when a negotiable instrument is offered to the public, in the following situations: (i) the offer is directed to qualified investors; (ii) the offer is directed to less than 100 natural or legal persons, who are not qualified investors, in a Member State of the European Economic Area (EEA); (iii) the offer concerns the purchase of negotiable instruments for an amount equal to at least 50,000 for each investor; (iv) each of the negotiable instruments has a nominal value which equals at least 50,000; or (v) the amount which in total shall be paid by the investors for a period of twelve months equals no more than 1 million. Furthermore, when negotiable instruments are offered to the public no prospectus need be published (Art. 2:5 SSTA) if the offer concerns: (i) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase of the issued capital; (ii) securities offered in connection with a public takeover bid, if the FSA has approved a document equal to that of a prospectus; (iii) securities offered, allotted or to be allotted in connection with a merger, provided that a document is available containing information which is regarded as being equivalent to that of the prospectus and the FSA has not made a decision requiring a prospectus to be published; (iv) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; or (v) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the securities and the reasons for and detail of the offer . 197
13.6
Trading on a capital market
13.6
In addition, the Swedish Securities Trading Act (Art. 2:6) does not require a prospectus to be published when a negotiable instrument is intended for trading on a capital market if: (i) the shares represent, over a period of twelve months, less than ten per cent of the number of shares of the same class already admitted to trading on the same capital market; (ii) the shares are issued in substitution for shares of the same class already admitted to trading on the same capital market, if the issuing of such shares does not involve any increase of the issued share capital; (iii) the securities are offered in conjunction with a public takeover bid, provided that a document is available containing information which is regarded as being equivalent to that of a prospectus and the FSA has approved the document; (iv) the securities are offered, allotted or to be allotted in connection with a merger, provided that a document is available containing information which is regarded as being equivalent to that of the prospectus and the FSA has not made a decision requiring a prospectus to be published; (v) the shares are offered, allotted or to be allotted free of charge to existing shareholders, and dividends which are paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the shares and the reasons for and detail of the offer; (vi) the securities are offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the securities and the reasons for and detail of the offer; or (vii) the shares result from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market. As regards securities which are offered but which are of the same class of securities which for eighteen months have been admitted to trading on another regulated market within the EEA, the Swedish Securities Trading Act (Art. 2:7) does not require a prospectus to be published. However, further conditions have to be met. This rule corresponds to and is an implementation of Article 4(2)(h) of the Prospectus Directive.
198
Sweden
13.9
If a prospectus is intended to be published despite the fact that the exemptions apply, the requirements regarding prospectuses in the Swedish Securities Trading Act as well as the requirements of the Prospectus Regulation have to be met (Art. 2:8 SSTA) .
IV 1
13.7

The minimum requirements as to the contents of the prospectus are laid down in the Swedish Securities Trading Act with further reference to the Prospect Regulation. The Swedish Securities Trading Act requires the prospectus to contain all information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of rights attached to the securities attached (Art. 5(1) Dir.; Art. 2:11 et seq. SSTA and applicable rules from the Swedish FSA).
2
13.8
Format
The prospectus may in accordance with the Prospectus Directive be prepared as either one document or three separate documents. In the latter case the prospectus is divided into: (i) a registration document; (ii) a securities note; and (iii) a summary. The registration document must contain information about the issuer. However, a prospectus can be prepared in a simple version. This is in accordance with Article 5.4 of the Prospectus Directive, but only applies to a limited number of securities such as non-share related negotiable instruments which are issued within an offering programme. In the simpler version of the prospectus, the offer price and number of securities do not have to be disclosed (Art. 2:13 SSTA) .
3
13.9
Supplements
The Swedish Securities Trading Act requires any significant new fact, material error or inaccuracy relating to the information in the prospectus which occurs until the closing of the offering or the start of the trading on a capital market, and which may effect an investors assessment of the securities, to be published in a supplement to the prospectus. The summary of the prospectus must be updated in accordance with the new information in the supplement if it is necessary to reflect the information in the supplement. Any investor who prior to the publication of the supplement has already agreed or subscribed to the securities is entitled to withdraw their acceptance within five working days following the publication of the supplement . The supplement must be approved by the FSA (Art. 2:34 SSTA) . 199
13.10
4
13.10
Language
The language of the prospectus must be in Swedish unless the FSA in an individual case decides that another language may be used. If the prospectus concerns non-share related negotiable securities which each has a nominal value of at least 50,000 and which are to be traded on a capital market in Sweden, the prospectus may be published in another language which is common on the international financial markets . Other languages may be used if there is a cross-border element in the offer, i.e., when the offer is outside Sweden but Sweden is the home State or another State within the EEA is the home State but the public offer is in Sweden (Art. 2:21 et seq. SSTA) .
V 1
13.11
Publication and advertisements Methods of Publication

A prospectus can only be published when it has been approved and registered by the FSA. This must be done by the issuer, the person who is responsible for the offer or the person who applies for the negotiable instruments to be traded on a capital market. The publication must be as soon as possible and no later than the day before the time starts for the offer or the securities in question is traded. The following methods of publication are possible: (i) in one or more nationwide newspapers or newspapers with extensive coverage within the EEA provided the public offer is made via an offer to the public or the capital market where the securities are to be traded; (ii) in a written form, placed free of charge at the disposal of the public at the place of the business of the market where the securities are admitted to trading, as well as the place of business of the issuer and the financial companies placing or transacting the sale of securities; (iii) in electronic form on the website of the issuer and, where applicable, on the website of the financial companies placing or transacting the sale of securities; or (iv) in electronic form, via the information system of the capital market where the application for listing or admission for trading is made. In case of electronic publication, the prospectus must be made available upon the investors request in physical form free of charge by the issuer, the person who is responsible for the offer, the person who applies for the negotiable instruments to be traded on a capital market or the financial companies placing or transacting the sale of securities (Art. 2:28 et seq. SSTA).
13.12
200
Sweden
13.16
2
13.13
Advertisements
The advertisement of a negotiable instrument to be offered to the public or to be traded on a capital market must contain information that a prospectus has been or will be published and indicate where investors are or will be able to obtain it. In addition, the advertisement must clearly show it is an advertisement and the information contained in an advertisement must not be inaccurate or misleading. The information in the advertisement must be consistent with the information contained in the prospectus or, if no prospectus has been published, the information required in the prospectus which is to be published (Art. 2:32 SSTA). Any other information concerning the offer, which is not an advertisement, must be consistent with that in the prospectus (Art. 2:33 SSTA).
VI
13.14
Prospectus approved in other (non-EU and non-EEA) countries

Article 2:25 of the SSTA provides that if Sweden is the home Member State in cases were the issuer has its registered office in a country outside the EU or the EEA, the Swedish FSA will be competent to approve the prospectus if: (i) the prospectus has been drawn up in accordance with the rules in the country which is the issuers home state; and (ii) the information requirements under the law of the relevant country are equivalent to the requirements set forth in the SSTA and the Prospectus Regulation.
VII
13.15
Sanctions
The Swedish Securities Trading Act and rules therein are enforced by the FSA. The FSA has several different sanctions at its disposal such as administrative fines and may also forbid further trading (Art. 6:23e SSTA). The Swedish Penal Code may also apply in serious cases.
VIII
13.16
When an offer is made to the public which concerns the issue of negotiable instruments, the prospectus must be prepared by the issuer. If the offer to the public concerns the purchase of shares, convertible bonds, share subscription rights or options from someone who is in the possession of such negotiable instruments, the prospectus must be drawn up by the issuing company. Other prospectuses concerning offers to the public must be drawn up by the person who is responsible for the offer (Art. 2:9 SSTA).
201
13.17
13.17
The rules on civil liability for an incomplete prospectus or errors in prospectus are laid down in the Companies Act 2005 (Chapter 29, Art. 1) and were introduced when the Prospectus Directive was implemented. In general, prospectus liability lies with the members although individually of the board of directors of the company. Liability can be invoked by the company, the shareholders or other third parties, such as investors. Liability requires at least negligence. Even if the legislative change was one step forward in legal development in Sweden, it is still not clear to what extent and under which circumstances financial companies placing or transacting the sale of securities have a civil liability in tort nor if and to what extent such companies can and should be able to redirect the liability towards the issuing company.
IX
13.18.
Rules applicable to transactions and securities not subject to the Directive or Regulation
As mentioned in the introduction, all rules concerning prospectuses are to be found in the SSTA. In cases were the Prospectus Directive does not apply, the SSTA remains applicable.
Notes
1. See in detail the preliminary workings to the legislation, especially proposition 2004/05:158 Prospekt.
202
PA RT I I I Application in the EEA Member States
14 Iceland
la f u r A r i n b jr n Sigu r s s on h dl. Logos Legal Services
Introduction 205 Competent authority 206 Prior approval and appeal procedures 207 1 Offering of securities to the public 207 A Procedure 207 B Exemptions 208 2 Admission to trading on a regulated market 208 A Procedure 208 B Exemptions 208 IV Content and format, language and supplements of the prospectus 209 1 Content 209 2 Format 210 3 Supplements 210 4 Language 210 V Publication and advertisements 211 1 Method of publication 211 2 Advertisements 212 VI Use of a prospectus approved in other (non-EU and non-EEA) countries 212 VII Sanctions 213 VIII Prospectus liability 214 IX Conclusion 214
I II III
I
14.1
Introduction
Iceland implemented the Prospectus Directive by Act No. 31/2005, which amended the Act on Securities Transactions No. 33/2003. On 1 November 2007, Act No.33/2003 on Securities Transactions was replaced by a new Act on Securities Transactions No. 108/2007 (the Securities Act). The rules governing the publication of a prospectus in the event of a public offering of securities or a request for admission to trading on a regulated market were laid down in Chapter VI of the Securities Act. The aforesaid rules governing the publication 205
14.1
of a prospectus were taken up practically unchanged in the Securities Act from the previous Act. 14.2 Following the implementation of the Prospectus Directive into Icelandic law, four new regulations on public offering of securities and request for admission to trading on a regulated market were adopted. The purpose of these regulations is to implement further the requirements set by the Prospectus Directive. The aforesaid regulations are, first, Regulation No. 242/2006 on public offerings of securities with a total value of ISK210 million or more and the admission of securities to trading on a regulated market; second, Regulation No. 243/2006 on the adoption of Commission Regulation No. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements; third, Regulation No. 244/2006 on public offerings of securities with a total value of ISK8.4 million to ISK210 million; and fourth, Regulation No. 245/2006 on official admission to trading on a regulated market. Concurrent with the adoption of the four new Regulations, two Regulations were abolished, i.e., Regulation No. 434/1999 on official admission to trading on a regulated market and No. 630/2003 on trading in securities. No other legislation or circulars have been issued by the Icelandic Financial Supervisory Authority, the Fjrmlaeftirliti (Financial Supervisory Authority) (FME), except a fee schedule for review of prospectuses No. 1075/2005 . Prior to the implementation of the Prospectus Directive, the competent authority for the approval of prospectuses in Iceland was the Iceland Stock Exchange, known today as the OMX Nordic Exchange Iceland hf., which is the only regulated market in Iceland. However, following the implementation of the Prospectus Directive the FME took over as the competent authority.
14.3
II
14.4
Competent authority
The competent authority for the approval of prospectuses in Iceland is the FME. With respect to the public offering of securities and admission of securities to trading in Iceland, the FME shall oversee and is competent for the approval of prospectuses. The FME may, under the Securities Act, by agreement appoint a regulated market to handle prospectus approval. Such an agreement shall state what tasks are entrusted to the regulated market and the conditions for their performance. Compensation for prospectus approval shall be decided by the FME or the regulated market in question. With reference to the aforesaid, FME and OMX Nordic Exchange Iceland hf. concluded an agreement on the scrutiny
14.5
206
Iceland
14.7
and endorsement of prospectuses. The agreement was entered into force on 1 January 2006 and shall expire no later than 31 December 2011. The agreement shall be reviewed following the review of the Prospectus Directive, which is to be completed by 31 December 2008. If, at that point in time, the FME is no longer authorised to entrust a regulated securities market with the endorsement of prospectuses, the Agreement shall become invalid without any notice of termination and the FME will take over prospectus approval. 14.6 The FME is authorised to transfer prospectus approval to the competent authority of another Member State of the European Economic Area. The FME shall notify the issuer, the offeror or the person requesting admission on to trading on a regulated market about such transfer within three working days from the time of its decision. The time limit is ten days from that notification day .
III 1
A

Procedure
14.7
It is prohibited to offer securities to the public in Iceland, or to have securities admitted to trading on a regulated market, unless a prospectus has been approved by the FME, or OMX Nordic Exchange Iceland hf. in accordance with the agreement with the FME, or the competent regulatory authority of another Member State, in accordance with the Prospectus Directive. The procedure set forth in the Prospectus Directive has been implemented by the Securities Act. Moreover the applicant should file the following documents along with the draft prospectus: completed list of cross-references; the audited accounts of the company for the last three years, unless an exemption has been granted, signed by a certified public accountant, as well as the interim financial statements for the current year, if applicable; official confirmation of the companys registered share capital; a list of the shareholdings of the twenty largest shareholders and parties financially connected with them such as spouses, cohabiting partners, children who are not financially competent, and legal entities which they control; the current articles of association for the company; a list of insiders in accordance with the provisions of the Act on Securities Transactions; rules on treatment of insider information and insider trading if an issuer has adopted such rules; and a time plan for admission of shares to trading which has been prepared in consultation with the OMX Nordic Exchange Iceland hf . The FME will announce within ten working days of receipt of a request for approval of a prospectus whether it needs more information or if the prospectus is approved. This period is extended to twenty working days if the public offer involves securities issued by an issuer which does not have any securities 207
14.7
admitted to trading on a regulated market and who has not previously offered securities to the public. If the applicant does not receive a reply from the FME within the aforementioned ten-working-day period after having submitted a completed file, it shall not be deemed to constitute approval of the application. If the prospectus is rejected (or not approved within the statutory time limit), the applicant can take the FME rejection to the courts within three months from the date the applicant received the rejection, cf. Article 18 of the Act on official supervision of financial operations No. 87/1998, as amended .
B Exemptions
14.8
Article 50 of the Securities Act provides exemptions from the obligation to publish a prospectus for certain categories of securities. It fully corresponds to the exemptions set forth in Articles 3(2), 4(1) and (2) of the Prospectus Directive. The main private placement exemptions are that the following types of offers are exempted from publication of prospectuses: (i) an offer of securities addressed solely to qualified investors; and/or (ii) an offer of securities addressed to fewer than 100 natural or legal persons per Member State, other than qualified investors; and/or (iii) an offer of securities addressed to investors who acquire securities for a total consideration of at least ISK4,200,000 per investor, for each separate offer; and/or (iv) an offer of securities whose denomination per unit amounts to at least ISK4,200,000; and/or (v) an offer of securities with a total consideration of less than ISK84,000,000, which limit shall be calculated over a period of twelve months .
2
A

Procedure
14.9
It has been mentioned that securities may not be admitted to trading on a regulated market unless a prospectus has been approved by the FME, or OMX Nordic Exchange Iceland hf. in accordance with the agreement with the FME, or the competent regulator of another Member State. In this case, the procedure to request approval of the prospectus is the same as the procedure applicable to a public offering (see no. 7 of this chapter).
Exemptions
14.10
Article 50(3) of the Securities Act sets forth exemptions to the obligation to publish a prospectus for the admission to trading on a regulated market of certain categories of securities: see 8 above. The exemptions fully mirror those set forth in Article 4(2) of the Prospectus Directive .
208
Iceland
14.13
IV 1
14.11

In general, a prospectus should contain all information necessary, taking into account the nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, to enable investors to make an informed assessment of the assets and liabilities, financial position, financial results and prospects of the offeror, issuer and any guarantor and of the rights attached to such securities. The content of the prospectus should be in accordance with the Prospectus Regulation, implemented by Regulation No. 243/2006. The FME may (but is not obliged to) authorise the omission of certain information required by the Securities Act in the event that: (i) disclosure of such information would be contrary to the public interest; (ii) disclosure of such information would be seriously detrimental to the issuer, provided the omission is not likely to mislead the public with regard to facts and circumstances essential to an informed assessment of the issuer, the offeror or the guarantor, if any, and of the rights attached to the securities to which the prospectus relates; or (iii) such information is of minor importance and relates to a specific offer or admission to trading on a regulated market and is not such as to influence the assessment of the financial position and prospects of the issuer, the offeror or the guarantor, if any . Furthermore, the FME can permit that certain information is replaced with equivalent adequate information when the requirements of the Prospectus Regulation are inappropriate to the offerors or issuers scope of activity or corporate form or to the securities to which the prospectus relates. If there is no such equivalent information, this requirement shall not apply. Exceptionally, a prospectus can be drawn up in accordance with the national law of an issuer not having its registered office in the European Economic Area if: (i) the information incorporated in the prospectus is equivalent to the requirements of the Securities Act and Regulation No. 242/2006; and (ii) the prospectus is drawn up in accordance with international standards set by international securities commission organisations, including the IOSCO disclosure standards. Due to the uncertainty in relation to the demand in offering of securities, the offer price and number of securities to be offered are often not known when the prospectus is finalised. To the extent the final offer price and number of securities to be offered cannot be mentioned in the prospectus, mention should be made of the maximum offer price and the criteria and/or conditions in accordance with which the offer price and number of offered securities will be determined. Investors can withdraw their acceptance of the offer or subscription within a period of two working days following the announcement of the 209
14.12
14.13
14.13
final offer price. This announcement shall be made public in the same way as the prospectus . As provided for in Article 11 of the Prospectus Directive, the FME can also permit the incorporation of information by reference in the prospectus .
2
14.14
Format
The prospectus can, at the offerors or issuers discretion, be drawn up as a single document or as three separate documents. A prospectus consisting of three separate documents should include a registration document (with information relating to the offeror or the issuer), a securities note (with information relating to the securities to be offered or admitted to trading) and a summary note. For the public offering or admission to trading of certain types of securities (such as non-equity securities, including warrants in any form issued under an offering programme, or non-equity securities issued in a continuous or repeated manner by credit institutions), the prospectus can, at the choosing of the issuer, offeror or person requesting admission to trading on a regulated market, consist of a base prospectus containing all relevant information about the issuer and the securities offered or to be admitted .
3
14.15
Supplements
In the event a significant factor arises or a material mistake or inaccuracy occurs in the period between approval of the prospectus and the close of the offer or the admission to trading, the issuer (or offeror) should prepare a supplement to the prospectus. The supplement must be approved by the FME (or the competent regulator of another Member State, if the prospectus was approved in that State) within a maximum period of seven working days. The summary and any translations should also be amended to take into account the new information included in the supplement. Investors who have already agreed to purchase or subscribe to the securities have a right to withdraw their acceptance within a period of two working days following publication of the supplement .
4
14.16
Language
Article 12 of Regulation No. 242/2006 stipulates which language shall be used when the prospectus is prepared. The rules fully correspond with those set forth in Article 19 of the Prospectus Directive, implemented by Regulation No. 243/2006. Notwithstanding the aforesaid, the practice in Iceland is that prospectuses are generally prepared in English. Where an offer to the public is made or admission to trading on a regulated market is sought only in Iceland, the home Member State, the prospectus shall be drawn up in Icelandic or in a language accepted by the FME. Where an offer to the public is made or admission to trading on a regulated market is sought in one or more Member States, excluding Iceland as
210
Iceland
14.17
the home Member State, the prospectus shall be drawn up either in a language accepted by the competent authorities of those Member States or in English, at the choice of the issuer, offeror or person asking for admission as the case may be. Where an offer to the public is made or admission to trading on a regulated market is sought in more than one Member State, including Iceland as the home Member State, the prospectus shall be drawn up in a language accepted by the FME and shall also be made available either in a language accepted by the competent authorities of each host Member State or in English, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be. Where an offer to the public is made or admission to trading on a regulated market is sought in Iceland and Iceland is the host Member State, the prospectus shall be made available in a language accepted by the FME or in English, at the choice of the issuer, offeror or person asking for admission to trading, as the case may be. Where admission to trading on a regulated market of non-equity securities whose denomination per unit amounts to at least ISK4.2 million is sought in one or more Member States, the prospectus shall be drawn up either in a language accepted by the competent authorities of the home and host Member States or in English, at the choice of the issuer, offeror or person asking for admission to trading, as the case may be .
V 1
14.17

The prospectus should be made available to the public as soon as is possible, at least with good notice before the public offering and no later than the opening of the offering or the date of admission to trading. If it is the first admission to trading for the securities, the prospectus should be made available at least six working days before the end of the offering. Publication shall be accomplished in accordance with Article 14(2) of the Prospectus Directive. A prospectus shall be considered to have been made public when it is made available in any of the following ways: (i) publication in one or more daily newspapers with nationwide or extensive circulation; (ii) in a printed form to be made available, free of charge, to the public at the offices of the market on which the securities are being admitted to trading, or at the registered office of the issuer and at the offices of the financial intermediaries placing or selling the securities; (iii) on the website of the offeror or issuer and, if applicable, on the website of the financial intermediaries placing or selling the securities; 211
14.17
(iv) on the website of the regulated market where the admission to trading is sought; (v) on the website of the FME (www.fme.is) . No later than the next working day after the prospectus has been made available, a notice has to be published in one or more newspapers, stating how the prospectus has been made generally available. The (base) prospectus and registration document are valid for a period of twelve months following their publication, provided they are updated when required. The registration document can, of course, only be distributed if it is accompanied by a securities note and summary .
2
14.18
Advertisements
Any type of advertisement relating to an offering of securities to the public or to an admission to trading is subject to specific provisions of Article 9 of Regulation No. 242/2006. However, the provisions only apply in case the issuer, offeror or person requesting admission to trading on a regulated market is obligated to prepare a prospectus. Any advertisement made public by the issuer (or offeror) should comply with the following conditions: (i) the document should state that a prospectus has been or will be published and where it can be obtained; (ii) the information contained in the advertisement should be accurate and not misleading; (iii) the information should be consistent with that contained in the prospectus; and (iv) the advertisement must be clearly recognisable as such. Advertisements can be circulated in any of the ways set forth in the Prospectus Regulation, implemented by Regulation No. 243/2006. If advertisements with material information are made available to qualified investors or special categories of investors, such information must (i) be incorporated in the prospectus or a supplement thereto, if there is an obligation to publish a prospectus; and (ii) be disclosed to all qualified investors or special categories of investors, if the offer is exclusively addressed to this type of investor. Material information is often given to certain investors during road shows .
14.19
VI
14.20

Article 10 of Regulation No. 242/2006 stipulates that the FME is obligated, with advance to Article 14, to acknowledge prospectuses and supplements to prospectuses which have been approved by a competent authority in the European Economic Area (EEA), provided that the notification requirement according to Article 11 is met. Such prospectuses are excluded from any kind of approval process or administration by the FME.
212
Iceland
14.23
In the event a significant factor arises or a material mistake or inaccuracy occurs concerning the information in a prospectus after it has been approved, the FME is authorised to notify the competent authority of the relevant home state that new information is necessary. 14.21. Article 13 of Regulation No. 242/2006 stipulates that if Iceland is the home State of an issuer having its registered office in a country outside the EEA, the FME can approve the prospectus for a public offering or admission to trading of securities, which is drawn up in accordance with the legislation of the relevant State, if the following conditions are met: (i) the prospectus is drawn up in accordance with international standards set by international securities commission organisations, including the IOSCO disclosure standards on publication of information; (ii) the information incorporated in the prospectus, including financial information, is equivalent to the requirements of Chapter VI of the Securities Act and Regulation No. 242/2006. If Iceland is not a home State in a public offering or admission to trading of securities on a regulated market in Iceland and the issuer has a registered office in a country outside the EEA, Articles 10, 11 and 12 of Regulation No. 242/2006 apply .
VII
14.22
Sanctions
The Securities Act contains a list of sanctions that can be imposed by the FME under specific circumstances. This list does fully correspond to that set forth in Article 21(3) and (4) of the Prospectus Directive. In the event of a violation of any provisions of the Securities Act, the FME can impose an administrative fine ranging from ISK10,000 to 20 million for individuals and ISK50,000 to 50 million for legal persons . In addition to administrative fines, violators can also be punished by a prison term of up to six years, if there are no more severe sanctions under other legislation, and/or a criminal fine in specific circumstances enumerated in the Securities Act. The following acts, for example, are subject to criminal sanctions: (i) a public offering of securities is made without a prior publication of a prospectus as required in Article 44(1) of the Securities Act; (ii) the prospectus does not contain all the information stipulated in Article 45 of the Securities Act; (iii) a supplement to the prospectus is not prepared in accordance with Article 46 of the Securities Act .
14.23
213
14.24
VIII
14.24
The prospectus should clearly indicate and identify the persons responsible for it and any supplements, namely the issuer or its corporate bodies, whether they be administrative, managerial or supervisory, the offeror and the person requesting admission on to trading on a regulated market or the guarantor. These persons must be clearly identified in the prospectus. To this end, their name and function or, in the case of legal entities, their name and the address of their registered office must be mentioned. Furthermore, the prospectus must contain a statement by such persons that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus contains no omissions likely to affect its import . The issuer or its corporate bodies, the offeror, the person requesting admission or the guarantor, named as responsible parties in the prospectus, are, notwithstanding any provisions to the contrary, jointly liable for any damage caused by any misleading or incorrect information in the prospectus and its supplements, or the omission of information required by the Securities Act, the Prospectus Directive or the implementing legislation. Even though it can be proved that information in the prospectus was misleading or incorrect and there is a connection between that and changes in the purchase price of the securities, it is not certain that the investor will get compensation. The investor first has to prove his loss. Liability shall be divided internally in accordance with the common rules of tort law . In Iceland the board of directors, including board members, are considered to be mainly liable for the prospectus to be correct. They will, therefore, likely bear the ultimate liability alone or with others. It can be assumed that the company itself would be judged to pay the claims and it would than have a recovery claim towards the board members for at least a part of the compensation on the ground that they have not fulfilled their duties. It would be considered normal that they would bear the liability rather than the shareholders. If the reason for the incorrect information can be traced to a certain party, e.g., the accountant or the manager, the main liability would fall on that party. However if the board members should have been able to see the error they would also be liable . Liability cannot be incurred solely on the basis of a summary of the prospectus or a translation thereof, unless the summary contains misleading, inaccurate or inconsistent information in relation to the prospectus .
IX
14.25
Conclusion
The Icelandic legislature has fully implemented the provisions of the Prospectus Directive and the Prospectus Regulation into national law.
214
15 Liechtenstein
A n dr e a s S c h u rt i a n d A l ex a n de r A p pe l 1 Walch & Schurti
Introduction 215 1 Identification of the implementing laws and legal framework 215 2 Brief legislative history 216 II Competent authority 216 III Procedure of prior approval and appeal 217 1 Public offer 217 2 Admission to trading 218 3 Exemptions 219 4 Appeal 220 IV Content and format, language and supplements of the prospectus 220 1 Content 220 2 Format 221 3 Supplement 222 4 Language 222 V Publication and advertisements 224 1 Method of publication 224 2 Advertisements 225 VI Use of prospectus approved in other countries 225 1 Use of a prospectus approved in other EEA-contracting parties 225 2 Use of a prospectus approved in non-EEA countries 225 VII Sanctions 226 1 Judicial offences 226 2 Administrative offences 227 VIII Prospectus liability 227 IX Rules applicable to transactions and securities not subject to the Securities Prospectus Act and the Prospectus Regulation 228 X Conclusion 228
I 1
15.1
Introduction Identification of the implementing laws and legal framework

The Principality of Liechtenstein is not a member of the European Union (EU). However, being a party to the Treaty relating to the European Economic Area (EEA), Liechtenstein is obliged to implement the Prospectus Directive. 215
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Like the other parties of the EEA, the Principality of Liechtenstein is not only obliged to implement the Prospectus Directive; it is also bound to the Prospectus Regulation which is directly applicable in the Principality of Liechtenstein. 15.2 In Liechtenstein, the implementation of the Prospectus Directive took place by way of a complete revision of the former Liechtenstein Prospektgesetz (Prospectus Act). The Prospectus Act was not only comprehensively revised with regard to its format but also with regard to its content. Moreover, due to its reinforced function to regulate the domestic securities market its name was changed to Wertpapierprospektgesetz (Securities Prospectus Act, SPA). In order to remind those applying the Securities Prospectus Act of the immediate applicability of the Prospectus Regulation, Article 9 of the Securities Prospectus Act mentions that, with regard to the minimum requirements for the content of a prospectus, the Prospectus Regulation has to be applied. Liechtenstein availed itself of the German corresponding legislation as a model for the implementation of the Prospectus Directive.2 Besides the complete revision of the former Prospectus Act, the implementation of the Prospectus Directive was achieved by amending the Liechtenstein Investmentunternehmengesetz (Act on Mutual Funds).3
2
15.3
Brief legislative history

The Government of the Principality of Liechtenstein approved the internal report as well as the draft version of the new implementing legislative by decision of 11 July 2006. Subsequently, the draft was forwarded to different departments, authorities, as well as associations in order to offer them the opportunity to comment on the report and the draft version. Comments were submitted by a great number of bodies such as the Federation of the Liechtenstein Banks, the Federation of the Liechtenstein Insurance Companies, the EEA-Unit, the Financial Intelligence Unit, the Department for National Economy, the Department for Foreign Affairs, the Liechtenstein Chamber of Industry and Commerce and others. Some of these contributors also proposed amendments for the draft version of the Securities Prospectus Act. However, all of them agreed to the necessity of a harmonisation of the European laws with regard to the publication of prospectuses.4 The draft version for the Securities Prospectus Act as well as the underlying report and the different statements and amendment proposals were discussed in the Liechtenstein Parliament in two separate readings. Finally, the amended Securities Prospectus Act was approved by the Liechtenstein Parliament in the second reading on 23 May 2007. The Liechtenstein Securities Prospectus Act5 then entered into force on 1 September 2007.
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15.4 216
Competent authority
In the Principality of Liechtenstein the Finanzmarktaufsicht (Financial Market Surveillance Authority, FMA) has to supervise the application
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of the Securities Prospectus Act (Arts. 15 and 29 et seq. SPA). This is an independent, but nevertheless integrated, authority for the surveillance of the Liechtenstein financial market. Its main tasks are to ensure the stability of the financial market of the Principality of Liechtenstein, the protection of clients in the financial sector, the avoidance of abuse of the financial market and the implementation of and compliance with international standards to be applied on the financial market.6 The FMA is independent from the Government, but obliged to render an account to the Liechtenstein Parliament.7 15.5 The FMA has special powers (Art. 29 SPA). However, although it shall collaborate with other authorities, the FMA is not allowed to delegate these powers to other authorities or to governmental departments of the Principality of Liechtenstein.8 Special powers are, for example, the right to receive information from issuers, offerors or other persons applying for the admission to trade securities, the right to request further information to be included in the prospectus and, if the suspicion of an offence against the Securities Prospectus Act arises, the right to order the temporary suspension of a public offer, the temporary suspension of its advertising or even the temporary suspension of trade with the offered securities. Furthermore, the FMA may inform the public in the official gazettes that an issuer does not comply with the regulations of the Securities Prospectus Act and therefore is not allowed to offer securities. Finally, the FMA is allowed to take every measure that is appropriate to achieve compliance with the Securities Prospectus Act. In case such measures have to be taken outside the territory of the Principality of Liechtenstein, the FMA, in order to achieve them, has to coordinate with the respective party to the EEA.9 The FMA is also the competent authority in case of administrative offences (e.g., if in violation of the Securities Act no prospectus is published) (Art. 43 et seq. SPA). It is allowed to impose administrative fines in the amount of up to CHF100,000. Besides the FMA, the Princely District Court is the competent authority for violations of the criminal provisions of the Securities Prospectus Act.10
15.6
III 1
15.7
Procedure of prior approval and appeal Public offer

The Liechtenstein Securities Prospectus Act has to be applied on all public offers for securities as well as the admittance for trade of such securities on a regulated market in one of the states of the EEA. The term public offer is defined in the Securities Prospectus Act as information of the public irrespective of the format or means of such information, however offering sufficient information with regard to the conditions of an offer and the offered securities in order to provide an investor with the necessary information to decide 217
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whether or not to subscribe to or buy the offered securities (Art. 3, al. 1(d) SPA). For such a public offer a prospectus has to be published and approved beforehand (Art. 4 SPA). Different from the previous Prospectus Act all (not only the first) offers have to follow a published prospectus. If the same securities are offered for sale again after some time, such later offer again qualifies as a separate offer and requires the publication of a prospectus.11 However, one must distinguish between such subsequent offers and the offering on different markets of the EEA. It is the achievement of the implementation of the Prospectus Directive that only for the offering on the first market in the EEA a prospectus has to be released (Art. 6 litt. 2(g) SPA). With the approval of the prospectus and the admittance for trade of the offered securities in one regulated EEA-market, no further prospectus has to be published for the trading of these securities on other markets in the EEA (European passport). Therefore, subject to special conditions of the Securities Prospectus Act, for securities already having been admitted to another regulated EEA-market no further prospectus has to be published if a public offer shall subsequently be made in Liechtenstein.
2
15.8
Admission to trading
If an offer is subject to the Securities Prospectus Act, each prospectus has to be approved by the FMA prior to its publication (Art. 15 al. 1 SPA). Pursuant to the previous Prospectus Act, such an approval for a prospectus was only given if the prospectus contained all legally required information and, moreover, if such information given was correct. Pursuant to the Securities Prospectus Act, the FMA is obliged to examine the completeness of the information contained in the prospectus. However, no guarantee has to be given with regard to the correctness of the information in the prospectus.12 Therefore, the FMAs approval of a prospectus is no guarantee for the issuer that he will not be made liable by investors for false information contained in the prospectus at a later stage. The decision with regard to approval or disapproval by the FMA is subject to a term of ten working days starting with the date on which the FMA receives the prospectus (Art. 15 al. 2 SPA). The term is prolonged to twenty working days if this offer is the first public offer of the respective issuer and if the securities of this offer have not already been admitted for trading on another regulated EEA-market (Art. 15 al. 3 SPA). However, if the FMA does not decide within these time periods, this may not be interpreted as an approval of the prospectus. In such a case the FMA has the obligation to immediately inform the issuer of the delay (Art. 15 al. 4 SPA). Should the information contained in the prospectus or the application for approval be incomplete, the FMA is also obliged to inform the issuer within ten working days. The term for approval then starts with the date on which the FMA receives the lacking information (Art. 15 al. 5 SPA).
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The FMA is entitled to request the issuer to send all documents relating to the approval of a prospectus in electronic format (Art. 15 al. 6 SPA). This should help not only to accelerate the processing at the FMA but also to enhance the collaboration with other authorities in the EEA. 15.9 The FMA may delegate the decision of approval or disapproval to the competent authority of another EEA-contracting state if the respective authority agrees to such delegation. The issuer, offeror or person applying for approval of the prospectus has to be informed of such delegation within three working days starting with the FMAs decision to delegate the approval (Art. 16 al. 1 SPA). Such delegation will be practical if securities shall only be traded on the regulated market of another EEA-contracting state.13 Further, the FMA can agree to take over the decision for approval or disapproval from the competent authority of another EEA-contracting state if requested to do so by such other authority. The time frame for the FMAs approval or disapproval then starts with the foreign authoritys decision to delegate the approval to the FMA (Art. 16 al. SPA). After approval, the prospectus has to be deposited with the FMA (Art. 17 al. 1 SPA). Moreover, the complete prospectus has to be published without delay. Such publication must normally be accomplished at the latest one working day prior to the commencing of the public offer (Art. 17, al. 1 SPA).
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3
15.11
Exemptions
With regard to the exemptions from the statutory obligation to publish a prospectus, the Securities Prospectus Act provides for more exceptions of its applicability than its predecessor, the Prospectus Act (Arts. 5 and 6 SPA). However, subject to certain conditions for issuers of exempt securities, it is possible to opt in for the applicability of the Securities Prospectus Act in order to benefit from the advantages with regard to the European passport.14 Amongst the statutory exceptions, offers addressed exclusively to qualified investors (as defined in Art. 3 al.1 lit.g of the Securities Prospectus Act), as well as addressed to less than 100 non-qualified investors in each contracting State, are exempt from the statutory obligation to draft and submit a prospectus (Art. 5 al. 1(a) and (b) SPA). This can also be understood as an exemption for offers which are addressed to less than 100 non-qualified investors in each contracting State and to some qualified investors. Offers in connection with special situations (e.g., the merger of two companies or the offer of shares of a company solely to its employees) are exempt from the obligation to publish a prospectus. This exemption is based on the fact that these investors have no need for a prospectus as they have or have had other opportunities to gather detailed information with regard to the securities.15 219
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Other exemptions include, inter alia, offers in which the total value of the issuance does not exceed 100,000, as well as various exemptions by virtue of the type of the respective securities.
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15.12
Appeal
Decisions of the FMA may be challenged by way of appeal to the FMABeschwerdekommission (FMA Appeal Commission). Decisions of the FMA Appeal Commission may be challenged by way of appeal to the Liechtenstein Administrative Court (Verwaltungsgerichtshof). All appeals to the FMA Appeal Commission or to the Liechtenstein Administrative Court have to be filed within fourteen days from the date of service of the respective decision (Art. 45 SPA).
IV 1
15.13

Pursuant to the Securities Prospectus Act the prospectus has to contain all information necessary for an investor to profoundly assess the assets, the financial situation, the operating results and the future development of the issuer as well as of every guarantor involved. The prospectus further has to provide the investor with sufficient information with regard to the rights related to the possession of the securities offered (Art. 8, al. 1 SPA). Therefore, the prospectus must contain all necessary information with regard to the issuer and the offered securities. However, no further specifications with regard to the content of a prospectus are provided in the Securities Prospectus Act. This is due to the fact that the Prospectus Regulation, which provides for the detailed minimum requirements for the content of a prospectus, is directly applicable in Liechtenstein. Therefore, with regard to the mandatory content of a prospectus the Securities Prospectus Act expressly refers to the Prospectus Regulation (Art. 9 SPA). Irrespective of the direct applicability of the Prospectus Regulation and the requirements for its content, the FMA has the power to release the offeror from publishing certain pieces of information if the FMA considers them not to be important or necessary. The publication of information may be seen as unnecessary or not important if, e.g., on the one hand these pieces of information are not required for the investor to assess the securities offered but on the other hand the publication of this information contravenes the public interest or causes severe damage to the issuer (Art. 14 al. 3 SPA). If the issuing price and the total amount of securities issued cannot be indicated in the prospectus, either the main criteria or conditions for the calculation of the values have to be stated (Art. 14, al. 2 and Art. 17 al. 3(a) SPA). By way of deviation the maximum rate can be indicated in relation to
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the issuance price. The maximum issuing price should always be indicated as it gives the investors comfort that the price will not be higher than a certain amount.16 Alternatively, one must inform the investor in the prospectus that he is entitled to rescind his order or commitment to acquire securities within two working days upon the day when the final price of issuance (as well as the total number of securities issued) is lodged with the FMA (Art. 14 al. 1(b) SPA). The final price of issuance as well as the total number of securities issued must be lodged with the FMA and published like a prospectus (Art. 14, al. 2 and Art. 17 al. 3 SPA). 15.14 The Prospectus has to include a summary that summarises the most important facts and risks with regard to the issuer, the guarantors and the securities in a comprehensible manner (Art. 8, al. 2 SPA). No such summary has to be made if the securities offered are not dividend bearing securities or the like with a nominal value of at least 50,000 (or an equivalent value) (Art. 8, al. 3 SPA). The summary has to contain specific warnings: first of all, the warning that the summary is only a rsum and, as such, does not contain all relevant information and that the investor, therefore, shall read the entire prospectus before taking his investment decision (Art. 8 al. 2(a) and (b) SPA). A further warning shall be given with regard to the costs of the translation of the prospectus in the sense that, depending on the applicable regulations of the respective EEA-contracting State, an investor filing a claim against the offeror based on misinformation in a prospectus might be bound to bear the costs for the translation of the prospectus prior to the court proceeding (Art. 8 al. 2(c) SPA). Furthermore, the investor has to be made aware of the fact that the persons in charge of the prospectuss summary and its translation may only be made responsible for misinformation if the information contained in the summary is misleading, wrong or contradictory when read jointly with the information in the entire prospectus (Art. 8 al. 2(d) SPA). In the prospectus the name and function of the person(s) who is/are responsible for the content of the prospectus have to be indicated. In case the responsible person is a legal entity its firm name and its registered office have to be stated. Besides these indications a declaration of the respective responsible person(s) has (have) to be included in the prospectus in which they confirm that the information stated in the prospectus is correct and complete and that no material information is missing (Art. 8 al. 4 SPA). Finally, the prospectus has to be signed by the offeror and the date of issuance has to be indicated (Art. 8 al. 5 SPA).
15.15
2
15.16
Format
The format of the prospectus shall be comprehensible and shall make the prospectus easy to be analysed (Art. 7 al. 1 SPA). The prospectus may be written in one or several documents: if written in only one document, this single 221
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document must contain a summary as well as information with regard to the issuer and the securities offered (Art. 7 al. 3 SPA). If the prospectus consists of several documents, one of these documents has to contain the summary, one the information with regard to the issuer and one the description of the securities offered (Art. 7 al. 4 SPA). The choice whether a prospectus is structured in one or several documents has no impact on the scope of content of the prospectus. In any event, the content must be the one required by statutory law. The possibility to have the prospectus made up of several documents shall only accelerate and facilitate the offering in particular for issuers who are admitted to a market and who frequently raise capital on this market.17 However, the possibility to structure a prospectus in different documents does not exist for a basic prospectus which, as such, always has to consist of one single document (Art. 7 al. 5 SPA). In accordance with Article 13 of the Securities Prospectus Act, the prospectus can refer to previously and simultaneously published documents which have been approved by or deposited with the FMA or any competent regulator in another EEA Member State.
3
15.17
Supplement
Each important new circumstance or each material incorrectness or impreciseness in relation to the information contained in the prospectus which could influence the assessment of the securities and which occur or are ascertained between the approval of the prospectus and the definite close of the public offer or the entry into trading have to be set out in a supplement to the prospectus. This supplement has to be approved by the FMA (Art. 19 al. 1 SPA). The approval has to be given within seven working days (Art. 19 al. 2 SPA). However, if the FMA takes the view that the information contained in the supplement is incomplete, the statutory seven-day term does not commence before the FMA has received all the requested information.18 After approval the supplement has to be published in the same way as the initial prospectus. As a consequence, the potential investors also have to be informed via official gazettes about the publication of the supplement (Art. 17 al. 4 SPA). Furthermore, the summary of the prospectus and its translations have to be corrected accordingly (Art. 19 al. 3 SPA). This shall enable the investor to get to know the amendments of the prospectus.19 However, there is even more protection for the investors: investors who ordered securities before the publication of the supplement are entitled to cancel their order within two working days if this order was not fulfilled before. This special right of withdrawal has to be emphasised in the supplement (Art. 19 al. 4 SPA).
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15.18 222
Language
Article 10 of the Securities Prospectus Act contains the rules with regard to the language of the prospectus. In a nutshell, pursuant to these regulations
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the prospectus may either be drafted in German or in a language customary in the field of international finance. However, a summary in the German language always has to be included (Art. 10 SPA). In contrast to neighbouring Switzerland, German is the (only) official language in Liechtenstein. 15.19 To explain the Regulations in more detail, Article 10 of the Securities Prospectus Act provides for the use of different languages depending on the respective EEA Member State in which the securities described in the prospectus shall be offered and depending on the so called home-contracting party. The term home-contracting party is defined in Article 3 al. 1(a) of the Securities Prospectus Act and basically is the State in which the issuer has its registered office. However, with regard to special types of non-dividend bearing securities the home-Member State is, subject to the choice of the issuer, the offeror or the person requesting the admittance to the market: they may choose as home-contracting party the EEA Member State where the issuer has its registered office, the EEA Member State market to which the securities shall be admitted or the EEA Member State where the securities shall be publicly offered (Art. 3 al 1(n) SPA). If Liechtenstein is the home Member State and, moreover, the public offer for the securities is only be made in Liechtenstein, the prospectus has to be prepared in German. The FMA may allow another language as long as there is a summary in German and the FMA is of the opinion that the investors are guaranteed to receive sufficient information with regard to the securities (Art. 10 al. SPA). If Liechtenstein is the home Member State but if the securities are be offered in other EEA-contracting parties only, the prospectus has to be made in a language accepted by the host Member State (i.e., the EEA-contracting party in which an offer to the public is made or admission to trading is sought, if different from the home contracting party (Art. 3, al. 1(o) SPA) or a language customary in the field of international finance. Moreover, if the language accepted by the host contracting party is not German, there has to be a German version of the prospectus or a version in a language accepted by the Liechtenstein FMA together with a summary in German (Art. 10 al. SPA). If Liechtenstein is the home contracting party and the securities are to be offered in Liechtenstein as well as at least in one other EEA-contracting party, the prospectus has to be in German or in another language accepted by the FMA with a summary in German or the prospectus has to be in a language customary in the field of international finance with a summary in German (Art. 10 al. 3 SPA). In case Liechtenstein is the home contracting party and the prospectus is not in German, the prospectus must contain a summary in German (Art. 10 al. 4 SPA). Article 10 of the Securities Prospectus Act contains a separate regulation for a prospectus with regard to special non-equity securities: if Liechtenstein is 223
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the home-contracting party and the non-equity securities shall be admitted on the regulated markets of one or several other EEA-contracting parties, the prospectus may be in German or another language accepted by the FMA with a summary in German or in a language customary in the field of international finance (with a summary in German) (Art. 10 al. 5 SPA).
V 1
15.21

The complete prospectus has to be published without delay in one of the following forms (Art. 17, al. 3 SPA): (i) it may be published in one or several economic magazines or newspapers which are broadly available or admitted as an official public gazette in the EEA-contracting party in which the public offer shall be submitted; (ii) furthermore, the publication may be carried out by and having the prospectus printed and distributed for free by the issuer, by the financial intermediaries that are placing or selling the securities or by the competent authorities of the regulated market for which the securities shall be admitted; (iii) the publication condition may also be fulfilled by publishing the prospectus on the internet site of the issuer, the internet site of the financial intermediaries that are selling the securities or the internet site of the regulated market for which the securities shall be admitted. The possible investors have to be informed via the official gazettes where they can locate the published prospectus (Art. 17 al. 4 SPA). If the prospectus is published in electronic format only, the offeror, the issuer, the person applying for the admittance for trade or the financial intermediary placing the securities has to provide the investor with a hard copy version of the prospectus if the investor so requests (Art. 17, al. 6 SPA). The prospectus has to be published at the latest one working day before the advertised offer commences (Art. 17 al. 1 SPA). The FMA must be informed about the exact date and the way of publication at the latest on the day on which the prospectus is published (Art. 17 al. 4 SPA). Furthermore, if this type of security has not previously been admitted for trade either on the national market or on another regulated market, the offer has to stay valid for a period of at least six working days starting with the day that follows the publication of the prospectus.20
15.22
The FMA itself publishes a list of all prospectuses approved in the previous year on its website with free access for all interested persons (Art. 17 al. 7 SPA).
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2
15.23
Advertisements
Pursuant to Article 21 of the Securities Prospectus Act it has to be differentiated whether or not the publishing of a prospectus is mandatory pursuant to the law. In case there is a statutory obligation to publish a prospectus pursuant to the Securities Prospectus Act, any kind of advertising with regard to a public offer or the admittance to trade on a regulated market has to emphasise that a prospectus has been or will be published and where this prospectus is available (Art. 21 al. 1(a1) SPA). Moreover, the advertisement must clearly be recognisable as such. It must not contain information which is incorrect, misleading or contradictory to the information contained in the prospectus (Art. 21 al. 1(a) SPA). All other information that is not intended to be used as advertising and is spread in written or oral form must correspond to the information of the prospectus (Art. 21 al. 1(b) SPA). If the publishing of a prospectus is not mandatory pursuant to the Securities Prospectus Act, all relevant information with regard to the issuer or the offeror that was given to special groups of investors or qualified investors must also be given to all other qualified investors or special groups of investors to whom the offer is addressed. This obligation also refers to information given at special events (Art. 21 al. 2 SPA). However, it goes without saying that the Liechtenstein authorities are entitled to control the advertising on Liechtenstein territory only.21 With regard to advertisements not only the provisions of the Securities Prospectus Act but also to the Prospectus Regulation have to be borne in mind.
VI 1
15.24
Use of prospectus approved in other countries Use of a prospectus approved in other EEA-contracting parties
A prospectus approved by the competent authority of another EEA-contracting party may also be used for a public offer in Liechtenstein subject to the following conditions.22 The competent authority must notify the Liechtenstein FMA of the approved prospectus by transmitting a confirmation of the approval of the respective prospectus as well as a copy of the prospectus itself.23 Furthermore, if the prospectus is not written in German it must contain a summary in German.24
2
15.25
Use of a prospectus approved in non-EEA countries

A prospectus issued by an issuer having its registered seat in a non-EEAcontracting party may be approved by the Liechtenstein FMA for a public offer 225
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in an EEA-contracting party or the admittance to the regulated market in an EEA-contracting party if the following conditions are complied with: (i) the prospectus must have been drafted in accordance with the international standards of the international organisations of the respective supervising authorities including the disclosure standards of the International Organisation of Securities Commissions (IOSCO); and (ii) moreover, the prospectus may only be approved if the information requirements (also with regard to financial information) for the information contained in the foreign prospectus are equal to those provided for in the Liechtenstein Securities Prospectus Act (Art. 25 al. 1 SPA). Furthermore, the Regulations of the Securities Prospectus Act with regard to notification requirements (Art. 23 SPA), the passporting system (Art. 22 SPA) as well as language requirements (Art. 10 SPA) have to be complied with (Art. 25 al. 2 SPA). If these conditions are met and the Liechtenstein FMA approves the prospectus the Liechtenstein FMA will be seen as competent authority of the home contracting party (Art. 25 al. 1 SPA).
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15.26
Sanctions
The Securities Prospectus Act provides for two categories of sanctions: administrative offences and judicial offences. Sanctions for judicial offences have to be imposed by the Princely District Court (Frstliches Landgericht), whereas the sanctions for administrative offences will be imposed by the FMA as competent authority (Art. 42 et seq. SPA).
1
15.27
Judicial offences
It is regarded as a judicial offence if, with regard to a public offer, the publication of a prospectus is mandatory and the pieces of information contained in the prospectus being relevant for the decision to acquire the offered securities are false. It is also seen as a judicial offence if disadvantageous information is not published in the prospectus but withheld from the possible buyers. Such forms of deliberate misinformation may be punished not only with a fine in the amount of a certain percentage of up to one years salary of the offender but also with custodial sentences of up to one years imprisonment (Art. 42 al. 1 SPA). Moreover, the deliberate unauthorised use or revelation of personal data or facts and of most business secrets will qualify as a judicial offence. For such an offence, fines in the amount of a certain percentage of up to one years salary or custodial sentences of up to half a years imprisonment may be levied (Art. 42 al. 2 SPA).
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In case these offences are committed negligently half of the fines or custodial sentences may be imposed (Art. 42 al. 3 SPA).
2
15.28
Administrative offences
The FMA is entitled to impose fines of up to Swiss Francs 100,000 if pursuant to the Securities Prospectus Act a prospectus approved by the FMA has to be published and this prospectus was deliberately published prior to the FMAs approval (Art. 43 al. SPA). Furthermore, such fine may be imposed if the FMA was deliberately not informed, if the FMA was not informed on time or if the FMA was informed incorrectly about the price of the issue or the volume of the issue. The same will be applied if the price of the issue, the volume of the issue or the prospectus itself, the notification in the gazettes or the supplement to the prospectus have deliberately not been timely published, have not been timely published at all or have been published incorrectly (Art. 43 al. 1 SPA). Furthermore, a fine of up to Swiss Francs 100,000 may be levied if an issuer does not comply with the obligation of Article 20 of the Securities Prospectus Act. This provision obliges all issuers to inform their investors annually of all the information published with regard to the offered securities due to the surveillance regulations of one of their markets (Art. 20 SPA). A fine of the same amount may be imposed if in violation of Article 17 al. 6 of the Securities Prospectus Act no hard copy version of the prospectus is made available to the investors. Finally, such fine may be imposed if the summons of the FMA to comply with the regulations of the Securities Prospectus Act is not obeyed (Art. 43 al. 1(e) SPA). If these administrative offences have not been committed deliberately but only negligently only half of the amount as stated above may be levied as fine (Art. 43 al. 2 SPA).
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On the one hand the Securities Prospectus Act contains regulations with regard to the fines as described above. These fines may be imposed on the respective offenders in case of the described judicial or administrative offences. On the other hand, pursuant to the Securities Prospectus Act in each prospectus the name and function of the person(s) responsible for the content of the prospectus have to be mentioned. If the responsible person is a legal entity, its firm name and its registered office have to be stated (Art. 8 al. 4 SPA). These persons can be made liable for all damages incurred by the investors if in contradiction to the provisions of the Securities Prospectus Act no prospectus has been published at all or the information contained in the prospectus was false or incomplete. However, these persons may not be made liable if they prove not to be responsible for the damage caused (Art. 38 al. 1 SPA).
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The persons referred to as responsible for the content of the prospectus can also be made liable for the damages of the investors caused by the assistants or agents of these persons. Also these persons can prevent this liability by proving that they exercised due diligence with regard to the choice, instructions and surveillance of their assistants or agents (Art. 38 al. 2 SPA). The liability extends to the summary of the prospectus and its translations in case these are false, misleading or contradictory (Art. 38 al. 4 SPA). Finally, the liability as explained above may not be restricted or excluded in advance if this would result in a disadvantage to the investor (Art. 38 al. 3 SPA). 15.30 The Liechtenstein Persons and Companies Act (Personen-und Gesellschaftsrecht, PGR) also provides for provisions which deal with the liability for damages resulting from false information in a prospectus or an offering memorandum. In accordance with Article 219 al.1 Z.1 PGR, a person who is active within the framework of the formation or incorporation of a legal entity is liable for damages which result from any false informtion such person has made or distributed in a prospectus or an offering memorandum. This also applies accordingly in relation to damages if such legal entities issue securities at a later stage (Art. 219 al.3 PGR). Provided that the respective prerequisites are fulfilled, not only the creditors of a legal entity but also the shareholders and the entity itself, as the case may be, can be attributed such claim for damages against the responsible persons.
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15.31
Rules applicable to transactions and securities not subject to the Securities Prospectus Act and the Prospectus Regulation
In case a transaction or securities are not subject to the Securities Prospectus Act and the Prospectus Regulation and even if the a transaction or securities are subject to these regulations it has to be borne in mind that the Act on Mutual Funds25 could be applicable for these transactions or securities. A mutual fund is defined as capital collected via public advertising for the purpose of investing it collectively and on the joint account of the investors. Should this Act on Mutual Funds be applicable, several conditions with regard to the managing corporation of such a mutual fund, with regard to the mandatory prospectus, but also with regard to mandatory periodical reports have to be observed. Besides this Act on Mutual Funds, the Act for the Protection of Consumers26 or the Act Against Unfair Trade may be applicable.27
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Conclusion
The Liechtenstein implementation of the Prospectus Directive, the new Securities Prospectus Act, offers issuers a variety of new possibilities. Especially for smaller countries without a regulated market the passporting system is of importance. Via the passporting system the approval for trade
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is valid in the entire EEA and, therefore, possibly also in countries with a regulated market. This upgrades the approval of countries without a regulated market and makes them more attractive as their approval also constitutes an entry to the regulated markets of the EEA. The harmonisation of the laws of all contracting parties of the EEA with regard to public offers of securities will facilitate such offer in the different countries of the EEA. This should promote the trade of securities and enhance such trade via Liechtenstein.
Notes
1. We thank our colleague Dr Christian Presoly for his assistance in drafting this chapter. 2. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 8 et seq. 3. See footnote 26 below. 4. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 20 et seq. 5. Wertpapierprospektgesetz (WPPG) of 23 May 2007, LGBl. 2007/Nr. 196. 6. Art. 4 of the Act with regard to the FMA of 18 June 2004. 7. Art. 32 of the Act with regard to the FMA of 18 June 2004. 8. Art. 29 of the Securities Prospectus Act; Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 64. 9. Loc. cit. 10. Art. 31 and 42 of the Securities Prospectus Act; see no. 26 et seq. of this chapter. 11. Art. 5 al. 2 of the Securites Prospectus Act; Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 10. 12. Art. 15 of the Securities Prospectus Act; Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 48. 13. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 50. 14. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 10; Art. 2 al. 3 Securities Prospectus Act. 15. Art. 6 of the Securities Prospectus Act; Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 11. 16. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 46. 17. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 38. 18. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 55. 19. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 56.
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20. Art. 17 al. 1 of the Securities Prospectus Act; Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 52. 21. Governmental Report on the Securities Prospectus Act for the Liechtenstein Parliament, p. 57. 22. Art. 22 al. 3 of the Securities Prospectus Act in connection with Art. 23 of the Securities Prospectus Act and Art. 10 al. 4 of the Securities Prospectus Act. 23. Art. 22 al. 3 of the Securities Prospectus Act in connection with Art. 23 of the Securities Prospectus Act. 24. Art. 22 al. 3 of the Securities Prospectus Act in connection with Art. 10 al. 4 of the Securities Prospectus Act. 25. Gesetz vom 19 May 2005 ber Investmentunternehmen (IUG), Liechtensteinisches Landesgesetzblatt Nr. 2005/156. 26. Gesetz vom 23 October 2002 zum Schutz der Konsumenten (Konsumentenschutzgesetz, KSchG), Liechtensteinisches Landesgesetzblatt 2002/164. 27. Gesetz vom 22 October 1992 gegen den unlauteren Wettbewerb (UWG), Liechtensteinisches Landesgesetzblatt 1992/121.
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Annex I
Council Directive (EC) No. 2003/71 of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (the Prospectus Directive)
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DIRECTIVE 2003/71/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC
(Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Articles 44 and 95 thereof, Having regard to the proposal from the Commission (1), Having regard to the opinion of the European Economic and Social Committee (2), Having regard to the opinion of the European Central Bank (3), Acting in accordance with the procedure laid down in Article 251 of the Treaty (4), Whereas:
(1) (5)
capital action plan and Implementing the framework for financial market: Action Plan facilitating the widest possible access to investment capital on a Communitywide basis, including for small and medium-sized enterprises (SMEs) and start-ups, by granting a single passport to the issuer.
Council Directives 80/390/EEC of 17 March 1980 coordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing (5) and 89/298/EEC of 17 April 1989 coordinating the requirements for the drawing up, scrutiny and distribution of the prospectus to be published when transferable securities are offered to the public (6) were adopted several years ago introducing a partial and complex mutual recognition mechanism which is unable to achieve the objective of the single passport provided for by this Directive. Those directives should be upgraded, updated and grouped together into a single text. Meanwhile, Directive 80/390/EEC was integrated into Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (7), which codifies several directives in the field of listed securities. For reasons of consistency, however, it is appropriate to regroup the provisions of Directive 2001/34/EC which stem from Directive 80/390/EEC together with Directive 89/298/EEC and to amend Directive 2001/34/EC accordingly. This Directive constitutes an instrument essential to the achievement of the internal market as set out in timetable form in the Commission communications Risk
On 17 July 2000, the Council set up the Committee of Wise Men on the regulation of European securities markets. In its initial report of 9 November 2000 the Committee stresses the lack of an agreed definition of public offer of securities, with the result that the same operation is regarded as a private placement in some Member States and not in others; the current system discourages firms from raising capital on a Communitywide basis and therefore from having real access to a large, liquid and integrated financial market.
(6)
(2)
In its final report of 15 February 2001 the Committee of Wise Men proposed the introduction of new legislative techniques based on a four-level approach, namely framework principles, implementing measures, cooperation and enforcement. Level 1, the directive, should confine itself to broad, general framework principles, while Level 2 should contain technical implementing measures to be adopted by the Commission with the assistance of a committee.
(3)
(7)
(4)
The Stockholm European Council of 23 and 24 March 2001 endorsed the final report of the Committee of Wise Men and the proposed four-level approach to make the regulatory process for Community securities legislation more efficient and transparent.
OJ C 240 E, 28.8.2001, p. 272 and OJ C 20 E, 28.1.2003, p. 122. OJ C 80, 3.4.2002, p. 52. OJ C 344, 6.12.2001, p. 4. Opinion of the European Parliament of 14 March 2002 (OJ C 47 E, 27.2.2003, p. 417), Council Common Position of 24 March 2003 (OJ C 125 E, 27.5.2003, p. 21) and Position of the European Parliament of 2 July 2003 (not yet published in the Official Journal). Decision of the Council of 15 July 2003. (5) OJ L 100, 17.4.1980, p. 1. Directive as last amended by Directive of the European Parliament and of the Council 94/18/EC (OJ L 135, 31.5.1994, p. 1). (6) OJ L 124, 5.5.1989, p. 8. (7) OJ L 184, 6.7.2001, p. 1.
(1) (2) (3) (4)
(8)
The resolution of the European Parliament of 5 February 2002 on the implementation of financial services legislation also endorsed the Committee of Wise Men's final report, on the basis of the solemn declaration made before Parliament the same day by the Commission and the letter of 2 October 2001 addressed by the Internal Market Commissioner to the chairman of Parliament's Committee on Economic and Monetary Affairs with regard to the safeguards for the European Parliament's role in this process.
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According to the Stockholm European Council, Level 2 implementing measures should be used more frequently to ensure that technical provisions can be kept up to date with market and supervisory developments and deadlines should be set for all stages of Level 2.
product under the same programme, and may have different features notably in terms of seniority, types of underlying, or the basis on which to determine the redemption amount or coupon payment.
(14) (10)
The aim of this Directive and its implementing measures is to ensure investor protection and market efficiency, in accordance with high regulatory standards adopted in the relevant international fora.
The grant to the issuer of a single passport, valid throughout the Community, and the application of the country of origin principle require the identification of the home Member State as the one best placed to regulate the issuer for the purposes of this Directive.
(11)
Non-equity securities issued by a Member State or by one of a Member State's regional or local authorities, by public international bodies of which one or more Member States are members, by the European Central Bank or by the central banks of the Member States are not covered by this Directive and thus remain unaffected by this Directive; the abovementioned issuers of such securities may, however, if they so choose, draw up a prospectus in accordance with this Directive.
(15)
The disclosure requirements of the present Directive do not prevent a Member State or a competent authority or an exchange through its rule book to impose other particular requirements in the context of admission to trading of securities on a regulated market (notably regarding corporate governance). Such requirements may not directly or indirectly restrict the drawing up, the content and the dissemination of a prospectus approved by a competent authority.
(16) (12)
Full coverage of equity and non-equity securities offered to the public or admitted to trading on regulated markets as defined by Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (1), and not only securities which have been admitted to the official lists of stock exchanges, is also needed to ensure investor protection. The wide definition of securities in this Directive, which includes warrants and covered warrants and certificates, is only valid for this Directive and consequently in no way affects the various definitions of financial instruments used in national legislation for other purposes, such as taxation. Some of the securities defined in this Directive entitle the holder to acquire transferable securities or to receive a cash amount through a cash settlement determined by reference to other instruments, notably transferable securities, currencies, interest rates or yields, commodities or other indices or measures. Depositary receipts and convertible notes, e.g. securities convertible at the option of the investor, fall within the definition of non-equity securities set out in this Directive.
One of the objectives of this Directive is to protect investors. It is therefore appropriate to take account of the different requirements for protection of the various categories of investors and their level of expertise. Disclosure provided by the prospectus is not required for offers limited to qualified investors. In contrast, any resale to the public or public trading through admission to trading on a regulated market requires the publication of a prospectus.
(17)
Issuers, offerors or persons asking for the admission to trading on a regulated market of securities which are exempted from the obligation to publish a prospectus will benefit from the single passport if they comply with this Directive.
(18)
(13)
Issuance of securities having a similar type and/or class in the case of non-equity securities issued on the basis of an offering programme, including warrants and certificates in any form, as well as the case of securities issued in a continuous or repeated manner, should be understood as covering not only identical securities but also securities that belong in general terms to one category. These securities may include different products, such as debt securities, certificates and warrants, or the same
The provision of full information concerning securities and issuers of those securities promotes, together with rules on the conduct of business, the protection of investors. Moreover, such information provides an effective means of increasing confidence in securities and thus of contributing to the proper functioning and development of securities markets. The appropriate way to make this information available is to publish a prospectus.
(19)
(1) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2000/64/EC of the European Parliament and of the Council (OJ L 290, 17.11.2000, p. 27).
Investment in securities, like any other form of investment, involves risk. Safeguards for the protection of the interests of actual and potential investors are required in all Member States in order to enable them to make an informed assessment of such risks and thus to take investment decisions in full knowledge of the facts.
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Such information, which needs to be sufficient and as objective as possible as regards the financial circumstances of the issuer and the rights attaching to the securities, should be provided in an easily analysable and comprehensible form. Harmonisation of the information contained in the prospectus should provide equivalent investor protection at Community level.
(21)
Information is a key factor in investor protection; a summary conveying the essential characteristics of, and risks associated with, the issuer, any guarantor and the securities should be included in the prospectus. To ensure easy access to this information, the summary should be written in non-technical language and normally should not exceed 2 500 words in the language in which the prospectus was originally drawn up.
Investors should be protected by ensuring publication of reliable information. The issuers whose securities are admitted to trading on a regulated market are subject to an ongoing disclosure obligation but are not required to publish updated information regularly. Further to this obligation, issuers should, at least annually, list all relevant information published or made available to the public over the preceding 12 months, including information provided to the various reporting requirements laid down in other Community legislation. This should make it possible to ensure the publication of consistent and easily understandable information on a regular basis. To avoid excessive burdens for certain issuers, issuers of non-equity securities with high minimum denomination should not be required to meet this obligation.
(22)
Best practices have been adopted at international level in order to allow cross-border offers of equities to be made using a single set of disclosure standards established by the International Organisation of Securities Commissions (IOSCO); the IOSCO disclosure standards (1) will upgrade information available for the markets and investors and at the same time will simplify the procedure for Community issuers wishing to raise capital in third countries. The Directive also calls for tailored disclosure standards to be adopted for other types of securities and issuers.
(28)
It is necessary for the annual information to be provided by issuers whose securities are admitted to trading on a regulated market to be appropriately monitored by Member States in accordance with their obligations under the provisions of Community and national law concerning the regulation of securities, issuers of securities and securities markets.
(23)
Fast-track procedures for issuers admitted to trading on a regulated market and frequently raising capital on these markets require the introduction at Community level of a new format of prospectuses for offering programmes or mortgage bonds and a new registration document system. Issuers may choose not to use those formats and therefore to draft the prospectus as a single document.
(29)
The opportunity of allowing issuers to incorporate by reference documents containing the information to be disclosed in a prospectus provided that the documents incorporated by reference have been previously filed with or accepted by the competent authority should facilitate the procedure of drawing up a prospectus and lower the costs for the issuers without endangering investor protection.
(24)
The content of a base prospectus should, in particular, take into account the need for flexibility in relation to the information to be provided about the securities.
(25)
Omission of sensitive information to be included in a prospectus should be allowed through a derogation granted by the competent authority in certain circumstances in order to avoid detrimental situations for an issuer.
(30)
(26)
A clear time limit should be set for the validity of a prospectus in order to avoid outdated information.
(1) International disclosure standards for cross-border offering and initial listings by foreign issuers, Part I, International Organisation of Securities Commissions, September 1998.
Differences regarding the efficiency, methods and timing of the checking of the information given in a prospectus not only make it more difficult for undertakings to raise capital or to obtain admission to trading on a regulated market in more than one Member State but also hinder the acquisition by investors established in one Member State of securities offered by an issuer established in another Member State or admitted to trading in another Member State. These differences should be eliminated by harmonising the rules and regulations in order to achieve an adequate degree of equivalence of the safeguards required in each Member State to ensure the provision of information which is sufficient and as objective as possible for actual or potential securities holders.
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To facilitate circulation of the various documents making up the prospectus, the use of electronic communication facilities such as the Internet should be encouraged. The prospectus should always be delivered in paper form, free of charge to investors on request.
(32)
The prospectus should be filed with the relevant competent authority and be made available to the public by the issuer, the offeror or the person asking for admission to trading on a regulated market, subject to European Union provisions relating to data protection.
competent authority for prospectus approval should not exclude cooperation between that authority and other entities, with a view to guaranteeing efficient scrutiny and approval of prospectuses in the interest of issuers, investors, markets participants and markets alike. Any delegation of tasks relating to the obligations provided for in this Directive and in its implementing measures should be reviewed, in accordance with Article 31, five years after the date of entry into force of this Directive and should, except for publication on the Internet of approved prospectuses, and the filing of prospectuses as mentioned in Article 14, end eight years after the entry into force of this Directive.
(33)
It is also necessary, in order to avoid loopholes in Community legislation which would undermine public confidence and therefore prejudice the proper functioning of financial markets, to harmonise advertisements.
(38)
A common minimum set of powers for the competent authorities will guarantee the effectiveness of their supervision. The flow of information to the markets required by Directive 2001/34/EC should be ensured and action against breaches should be taken by competent authorities.
(34)
Any new matter liable to influence the assessment of the investment, arising after the publication of the prospectus but before the closing of the offer or the start of trading on a regulated market, should be properly evaluated by investors and therefore requires the approval and dissemination of a supplement to the prospectus.
(39)
For the purposes of carrying out their duties, cooperation between competent authorities of the Member States is required.
(40) (35)
The obligation for an issuer to translate the full prospectus into all the relevant official languages discourages cross-border offers or multiple trading. To facilitate cross-border offers, where the prospectus is drawn up in a language that is customary in the sphere of international finance, the host or home Member State should only be entitled to require a summary in its official language(s).
(41)
Technical guidance and implementing measures for the rules laid down in this Directive may from time to time be necessary to take into account developments on financial markets. The Commission should accordingly be empowered to adopt implementing measures, provided that these do not modify the essential elements of this Directive and provided that the Commission acts in accordance with the principles set out in this Directive, after consulting the European Securities Committee established by Commission Decision 2001/528/EC (1).
(36)
The competent authority of the host Member State should be entitled to receive a certificate from the competent authority of the home Member State which states that the prospectus has been drawn up in accordance with this Directive. In order to ensure that the purposes of this Directive will be fully achieved, it is also necessary to include within its scope securities issued by issuers governed by the laws of third countries.
In exercising its implementing powers in accordance with this Directive, the Commission should respect the following principles: the need to ensure confidence in financial markets among small investors and small and medium-sized enterprises (SMEs) by promoting high standards of transparency in financial markets, the need to provide investors with a wide range of competing investment opportunities and a level of disclosure and protection tailored to their circumstances, the need to ensure that independent regulatory authorities enforce the rules consistently, especially as regards the fight against white-collar crime, the need for a high level of transparency and consultation with all market participants and with the European Parliament and the Council,
(37)
A variety of competent authorities in Member States, having different responsibilities, may create unnecessary costs and overlapping of responsibilities without providing any additional benefit. In each Member State one single competent authority should be designated to approve prospectuses and to assume responsibility for supervising compliance with this Directive. Under strict conditions, a Member State should be allowed to designate more than one competent authority, but only one will assume the duties for international cooperation. Such an authority or authorities should be established as an administrative authority and in such a form that their independence from economic actors is guaranteed and conflicts of interest are avoided. The designation of a
(1) OJ L 191, 13.7.2001, p. 45.
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the need to encourage innovation in financial markets if they are to be dynamic and efficient, the need to ensure systemic stability of the financial system by close and reactive monitoring of financial innovation, the importance of reducing the cost of, and increasing access to, capital, the need to balance, on a long-term basis, the costs and benefits to market participants (including SMEs and small investors) of any implementing measures, the need to foster the international competitiveness of the Community's financial markets without prejudice to a much-needed extension of international cooperation, the need to achieve a level playing field for all market participants by establishing Community legislation every time it is appropriate, the need to respect differences in national financial markets where these do not unduly impinge on the coherence of the single market, the need to ensure coherence with other Community legislation in this area, as imbalances in information and a lack of transparency may jeopardise the operation of the markets and above all harm consumers and small investors.
(42)
The assessment made by the Commission of the application of this Directive should focus in particular on the process of approval of prospectuses by the competent authorities of the Member States, and more generally on the application of the home-country principle, and whether or not problems of investor protection and market efficiency might result from this application; the Commission should also examine the functioning of Article 10. For future developments of this Directive, consideration should be given to the matter of deciding which approval mechanism should be adopted to enhance further the uniform application of Community legislation on prospectuses, including the possible establishment of a European Securities Unit. This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (1),
(47)
(48)
(49)
HAVE ADOPTED THIS DIRECTIVE:
The European Parliament should be given a period of three months from the first transmission of draft implementing measures to allow it to examine them and to give its opinion. However, in urgent and duly justified cases, this period may be shortened. If, within that period, a resolution is passed by the European Parliament, the Commission should re-examine the draft measures. Member States should lay down a system of sanctions for breaches of the national provisions adopted pursuant to this Directive and should take all the measures necessary to ensure that these sanctions are applied. The sanctions thus provided for should be effective, proportional and dissuasive. Provision should be made for the right of judicial review of decisions taken by Member States' competent authorities in respect of the application of this Directive. In accordance with the principle of proportionality, it is necessary and appropriate for the achievement of the basic objective of ensuring the completion of a single securities market to lay down rules on a single passport for issuers. This Directive does not go beyond what is necessary in order to achieve the objectives pursued in accordance with the third paragraph of Article 5 of the Treaty.
CHAPTER I GENERAL PROVISIONS
Article 1 Purpose and scope 1. The purpose of this Directive is to harmonise requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market situated or operating within a Member State. 2. This Directive shall not apply to:
(43)
(44)
(a) units issued by collective investment undertakings other than the closed-end type; (b) non-equity securities issued by a Member State or by one of a Member State's regional or local authorities, by public international bodies of which one or more Member States are members, by the European Central Bank or by the central banks of the Member States; (c) shares in the capital of central banks of the Member States;
(1) OJ L 184, 17.7.1999, p. 23.
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(d) securities unconditionally and irrevocably guaranteed by a Member State or by one of a Member State's regional or local authorities; (e) securities issued by associations with legal status or nonprofit-making bodies, recognised by a Member State, with a view to their obtaining the means necessary to achieve their non-profit-making objectives; (f) non-equity securities issued in a continuous or repeated manner by credit institutions provided that these securities: (i) are not subordinated, convertible or exchangeable; (ii) do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative instrument; (iii) materialise reception of repayable deposits; (iv) are covered by a deposit guarantee scheme under Directive 94/19/EC of the European Parliament and of the Council on deposit-guarantee schemes (1); (g) non-fungible shares of capital whose main purpose is to provide the holder with a right to occupy an apartment, or other form of immovable property or a part thereof and where the shares cannot be sold on without this right being given up; (h) securities included in an offer where the total consideration of the offer is less than EUR 2 500 000, which limit shall be calculated over a period of 12 months; (i) bostadsobligationer issued repeatedly by credit institutions in Sweden whose main purpose is to grant mortgage loans, provided that (i) the bostadsobligationer issued are of the same series; (ii) the bostadsobligationer are issued on tap during a specified issuing period; (iii) the terms and conditions of the bostadsobligationer are not changed during the issuing period; (iv) the sums deriving from the issue of the said bostadsobligationer, in accordance with the articles of association of the issuer, are placed in assets which provide sufficient coverage for the liability deriving from securities; (j) non-equity securities issued in a continuous or repeated manner by credit institutions where the total consideration of the offer is less than EUR 50 000 000, which limit shall be calculated over a period of 12 months, provided that these securities: (i) are not subordinated, convertible or exchangeable; (ii) do not give a right to subscribe to or acquire other types of securities and that they are not linked to a derivative instrument.
(1) OJ L 135, 31.5.1994, p. 5.
3. Notwithstanding paragraph 2(b), (d), (h), (i) and (j), an issuer, an offeror or a person asking for admission to trading on a regulated market shall be entitled to draw up a prospectus in accordance with this Directive when securities are offered to the public or admitted to trading.
Article 2 Definitions 1. For the purposes of this Directive, the following definitions shall apply: (a) securities means transferable securities as defined by Article 1(4) of Directive 93/22/EEC with the exception of money market instruments as defined by Article 1(5) of Directive 93/22/EEC, having a maturity of less than 12 months. For these instruments national legislation may be applicable; (b) equity securities means shares and other transferable securities equivalent to shares in companies, as well as any other type of transferable securities giving the right to acquire any of the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said issuer; (c) non-equity securities means all securities that are not equity securities; (d) offer of securities to the public means a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe to these securities. This definition shall also be applicable to the placing of securities through financial intermediaries; (e) qualified investors means: (i) legal entities which are authorised or regulated to operate in the financial markets, including: credit institutions, investment firms, other authorised or regulated financial institutions, insurance companies, collective investment schemes and their management companies, pension funds and their management companies, commodity dealers, as well as entities not so authorised or regulated whose corporate purpose is solely to invest in securities; (ii) national and regional governments, central banks, international and supranational institutions such as the International Monetary Fund, the European Central Bank, the European Investment Bank and other similar international organisations; (iii) other legal entities which do not meet two of the three criteria set out in paragraph (f);
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(iv) certain natural persons: subject to mutual recognition, a Member State may choose to authorise natural persons who are resident in the Member State and who expressly ask to be considered as qualified investors if these persons meet at least two of the criteria set out in paragraph 2; (v) certain SMEs: subject to mutual recognition, a Member State may choose to authorise SMEs which have their registered office in that Member State and who expressly ask to be considered as qualified investors; (f) small and medium-sized enterprises means companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: an average number of employees during the financial year of less than 250, a total balance sheet not exceeding EUR 43 000 000 and an annual net turnover not exceeding EUR 50 000 000; (g) credit institution means an undertaking as defined by Article 1(1)(a) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (1); (h) issuer means a legal entity which issues or proposes to issue securities; (i) person making an offer (or offeror) means a legal entity or individual which offers securities to the public; (j) regulated market means a market as defined by Article 1(13) of Directive 93/22/EEC; (k) offering programme means a plan which would permit the issuance of non-equity securities, including warrants in any form, having a similar type and/or class, in a continuous or repeated manner during a specified issuing period; (l) securities issued in a continuous or repeated manner means issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months; (m) home Member State means: (i) for all Community issuers of securities which are not mentioned in (ii), the Member State where the issuer has its registered office; (ii) for any issues of non-equity securities whose denomination per unit amounts to at least EUR 1 000, and for any issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer, the Member State where the issuer has its registered office, or where the securities were or are to be admitted to trading on a regulated market or where
(1) OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive 2000/28/EC (OJ L 275, 27.10.2000, p. 37).
the securities are offered to the public, at the choice of the issuer, the offeror or the person asking for admission, as the case may be. The same regime shall be applicable to non-equity securities in a currency other than euro, provided that the value of such minimum denomination is nearly equivalent to EUR 1 000; (iii) for all issuers of securities incorporated in a third country, which are not mentioned in (ii), the Member State where the securities are intended to be offered to the public for the first time after the date of entry into force of this Directive or where the first application for admission to trading on a regulated market is made, at the choice of the issuer, the offeror or the person asking for admission, as the case may be, subject to a subsequent election by issuers incorporated in a third country if the home Member State was not determined by their choice; (n) host Member State means the State where an offer to the public is made or admission to trading is sought, when different from the home Member State; (o) collective investment undertaking other than the closedend type means unit trusts and investment companies: (i) the object of which is the collective investment of capital provided by the public, and which operate on the principle of risk-spreading; (ii) the units of which are, at the holder's request, repurchased or redeemed, directly or indirectly, out of the assets of these undertakings; (p) units of a collective investment undertaking mean securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets; (q) approval means the positive act at the outcome of the scrutiny of the completeness of the prospectus by the home Member State's competent authority including the consistency of the information given and its comprehensibility; (r) base prospectus means a prospectus containing all relevant information as specified in Articles 5, 7 and 16 in case there is a supplement, concerning the issuer and the securities to be offered to the public or admitted to trading, and, at the choice of the issuer, the final terms of the offering.
2. For the purposes of paragraph 1(e)(iv) the criteria are as follows: (a) the investor has carried out transactions of a significant size on securities markets at an average frequency of, at least, 10 per quarter over the previous four quarters; (b) the size of the investor's securities portfolio exceeds EUR 0,5 million;
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(c) the investor works or has worked for at least one year in the financial sector in a professional position which requires knowledge of securities investment. 3. For the purposes of paragraphs 1(e)(iv) and (v) the following shall apply: Each competent authority shall ensure that appropriate mechanisms are in place for a register of natural persons and SMEs considered as qualified investors, taking into account the need to ensure an adequate level of data protection. The register shall be available to all issuers. Each natural person or SME wishing to be considered as a qualified investor shall register and each registered investor may decide to opt out at any moment. 4. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure set out in Article 24(2), adopt implementing measures concerning the definitions referred to in paragraph 1, including adjustment of the figures used for the definition of SMEs, taking into account Community legislation and recommendations as well as economic developments and disclosure measures relating to the registration of individual qualified investors.
3. Member States shall ensure that any admission of securities to trading on a regulated market situated or operating within their territories is subject to the publication of a prospectus.
Article 4 Exemptions from the obligation to publish a prospectus 1. The obligation to publish a prospectus shall not apply to offers of securities to the public of the following types of securities: (a) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued capital; (b) securities offered in connection with a takeover by means of an exchange offer, provided that a document is available containing information which is regarded by the competent authority as being equivalent to that of the prospectus, taking into account the requirements of Community legislation; (c) securities offered, allotted or to be allotted in connection with a merger, provided that a document is available containing information which is regarded by the competent authority as being equivalent to that of the prospectus, taking into account the requirements of Community legislation; (d) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (e) securities offered, allotted or to be allotted to existing or former directors or employees by their employer which has securities already admitted to trading on a regulated market or by an affiliated undertaking, provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer. 2. The obligation to publish a prospectus shall not apply to the admission to trading on a regulated market of the following types of securities: (a) shares representing, over a period of 12 months, less than 10 per cent of the number of shares of the same class already admitted to trading on the same regulated market; (b) shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, if the issuing of such shares does not involve any increase in the issued capital; (c) securities offered in connection with a takeover by means of an exchange offer, provided that a document is available containing information which is regarded by the competent authority as being equivalent to that of the prospectus, taking into account the requirements of Community legislation;
Article 3 Obligation to publish a prospectus 1. Member States shall not allow any offer of securities to be made to the public within their territories without prior publication of a prospectus. 2. The obligation to publish a prospectus shall not apply to the following types of offer: (a) an offer of securities addressed solely to qualified investors; and/or (b) an offer of securities addressed to fewer than 100 natural or legal persons per Member State, other than qualified investors; and/or (c) an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 50 000 per investor, for each separate offer; and/or (d) an offer of securities whose denomination per unit amounts to at least EUR 50 000; and/or (e) an offer of securities with a total consideration of less than EUR 100 000, which limit shall be calculated over a period of 12 months. However, any subsequent resale of securities which were previously the subject of one or more of the types of offer mentioned in this paragraph shall be regarded as a separate offer and the definition set out in Article 2(1)(d) shall apply for the purpose of deciding whether that resale is an offer of securities to the public. The placement of securities through financial intermediaries shall be subject to publication of a prospectus if none of the conditions (a) to (e) are met for the final placement.
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(d) securities offered, allotted or to be allotted in connection with a merger, provided that a document is available containing information which is regarded by the competent authority as being equivalent to that of the prospectus, taking into account the requirements of Community legislation; (e) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (f) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the securities and the reasons for and detail of the offer; (g) shares resulting from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market; (h) securities already admitted to trading on another regulated market, on the following conditions: (i) that these securities, or securities of the same class, have been admitted to trading on that other regulated market for more than 18 months; (ii) that, for securities first admitted to trading on a regulated market after the date of entry into force of this Directive, the admission to trading on that other regulated market was associated with an approved prospectus made available to the public in conformity with Article 14; (iii) that, except where (ii) applies, for securities first admitted to listing after 30 June 1983, listing particulars were approved in accordance with the requirements of Directive 80/390/EEC or Directive 2001/34/ EC; (iv) that the ongoing obligations for trading on that other regulated market have been fulfilled; (v) that the person seeking the admission of a security to trading on a regulated market under this exemption makes a summary document available to the public in a language accepted by the competent authority of the Member State of the regulated market where admission is sought; (vi) that the summary document referred to in (v) is made available to the public in the Member State of the regulated market where admission to trading is sought in the manner set out in Article 14(2); and
(vii) that the contents of the summary document shall comply with Article 5(2). Furthermore the document shall state where the most recent prospectus can be obtained and where the financial information published by the issuer pursuant to his ongoing disclosure obligations is available. 3. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning paragraphs 1(b), 1(c), 2(c) and 2(d), notably in relation to the meaning of equivalence.
CHAPTER II DRAWING UP OF THE PROSPECTUS
Article 5 The prospectus 1. Without prejudice to Article 8(2), the prospectus shall contain all information which, according to the particular nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities. This information shall be presented in an easily analysable and comprehensible form. 2. The prospectus shall contain information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market. It shall also include a summary. The summary shall, in a brief manner and in nontechnical language, convey the essential characteristics and risks associated with the issuer, any guarantor and the securities, in the language in which the prospectus was originally drawn up. The summary shall also contain a warning that: (a) it should be read as an introduction to the prospectus; (b) any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor; (c) where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated; and (d) civil liability attaches to those persons who have tabled the summary including any translation thereof, and applied for its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus.
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Where the prospectus relates to the admission to trading on a regulated market of non-equity securities having a denomination of at least EUR 50 000, there shall be no requirement to provide a summary except when requested by a Member State as provided for in Article 19(4).
5. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning the format of the prospectus or base prospectus and supplements.
3. Subject to paragraph 4, the issuer, offeror or person asking for the admission to trading on a regulated market may draw up the prospectus as a single document or separate documents. A prospectus composed of separate documents shall divide the required information into a registration document, a securities note and a summary note. The registration document shall contain the information relating to the issuer. The securities note shall contain the information concerning the securities offered to the public or to be admitted to trading on a regulated market.
Article 6 Responsibility attaching to the prospectus 1. Member States shall ensure that responsibility for the information given in a prospectus attaches at least to the issuer or its administrative, management or supervisory bodies, the offeror, the person asking for the admission to trading on a regulated market or the guarantor, as the case may be. The persons responsible shall be clearly identified in the prospectus by their names and functions or, in the case of legal persons, their names and registered offices, as well as declarations by them that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import. 2. Member States shall ensure that their laws, regulation and administrative provisions on civil liability apply to those persons responsible for the information given in a prospectus. However, Member States shall ensure that no civil liability shall attach to any person solely on the basis of the summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus.
4. For the following types of securities, the prospectus can, at the choice of the issuer, offeror or person asking for the admission to trading on a regulated market consist of a base prospectus containing all relevant information concerning the issuer and the securities offered to the public or to be admitted to trading on a regulated market: (a) non-equity securities, including warrants in any form, issued under an offering programme; (b) non-equity securities issued in a continuous or repeated manner by credit institutions, (i) where the sums deriving from the issue of the said securities, under national legislation, are placed in assets which provide sufficient coverage for the liability deriving from securities until their maturity date; (ii) where, in the event of the insolvency of the related credit institution, the said sums are intended, as a priority, to repay the capital and interest falling due, without prejudice to the provisions of Directive 2001/ 24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding up of credit institutions (1). The information given in the base prospectus shall be supplemented, if necessary, in accordance with Article 16, with updated information on the issuer and on the securities to be offered to the public or to be admitted to trading on a regulated market. If the final terms of the offer are not included in either the base prospectus or a supplement, the final terms shall be provided to investors and filed with the competent authority when each public offer is made as soon as practicable and if possible in advance of the beginning of the offer. The provisions of Article 8(1)(a) shall be applicable in any such case.
(1) OJ L 125, 5.5.2001, p. 15.
Article 7 Minimum information 1. Detailed implementing measures regarding the specific information which must be included in a prospectus, avoiding duplication of information when a prospectus is composed of separate documents, shall be adopted by the Commission in accordance with the procedure referred to in Article 24(2). The first set of implementing measures shall be adopted by 1 July 2004. 2. In particular, for the elaboration of the various models of prospectuses, account shall be taken of the following: (a) the various types of information needed by investors relating to equity securities as compared with non-equity securities; a consistent approach shall be taken with regard to information required in a prospectus for securities which have a similar economic rationale, notably derivative securities;
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(b) the various types and characteristics of offers and admissions to trading on a regulated market of non-equity securities. The information required in a prospectus shall be appropriate from the point of view of the investors concerned for non-equity securities having a denomination per unit of at least EUR 50 000;
(b) the acceptances of the purchase or subscription of securities may be withdrawn for not less than two working days after the final offer price and amount of securities which will be offered to the public have been filed.
(c) the format used and the information required in prospectuses relating to non-equity securities, including warrants in any form, issued under an offering programme;
The final offer price and amount of securities shall be filed with the competent authority of the home Member State and published in accordance with the arrangements provided for in Article 14(2).
(d) the format used and the information required in prospectuses relating to non-equity securities, in so far as these securities are not subordinated, convertible, exchangeable, subject to subscription or acquisition rights or linked to derivative instruments, issued in a continuous or repeated manner by entities authorised or regulated to operate in the financial markets within the European Economic Area;
2. The competent authority of the home Member State may authorise the omission from the prospectus of certain information provided for in this Directive or in the implementing measures referred to in Article 7(1), if it considers that:
(e) the various activities and size of the issuer, in particular SMEs. For such companies the information shall be adapted to their size and, where appropriate, to their shorter track record;
(a) disclosure of such information would be contrary to the public interest; or
(f) if applicable, the public nature of the issuer.
3. The implementing measures referred to in paragraph 1 shall be based on the standards in the field of financial and non-financial information set out by international securities commission organisations, and in particular by IOSCO and on the indicative Annexes to this Directive.
(b) disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer, offeror or guarantor, if any, and of the rights attached to the securities to which the prospectus relates; or
(c) such information is of minor importance only for a specific offer or admission to trading on a regulated market and is not such as will influence the assessment of the financial position and prospects of the issuer, offeror or guarantor, if any.
Article 8 3. Without prejudice to the adequate information of investors, where, exceptionally, certain information required by implementing measures referred to in Article 7(1) to be included in a prospectus is inappropriate to the issuer's sphere of activity or to the legal form of the issuer or to the securities to which the prospectus relates, the prospectus shall contain information equivalent to the required information. If there is no such information, this requirement shall not apply.
Omission of information
1. Member States shall ensure that where the final offer price and amount of securities which will be offered to the public cannot be included in the prospectus: 4. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning paragraph 2.
(a) the criteria, and/or the conditions in accordance with which the above elements will be determined or, in the case of price, the maximum price, are disclosed in the prospectus; or
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Article 9 Validity of a prospectus, base prospectus and registration document 1. A prospectus shall be valid for 12 months after its publication for offers to the public or admissions to trading on a regulated market, provided that the prospectus is completed by any supplements required pursuant to Article 16. 2. In the case of an offering programme, the base prospectus, previously filed, shall be valid for a period of up to 12 months. 3. In the case of non-equity securities referred to in Article 5(4)(b), the prospectus shall be valid until no more of the securities concerned are issued in a continuous or repeated manner. 4. A registration document, as referred to in Article 5(3), previously filed, shall be valid for a period of up to 12 months provided that it has been updated in accordance with Article 10(1). The registration document accompanied by the securities note, updated if applicable in accordance with Article 12, and the summary note shall be considered to constitute a valid prospectus.
dure referred to in Article 24(2), adopt implementing measures concerning paragraph 1. These measures will relate only to the method of publication of the disclosure requirements mentioned in paragraph 1 and will not entail new disclosure requirements. The first set of implementing measures shall be adopted by 1 July 2004.
Article 11 Incorporation by reference 1. Member States shall allow information to be incorporated in the prospectus by reference to one or more previously or simultaneously published documents that have been approved by the competent authority of the home Member State or filed with it in accordance with this Directive, in particular pursuant to Article 10, or with Titles IV and V of Directive 2001/34/EC. This information shall be the latest available to the issuer. The summary shall not incorporate information by reference. 2. When information is incorporated by reference, a crossreference list must be provided in order to enable investors to identify easily specific items of information. 3. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning the information to be incorporated by reference. The first set of implementing measures shall be adopted by 1 July 2004.
Article 10 Information 1. Issuers whose securities are admitted to trading on a regulated market shall at least annually provide a document that contains or refers to all information that they have published or made available to the public over the preceding 12 months in one or more Member States and in third countries in compliance with their obligations under Community and national laws and rules dealing with the regulation of securities, issuers of securities and securities markets. Issuers shall refer at least to the information required pursuant to company law directives, Directive 2001/34/EC and Regulation (EC) No 1606/ 2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (1). 2. The document shall be filed with the competent authority of the home Member State after the publication of the financial statement. Where the document refers to information, it shall be stated where the information can be obtained. 3. The obligation set out in paragraph 1 shall not apply to issuers of non-equity securities whose denomination per unit amounts to at least EUR 50 000. 4. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission may, in accordance with the proce( ) OJ L 243, 11.9.2002, p. 1.
1
Article 12 Prospectuses consisting of separate documents 1. An issuer which already has a registration document approved by the competent authority shall be required to draw up only the securities note and the summary note when securities are offered to the public or admitted to trading on a regulated market. 2. In this case, the securities note shall provide information that would normally be provided in the registration document if there has been a material change or recent development which could affect investors' assessments since the latest updated registration document or any supplement as provided for in Article 16 was approved. The securities and summary notes shall be subject to a separate approval. 3. Where an issuer has only filed a registration document without approval, the entire documentation, including updated information, shall be subject to approval.
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ARRANGEMENTS FOR APPROVAL AND PUBLICATION OF THE PROSPECTUS
7. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission may, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning the conditions in accordance with which time limits may be adjusted.
Article 13 Approval of the prospectus 1. No prospectus shall be published until it has been approved by the competent authority of the home Member State. 2. This competent authority shall notify the issuer, the offeror or the person asking for admission to trading on a regulated market, as the case may be, of its decision regarding the approval of the prospectus within 10 working days of the submission of the draft prospectus. If the competent authority fails to give a decision on the prospectus within the time limits laid down in this paragraph and paragraph 3, this shall not be deemed to constitute approval of the application. 3. The time limit referred to in paragraph 2 shall be extended to 20 working days if the public offer involves securities issued by an issuer which does not have any securities admitted to trading on a regulated market and who has not previously offered securities to the public. 4. If the competent authority finds, on reasonable grounds, that the documents submitted to it are incomplete or that supplementary information is needed, the time limits referred to in paragraphs 2 and 3 shall apply only from the date on which such information is provided by the issuer, the offeror or the person asking for admission to trading on a regulated market. In the case referred to in paragraph 2 the competent authority should notify the issuer if the documents are incomplete within 10 working days of the submission of the application. 5. The competent authority of the home Member State may transfer the approval of a prospectus to the competent authority of another Member State, subject to the agreement of that authority. Furthermore, this transfer shall be notified to the issuer, the offeror or the person asking for admission to trading on a regulated market within three working days from the date of the decision taken by the competent authority of the home Member State. The time limit referred to in paragraph 2 shall apply from that date. 6. This Directive shall not affect the competent authority's liability, which shall continue to be governed solely by national law. Member States shall ensure that their national provisions on the liability of competent authorities apply only to approvals of prospectuses by their competent authority or authorities. Article 14 Publication of the prospectus 1. Once approved, the prospectus shall be filed with the competent authority of the home Member State and shall be made available to the public by the issuer, offeror or person asking for admission to trading on a regulated market as soon as practicable and in any case, at a reasonable time in advance of, and at the latest at the beginning of, the offer to the public or the admission to trading of the securities involved. In addition, in the case of an initial public offer of a class of shares not already admitted to trading on a regulated market that is to be admitted to trading for the first time, the prospectus shall be available at least six working days before the end of the offer. 2. The prospectus shall be deemed available to the public when published either: (a) by insertion in one or more newspapers circulated throughout, or widely circulated in, the Member States in which the offer to the public is made or the admission to trading is sought; or (b) in a printed form to be made available, free of charge, to the public at the offices of the market on which the securities are being admitted to trading, or at the registered office of the issuer and at the offices of the financial intermediaries placing or selling the securities, including paying agents; or (c) in an electronic form on the issuer's website and, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents; or (d) in an electronic form on the website of the regulated market where the admission to trading is sought; or (e) in electronic form on the website of the competent authority of the home Member State if the said authority has decided to offer this service. A home Member State may require issuers which publish their prospectus in accordance with (a) or (b) also to publish their prospectus in an electronic form in accordance with (c). 3. In addition, a home Member State may require publication of a notice stating how the prospectus has been made available and where it can be obtained by the public.
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4. The competent authority of the home Member State shall publish on its website over a period of 12 months, at its choice, all the prospectuses approved, or at least the list of prospectuses approved in accordance with Article 13, including, if applicable, a hyperlink to the prospectus published on the website of the issuer, or on the website of the regulated market. 5. In the case of a prospectus comprising several documents and/or incorporating information by reference, the documents and information making up the prospectus may be published and circulated separately provided that the said documents are made available, free of charge, to the public, in accordance with the arrangements established in paragraph 2. Each document shall indicate where the other constituent documents of the full prospectus may be obtained. 6. The text and the format of the prospectus, and/or the supplements to the prospectus, published or made available to the public, shall at all times be identical to the original version approved by the competent authority of the home Member State. 7. Where the prospectus is made available by publication in electronic form, a paper copy must nevertheless be delivered to the investor, upon his request and free of charge, by the issuer, the offeror, the person asking for admission to trading or the financial intermediaries placing or selling the securities. 8. In order to take account of technical developments on financial markets and to ensure uniform application of the Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning paragraphs 1, 2, 3 and 4. The first set of implementing measures shall be adopted by 1 July 2004.
4. In any case, all information concerning the offer to the public or the admission to trading on a regulated market disclosed in an oral or written form, even if not for advertising purposes, shall be consistent with that contained in the prospectus. 5. When according to this Directive no prospectus is required, material information provided by an issuer or an offeror and addressed to qualified investors or special categories of investors, including information disclosed in the context of meetings relating to offers of securities, shall be disclosed to all qualified investors or special categories of investors to whom the offer is exclusively addressed. Where a prospectus is required to be published, such information shall be included in the prospectus or in a supplement to the prospectus in accordance with Article 16(1). 6. The competent authority of the home Member State shall have the power to exercise control over the compliance of advertising activity, relating to a public offer of securities or an admission to trading on a regulated market, with the principles referred to in paragraphs 2 to 5. 7. In order to take account of technical developments on financial markets and to ensure uniform application of this Directive, the Commission shall, in accordance with the procedure referred to in Article 24(2), adopt implementing measures concerning the dissemination of advertisements announcing the intention to offer securities to the public or the admission to trading on a regulated market, in particular before the prospectus has been made available to the public or before the opening of the subscription, and concerning paragraph 4. The first set of implementing measures shall be adopted by the Commission by 1 July 2004.
Article 16 Article 15 Supplements to the prospectus Advertisements 1. Any type of advertisements relating either to an offer to the public of securities or to an admission to trading on a regulated market shall observe the principles contained in paragraphs 2 to 5. Paragraphs 2 to 4 shall apply only to cases where the issuer, the offeror or the person applying for admission to trading is covered by the obligation to draw up a prospectus. 2. Advertisements shall state that a prospectus has been or will be published and indicate where investors are or will be able to obtain it. 3. Advertisements shall be clearly recognisable as such. The information contained in an advertisement shall not be inaccurate, or misleading. This information shall also be consistent with the information contained in the prospectus, if already published, or with the information required to be in the prospectus, if the prospectus is published afterwards. 1. Every significant new factor, material mistake or inaccuracy relating to the information included in the prospectus which is capable of affecting the assessment of the securities and which arises or is noted between the time when the prospectus is approved and the final closing of the offer to the public or, as the case may be, the time when trading on a regulated market begins, shall be mentioned in a supplement to the prospectus. Such a supplement shall be approved in the same way in a maximum of seven working days and published in accordance with at least the same arrangements as were applied when the original prospectus was published. The summary, and any translations thereof, shall also be supplemented, if necessary to take into account the new information included in the supplement. 2. Investors who have already agreed to purchase or subscribe for the securities before the supplement is published shall have the right, exercisable within a time limit which shall not be shorter than two working days after the publication of the supplement, to withdraw their acceptances.
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CROSS-BORDER OFFERS AND ADMISSION TO TRADING
Article 17 Community scope of approvals of prospectuses 1. Without prejudice to Article 23, where an offer to the public or admission to trading on a regulated market is provided for in one or more Member States, or in a Member State other than the home Member State, the prospectus approved by the home Member State and any supplements thereto shall be valid for the public offer or the admission to trading in any number of host Member States, provided that the competent authority of each host Member State is notified in accordance with Article 18. Competent authorities of host Member States shall not undertake any approval or administrative procedures relating to prospectuses. 2. If there are significant new factors, material mistakes or inaccuracies, as referred to in Article 16, arising since the approval of the prospectus, the competent authority of the home Member State shall require the publication of a supplement to be approved as provided for in Article 13(1). The competent authority of the host Member State may draw the attention of the competent authority of the home Member State to the need for any new information. Article 18 Notification 1. The competent authority of the home Member State shall, at the request of the issuer or the person responsible for drawing up the prospectus and within three working days following that request or, if the request is submitted together with the draft prospectus, within one working day after the approval of the prospectus provide the competent authority of the host Member State with a certificate of approval attesting that the prospectus has been drawn up in accordance with this Directive and with a copy of the said prospectus. If applicable, this notification shall be accompanied by a translation of the summary produced under the responsibility of the issuer or person responsible for drawing up the prospectus. The same procedure shall be followed for any supplement to the prospectus. 2. The application of the provisions of Article 8(2) and (3) shall be stated in the certificate, as well as its justification.
CHAPTER V USE OF LANGUAGES AND ISSUERS INCORPORATED IN THIRD COUNTRIES
2. Where an offer to the public is made or admission to trading on a regulated market is sought in one or more Member States excluding the home Member State, the prospectus shall be drawn up either in a language accepted by the competent authorities of those Member States or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission, as the case may be. The competent authority of each host Member State may only require that the summary be translated into its official language(s).
For the purpose of the scrutiny by the competent authority of the home Member State, the prospectus shall be drawn up either in a language accepted by this authority or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission to trading, as the case may be.
3. Where an offer to the public is made or admission to trading on a regulated market is sought in more than one Member State including the home Member State, the prospectus shall be drawn up in a language accepted by the competent authority of the home Member State and shall also be made available either in a language accepted by the competent authorities of each host Member State or in a language customary in the sphere of international finance, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be. The competent authority of each host Member State may only require that the summary referred to in Article 5(2) be translated into its official language(s).
4. Where admission to trading on a regulated market of non-equity securities whose denomination per unit amounts to at least EUR 50 000 is sought in one or more Member States, the prospectus shall be drawn up either in a language accepted by the competent authorities of the home and host Member States or in a language customary in the sphere of international finance, at the choice of the issuer, offeror or person asking for admission to trading, as the case may be. Member States may choose to require in their national legislation that a summary be drawn up in their official language(s).
Article 20
Issuers incorporated in third countries
Article 19 Use of languages 1. Where an offer to the public is made or admission to trading on a regulated market is sought only in the home Member State, the prospectus shall be drawn up in a language accepted by the competent authority of the home Member State.
1. The competent authority of the home Member State of issuers having their registered office in a third country may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up in accordance with the legislation of a third country, provided that: (a) the prospectus has been drawn up in accordance with international standards set by international securities commission organisations, including the IOSCO disclosure standards;
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(b) the information requirements, including information of a financial nature, are equivalent to the requirements under this Directive. 2. In the case of an offer to the public or admission to trading on a regulated market of securities, issued by an issuer incorporated in a third country, in a Member State other than the home Member State, the requirements set out in Articles 17, 18 and 19 shall apply. 3. In order to ensure uniform application of this Directive, the Commission may adopt implementing measures in accordance with the procedure referred to in Article 24(2), stating that a third country ensures the equivalence of prospectuses drawn up in that country with this Directive, by reason of its national law or of practices or procedures based on international standards set by international organisations, including the IOSCO disclosure standards.
prevent competition. In any case, the final responsibility for supervising compliance with this Directive and with its implementing measures and for approving the prospectus shall lie with the competent authority or authorities designated in accordance with paragraph 1. Member States shall inform the Commission and the competent authorities of other Member States of any arrangements entered into with regard to delegation of tasks, including the precise conditions regulating such delegation. 3. Each competent authority shall have all the powers necessary for the performance of its functions. A competent authority that has received an application for approving a prospectus shall be empowered at least to: (a) require issuers, offerors or persons asking for admission to trading on a regulated market to include in the prospectus supplementary information, if necessary for investor protection; (b) require issuers, offerors or persons asking for admission to trading on a regulated market, and the persons that control them or are controlled by them, to provide information and documents; (c) require auditors and managers of the issuer, offeror or person asking for admission to trading on a regulated market, as well as financial intermediaries commissioned to carry out the offer to the public or ask for admission to trading, to provide information; (d) suspend a public offer or admission to trading for a maximum of 10 consecutive working days on any single occasion if it has reasonable grounds for suspecting that the provisions of this Directive have been infringed; (e) prohibit or suspend advertisements for a maximum of 10 consecutive working days on any single occasion if it has reasonable grounds for believing that the provisions of this Directive have been infringed; (f) prohibit a public offer if it finds that the provisions of this Directive have been infringed or if it has reasonable grounds for suspecting that they would be infringed; (g) suspend or ask the relevant regulated markets to suspend trading on a regulated market for a maximum of 10 consecutive working days on any single occasion if it has reasonable grounds for believing that the provisions of this Directive have been infringed; (h) prohibit trading on a regulated market if it finds that the provisions of this Directive have been infringed; (i) make public the fact that an issuer is failing to comply with its obligations. Where necessary under national law, the competent authority may ask the relevant judicial authority to decide on the use of the powers referred to in points (d) to (h) above.
CHAPTER VI COMPETENT AUTHORITIES
Article 21 Powers 1. Each Member State shall designate a central competent administrative authority responsible for carrying out the obligations provided for in this Directive and for ensuring that the provisions adopted pursuant to this Directive are applied. However, a Member State may, if so required by national law, designate other administrative authorities to apply Chapter III. These competent authorities shall be completely independent from all market participants. If an offer of securities is made to the public or admission to trading on a regulated market is sought in a Member State other than the home Member State, only the central competent administrative authority designated by each Member State shall be entitled to approve the prospectus. 2. Member States may allow their competent authority or authorities to delegate tasks. Except for delegation of the publication on the Internet of approved prospectuses and the filing of prospectuses as mentioned in Article 14, any delegation of tasks relating to the obligations provided for in this Directive and in its implementing measures shall be reviewed, in accordance with Article 31 by 31 December 2008, and shall end on 31 December 2011. Any delegation of tasks to entities other than the authorities referred to in paragraph 1 shall be made in a specific manner stating the tasks to be undertaken and the conditions under which they are to be carried out. These conditions shall include a clause obliging the entity in question to act and be organised in such a manner as to avoid conflict of interest and so that information obtained from carrying out the delegated tasks is not used unfairly or to
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4. Each competent authority shall also, once the securities have been admitted to trading on a regulated market, be empowered to: (a) require the issuer to disclose all material information which may have an effect on the assessment of the securities admitted to trading on regulated markets in order to ensure investor protection or the smooth operation of the market; (b) suspend or ask the relevant regulated market to suspend the securities from trading if, in its opinion, the issuer's situation is such that trading would be detrimental to investors' interests; (c) ensure that issuers whose securities are traded on regulated markets comply with the obligations provided for in Articles 102 and 103 of Directive 2001/34/EC and that equivalent information is provided to investors and equivalent treatment is granted by the issuer to all securities holders who are in the same position, in all Member States where the offer to the public is made or the securities are admitted to trading; (d) carry out on-site inspections in its territory in accordance with national law, in order to verify compliance with the provisions of this Directive and its implementing measures. Where necessary under national law, the competent authority or authorities may use this power by applying to the relevant judicial authority and/or in cooperation with other authorities. 5. Paragraphs 1 to 4 shall be without prejudice to the possibility for a Member State to make separate legal and administrative arrangements for overseas European territories for whose external relations that Member State is responsible.
appropriate, the competent authority of the host Member State may request the assistance of the competent authority of the home Member State from the stage at which the case is scrutinised, in particular as regards a new type or rare forms of securities. The competent authority of the home Member State may ask for information from the competent authority of the host Member State on any items specific to the relevant market. Without prejudice to Article 21, the competent authorities of Member States may consult with operators of regulated markets as necessary and, in particular, when deciding to suspend, or to ask a regulated market to suspend or prohibit trading. 3. Paragraph 1 shall not prevent the competent authorities from exchanging confidential information. Information thus exchanged shall be covered by the obligation of professional secrecy, to which the persons employed or formerly employed by the competent authorities receiving the information are subject.
Article 23 Precautionary measures 1. Where the competent authority of the host Member State finds that irregularities have been committed by the issuer or by the financial institutions in charge of the public offer or that breaches have been committed of the obligations attaching to the issuer by reason of the fact that the securities are admitted to trading on a regulated market, it shall refer these findings to the competent authority of the home Member State. 2. If, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate, the issuer or the financial institution in charge of the public offer persists in breaching the relevant legal or regulatory provisions, the competent authority of the host Member State, after informing the competent authority of the home Member State, shall take all the appropriate measures in order to protect investors. The Commission shall be informed of such measures at the earliest opportunity.
Article 22 Professional secrecy and cooperation between authorities 1. The obligation of professional secrecy shall apply to all persons who work or have worked for the competent authority and for entities to which competent authorities may have delegated certain tasks. Information covered by professional secrecy may not be disclosed to any other person or authority except in accordance with provisions laid down by law. 2. Competent authorities of Member States shall cooperate with each other whenever necessary for the purpose of carrying out their duties and making use of their powers. Competent authorities shall render assistance to competent authorities of other Member States. In particular, they shall exchange information and cooperate when an issuer has more than one home competent authority because of its various classes of securities, or where the approval of a prospectus has been transferred to the competent authority of another Member State pursuant to Article 13(5). They shall also closely cooperate when requiring suspension or prohibition of trading for securities traded in various Member States in order to ensure a level playing field between trading venues and protection of investors. Where
CHAPTER VII IMPLEMENTING MEASURES
Article 24 Committee procedure 1. The Commission shall be assisted by the European Securities Committee, instituted by Decision 2001/528/EC (hereinafter referred to as the Committee). 2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof and provided that the implementing measures adopted in accordance with this procedure do not modify the essential provisions of this Directive.
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The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months. 3. The Committee shall adopt its rules of procedure.
3. in Article 108(2)(a), the words the conditions of establishment, the control and circulation of listing particulars to be published for admission shall be deleted; 4. Annex I shall be deleted.
4. Without prejudice to the implementing measures already adopted, on the expiry of a four-year period following the entry into force of this Directive the application of its provisions providing for the adoption of technical rules and decisions in accordance with the procedure referred to in paragraph 2 shall be suspended. On a proposal from the Commission, the European Parliament and the Council may renew the provisions concerned in accordance with the procedure laid down in Article 251 of the Treaty and, to that end, shall review them prior to the expiry of the four-year period.
Article 28 Repeal With effect from the date indicated in Article 29, Directive 89/ 298/EEC shall be repealed. References to the repealed Directive shall be construed as references to this Directive.
Article 25 Sanctions 1. Without prejudice to the right of Member States to impose criminal sanctions and without prejudice to their civil liability regime, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible, where the provisions adopted in the implementation of this Directive have not been complied with. Member States shall ensure that these measures are effective, proportionate and dissuasive. 2. Member States shall provide that the competent authority may disclose to the public every measure or sanction that has been imposed for infringement of the provisions adopted pursuant to this Directive, unless the disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.
Article 29 Transposition Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive not later than 1 July 2005. They shall forthwith inform the Commission thereof. When Member States adopt those measures they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods for making such reference shall be laid down by Member States.
Article 30 Transitional provision 1. Issuers which are incorporated in a third country and whose securities have already been admitted to trading on a regulated market shall choose their competent authority in accordance with Article 2(1)(m)(iii) and notify their decision to the competent authority of their chosen home Member State by 31 December 2005. 2. By way of derogation from Article 3, Member States which have used the exemption in Article 5(a) of Directive 89/ 298/EEC may continue to allow credit institutions or other financial institutions equivalent to credit institutions which are not covered by Article 1(2)(j) of this Directive to offer debt securities or other transferable securities equivalent to debt securities issued in a continuous or repeated manner within their territory for five years following the date of entry into force of this Directive. 3. By way of derogation from Article 29, the Federal Republic of Germany shall comply with Article 21(1) by 31 December 2008.
Article 26 Right of appeal Member States shall ensure that decisions taken pursuant to laws, regulations and administrative provisions adopted in accordance with this Directive are subject to the right to appeal to the courts.
CHAPTER VIII TRANSITIONAL AND FINAL PROVISIONS
Article 27 Amendments With effect from the date set out in Article 29, Directive 2001/ 34/EC is hereby amended as follows: 1. Articles 3, 20 to 41, 98 to 101, 104 and 108(2)(c)(ii) shall be deleted; 2. in Article 107(3), the first subparagraph shall be deleted; Article 31 Review Five years after the date of entry into force of this Directive, the Commission shall make an assessment of the application of this Directive and present a report to the European Parliament and the Council, accompanied where appropriate by proposals for its review.
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Official Journal of the European Union Article 32 Entry into force
31.12.2003
This Directive shall enter into force on the day of its publication in the Official Journal of the European Union. Article 33 Addressees This Directive is addressed to the Member States.
Done at Brussels, 4 November 2003. For the European Parliament The President
P. COX
For the Council The President

G. ALEMANNO
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ANNEX I PROSPECTUS I. Summary The summary shall provide in a few pages the most important information included in the prospectus, covering at least the following items: A. identity of directors, senior management, advisers and auditors B. offer statistics and expected timetable C. key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of proceeds; risk factors D. information concerning the issuer history and development of the issuer business overview E. operating and financial review and prospects research and development, patents and licences, etc. trends F. directors, senior management and employees G. major shareholders and related-party transactions H. financial information consolidated statement and other financial information significant changes I. details of the offer and admission to trading offer and admission to trading plan for distribution markets selling shareholders dilution (equity securities only) expenses of the issue J. additional information share capital memorandum and articles of association documents on display
II.
Identity of directors, senior management, advisers and auditors The purpose is to identify the company representatives and other individuals involved in the company's offer or admission to trading; these are the persons responsible for drawing up the prospectus as required by Article 5 of the Directive and those responsible for auditing the financial statements.
III.
Offer statistics and expected timetable The purpose is to provide key information regarding the conduct of any offer and the identification of important dates relating to that offer. A. Offer statistics B. Method and expected timetable
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IV.
EN Key information
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The purpose is to summarise key information about the company's financial condition, capitalisation and risk factors. If the financial statements included in the document are restated to reflect material changes in the company's group structure or accounting policies, the selected financial data must also be restated. A. Selected financial data B. Capitalisation and indebtedness C. Reasons for the offer and use of proceeds D. Risk factors
V.
Information on the company The purpose is to provide information about the company's business operations, the products it makes or the services it provides, and the factors which affect the business. It is also intended to provide information regarding the adequacy and suitability of the company's properties, plant and equipment, as well as its plans for future capacity increases or decreases. A. History and development of the company B. Business overview C. Organisational structure D. Property, plant and equipment
VI.
Operating and financial review and prospects The purpose is to provide the management's explanation of factors that have affected the company's financial condition and results of operations for the historical periods covered by the financial statements, and management's assessment of factors and trends which are expected to have a material effect on the company's financial condition and results of operations in future periods. A. Operating results B. Liquidity and capital resources C. Research and development, patents and licences, etc. D. Trends
VII. Directors, senior management and employees The purpose is to provide information concerning the company's directors and managers that will allow investors to assess their experience, qualifications and levels of remuneration, as well as their relationship with the company. A. Directors and senior management B. Remuneration C. Board practices D. Employees E. Share ownership
VIII. Major shareholders and related-party transactions The purpose is to provide information regarding the major shareholders and others that may control or have an influence on the company. It also provides information regarding transactions the company has entered into with persons affiliated with the company and whether the terms of such transactions are fair to the company. A. Major shareholders B. Related-party transactions C. Interests of experts and advisers
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IX.
EN Financial information
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The purpose is to specify which financial statements must be included in the document, as well as the periods to be covered, the age of the financial statements and other information of a financial nature. The accounting and auditing principles that will be accepted for use in preparation and audit of the financial statements will be determined in accordance with international accounting and auditing standards. A. Consolidated statements and other financial information B. Significant changes X. Details of the offer and admission to trading details The purpose is to provide information regarding the offer and the admission to trading of securities, the plan for distribution of the securities and related matters. A. Offer and admission to trading B. Plan for distribution C. Markets D. Holders of securities who are selling E. Dilution (for equity securities only) F. Expenses of the issue XI. Additional information The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the prospectus. A. Share capital B. Memorandum and articles of association C. Material contracts D. Exchange controls E. Taxation F. Dividends and paying agents G. Statement by experts H. Documents on display I. Subsidiary information
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ANNEX II REGISTRATION DOCUMENT I. Identity of directors, senior management, advisers and auditors The purpose is to identify the company representatives and other individuals involved in the company's offer or admission to trading; these are the persons responsible for drawing up the prospectus and those responsible for auditing the financial statements.
II.
Key information about the issuer The purpose is to summarise key information about the company's financial condition, capitalisation and risk factors. If the financial statements included in the document are restated to reflect material changes in the company's group structure or accounting policies, the selected financial data must also be restated. A. Selected financial data B. Capitalisation and indebtedness C. Risk factors
III.
Information on the company The purpose is to provide information about the company's business operations, the products it makes or the services it provides and the factors which affect the business. It is also intended to provide information regarding the adequacy and suitability of the company's properties, plants and equipment, as well as its plans for future capacity increases or decreases. A. History and development of the company B. Business overview C. Organisational structure D. Property, plants and equipment
IV.
Operating and financial review and prospects The purpose is to provide the management's explanation of factors that have affected the company's financial condition and results of operations for the historical periods covered by the financial statements, and management's assessment of factors and trends which are expected to have a material effect on the company's financial condition and results of operations in future periods. A. Operating results B. Liquidity and capital resources C. Research and development, patents and licences, etc. D. Trends
V.
Directors, senior management and employees The purpose is to provide information concerning the company's directors and managers that will allow investors to assess their experience, qualifications and levels of remuneration, as well as their relationship with the company. A. Directors and senior management B. Remuneration C. Board practices D. Employees E. Share ownership
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VI.
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Major shareholders and related-party transactions The purpose is to provide information regarding the major shareholders and others that may control or have an influence on the company. It also provides information regarding transactions the company has entered into with persons affiliated with the company and whether the terms of such transactions are fair to the company. A. Major shareholders B. Related-party transactions C. Interests of experts and advisers
VII. Financial information The purpose is to specify which financial statements must be included in the document, as well as the periods to be covered, the age of the financial statements and other information of a financial nature. The accounting and auditing principles that will be accepted for use in preparation and audit of the financial statements will be determined in accordance with international accounting and auditing standards. A. Consolidated statements and other financial information B. Significant changes VIII. Additional information The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the prospectus. A. Share capital B. Memorandum and articles of association C. Material contracts D. Statement by experts E. Documents on display F. Subsidiary information
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ANNEX III SECURITIES NOTE I. Identity of directors, senior management, advisers and auditors The purpose is to identify the company representatives and other individuals involved in the company's offer or admission to trading; these are the persons responsible for drawing up the prospectus and those responsible for auditing the financial statements. II. Offer statistics and expected timetable The purpose is to provide key information regarding the conduct of any offer and the identification of important dates relating to that offer. A. Offer statistics B. Method and expected timetable III. Key information about the issuer The purpose is to summarise key information about the company's financial condition, capitalisation and risk factors. If the financial statements included in the document are restated to reflect material changes in the company's group structure or accounting policies, the selected financial data must also be restated. A. Capitalisation and indebtedness B. Reasons for the offer and use of proceeds C. Risk factors IV. Interests of experts The purpose is to provide information regarding transactions the company has entered into with experts or advisers employed on a contingent basis. V. Details of the offer and admission to trading The purpose is to provide information regarding the offer and the admission to trading of securities, the plan for distribution of the securities and related matters. A. Offer and admission to trading B. Plan for distribution C. Markets D. Selling securities holders E. Dilution (for equity securities only) F. Expenses of the issue VI. Additional information The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the prospectus. A. Exchange controls B. Taxation C. Dividends and paying agents D. Statement by experts E. Documents on display
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ANNEX IV SUMMARY NOTE The summary note shall provide in a few pages the most important information included in the prospectus, covering at least the following items: identity of directors, senior management, advisers and auditors offer statistics and expected timetable key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of proceeds; risk factors information concerning the issuer history and development of the issuer business overview operating and financial review and prospects research and development, patents and licences, etc. trends directors, senior management and employees major shareholders and related-party transactions financial information consolidated statement and other financial information significant changes details on the offer and admission to trading offer and admission to trading plan for distribution markets selling shareholders dilution (for equity securities only) expenses of the issue additional information share capital memorandum and articles of incorporation documents available for inspection
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Annex II
Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing the Prospectus Directive as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements (the Prospectus Regulation)
2004R0809 EN 01.03.2007 002.001 1

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
COMMISSION REGULATION (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements
(Text with EEA relevance)
(OJ L 215, 16.6.2004, p. 3)
Amended by: Official Journal No M1 M2 Commission Regulation (EC) No 1787/2006 of 4 December 2006 Commission Regulation (EC) No 211/2007 of 27 February 2007 L 337 L 61 page 17 24 date 5.12.2006 28.2.2007
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B COMMISSION REGULATION (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements
(Text with EEA relevance)
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community, Having regard to Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (1), and in particular Article 5(5), Article 7, Article 10(4), Article 11(3), Article 14(8) and Article 15(7) thereof, After consulting the Committee of European Securities Regulators (CESR) (2) for technical advice, Whereas:
(1)
Directive 2003/71/EC lays down principles to be observed when drawing up prospectuses. These principles need to be supplemented as far as the information to be given therein, the format and aspects of publication, the information to be incorporated by reference in a prospectus and dissemination of advertisements are concerned. Depending on the type of issuer and securities involved, a typology of minimum information requirements should be established corresponding to those schedules that are in practice most frequently applied. The schedules should be based on the information items required in the IOSCO Disclosure Standards for cross-border offering and initial listings (part I) and on the existing schedules of Directive 2001/34/EC of the European Parliament and of the Council of 28 May on the admission of securities to official stock exchange listing and on information to be published on those securities (3). Information given by the issuer, the offeror or the person asking for admission to trading on a regulated market, according to this Regulation, should be subject to European Union provisions relating to data protection. Care should be taken that, in those cases where a prospectus is composed of separate documents, duplication of information is avoided; to this end separate detailed schedules for the registration document and for the securities note, adapted to the particular type of issuer and the securities concerned, should be laid down in order to cover each type of security. The issuer, the offeror or the person asking for admission to trading on a regulated market are entitled to include in a prospectus or base prospectus additional information going beyond the information items provided for in the schedules and building blocks. Any additional information provided should be
(2)
(3)
(4)
(5)
(1) 1 OJ L 345, 31.12.2003, p. 64. (2) 2 CESR was established by Commission Decision 2001/527/EC (OJ L 191, 13.7.2001, p. 43). (3) OJ L 184, 6.7.2001, p. 1. Directive as last amended by Directive 2003/71/EC.
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2004R0809 EN 01.03.2007 002.001 3 B appropriate to the type of securities or the nature of the issuer involved.
(6)
In most cases, given the variety of issuers, the types of securities, the involvement or not of a third party as a guarantor, whether or not there is a listing etc, one single schedule will not give the appropriate information for an investor to make his investment decision. Therefore the combination of various schedules should be possible. A non exhaustive table of combinations, providing for different possible combinations of schedules and building blocks for most of the different type of securities, should be set up in order to assist issuers when drafting their prospectus. The share registration document schedule should be applicable to shares and other transferable securities equivalent to shares but also to other securities giving access to the capital of the issuer by way of conversion or exchange. In the latter case this schedule should not be used where the underlying shares to be delivered have already been issued before the issuance of the securities giving access to the capital of the issuer; however this schedule should be used where the underlying shares to be delivered have already been issued but are not yet admitted to trading on a regulated market. Voluntary disclosure of profit forecasts in a share registration document should be presented in a consistent and comparable manner and accompanied by a statement prepared by independent accountants or auditors. This information should not be confused with the disclosure of known trends or other factual data with material impact on the issuers' prospects. Moreover, they should provide an explanation of any changes in disclosure policy relating to profit forecasts when supplementing a prospectus or drafting a new prospectus. Pro forma financial information is needed in case of significant gross change, i. e. a variation of more than 25 % relative to one or more indicators of the size of the issuer's business, in the situation of an issuer due to a particular transaction, with the exception of those situations where merger accounting is required. The schedule for the share securities note should be applicable to any class of share since it considers information regarding a description of the rights attached to the securities and the procedure for the exercise of any rights attached to the securities. Some debt securities such as structured bonds incorporate certain elements of a derivative security, therefore additional disclosure requirements related to the derivative component in the interest payment should be included in the securities note schedule for debt securities. The additional building block related to guarantee should apply to any obligation in relation to any kind of security. The asset backed securities registration document should not apply to mortgage bonds as provided for in Article 5(4)(b) of Directive 2003/71/EC and other covered bonds. The same should apply for the asset backed securities additional building block that has to be combined with the securities note for debt securities. Wholesale investors should be able to make their investment decision on other elements than those taken into consideration by retail investors. Therefore a differentiated content of prospectus is necessary for debt and derivative securities aimed at those investors who purchase debt or derivative securities with a denomination per unit of at least EUR 50 000 or a denomination in another currency provided that the value of such
(7)
(8)
(9)
(10)
(11)
(12) (13)
(14)
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B minimum denomination when converted to EURO amounts to at least EURO 50 000.
(15)
In the context of depository receipts, emphasis should be put on the issuer of the underlying shares and not on the issuer of the depository receipt. Where there is legal recourse to the depository over and above a breach of its fiduciary or agency duties, the risk factors section in the prospectus should contain full information on this fact and on the circumstances of such recourse. Where a prospectus is drafted as a tripartite document (i.e. registration document, securities note and summary), the registration document should be limited to the information on the depository. The banks registration document schedule should be applicable to banks from third countries which do not fall under the definition of credit institution provided for in Article 1(1)(a) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (1) but have their registered office in a state which is a member of the OECD. If a special purpose vehicle issues debt and derivative securities guaranteed by a bank, it should not use the banks registration document schedule. The schedule securities note for derivative securities should be applicable to securities which are not covered by the other schedules and building blocks. The scope of this schedule is determined by reference to the other two generic categories of shares and debt securities. In order to provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of the underlying, issuers should be able to use appropriate examples on a voluntary basis. For instance, for some complex derivatives securities, examples might be the most effective way to explain the nature of those securities. The additional information building block on the underlying share for certain equity securities should be added to the securities note for debt securities or substitute the item referring to information required in respect of the underlying of the schedule securities note for derivative securities, depending on the characteristics of the securities being issued. Member States and their regional or local authorities are outside the scope of Directive 2003/71/EC. However, they may choose to produce a prospectus in accordance with this Directive. Third country sovereign issuers and their regional or local authorities are not outside the scope of Directive 2003/71/EC and are obliged to produce a prospectus if they wish to make a public offer of securities in the Community or wish their securities to be admitted to trading on a regulated market. For those cases, particular schedules should be used for the securities issued by States, their regional and local authorities and by public international bodies. A base prospectus and its final terms should contain the same information as a prospectus. All the general principles applicable to a prospectus are applicable also to the final terms. Nevertheless, where the final terms are not included in the base prospectus they do not have to be approved by the competent authority. For some categories of issuers the competent authority should be entitled to require adapted information going beyond the information items included in the schedules and building blocks
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(1) OJ L 126, 26.5.2000, p. 1. Directive as last amended by the 2003 Act of Accession.
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B because of the particular nature of the activities carried out by those issuers. A precise and restrictive list of issuers for which adapted information may be required is necessary. The adapted information requirements for each category of issuers included in this list should be appropriate and proportionate to the type of business involved. The Committee of European Securities Regulators could actively try to reach convergence on these information requirements within the Community. Inclusion of new categories in the list should be restricted to those cases where this can be duly justified.
(23)
In the case of completely new types of securities which cannot be covered by the existing schedules or any of their combinations, the issuer should still have the possibility to apply for approval for a prospectus. In those cases he should be able to discuss the content of the information to be provided with the competent authority. The prospectus approved by the competent authority under those circumstances should benefit from the single passport established in Directive 2003/71/EC. The competent authority should always try to find similarities and make use as much as possible of existing schedules. Any additional information requirements should be proportionate and appropriate to the type of securities involved. Certain information items required in the schedules and building blocks or equivalent information items are not relevant to a particular security and thus may be inapplicable in some specific cases; in those cases the issuer should have the possibility to omit this information. The enhanced flexibility in the articulation of the base prospectus with its final terms compared to a single issue prospectus should not hamper the easy access to material information for investors. With respect to base prospectuses, it should be set out in an easily identifiable manner which kind of information will have to be included as final terms. This requirement should be able to be satisfied in a number of different ways, for example, if the base prospectus contains blanks for any information to be inserted in the final terms or if the base prospectus contains a list of the missing information. Where a single document includes more than one base prospectus and each base prospectus would require approval by a different home competent authority, the respective competent authorities should act in cooperation and, where appropriate, transfer the approval of the prospectus in accordance with Article 13(5) of Directive 2003/71/EC, so that the approval by only one competent authority is sufficient for the entire document. Historical financial information as required in the schedules should principally be presented in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standard (1) or Member States accounting standards. Specific requirements should, however, be laid down for third country issuers. For the purposes of publication of the document referred to in Article 10 of Directive 2003/71/EC, issuers should be allowed to choose the method of publication they consider adequate among those referred to in Article 14 of that Directive. In selecting the method of publication they should consider the objective of the document and that it should permit investors a fast and costefficient access to that information.
(24)
(25)
(26)
(27)
(28)
(29)
(1) OJ L 243, 11.9.2002, p. 1.
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(30)
The aim of incorporation by reference, as provided for in Article 11 of Directive 2003/71/EC, is to simplify and reduce the costs of drafting a prospectus; however this aim should not be achieved to the detriment of other interests the prospectus is meant to protect. For instance, the fact that the natural location of the information required is the prospectus, and that the information should be presented in an easily and comprehensible form, should also be considered. Particular attention should be granted to the language used for information incorporated by reference and its consistency with the prospectus itself. Information incorporated by reference may refer to historical data, however if this information is no more relevant due to material change, this should be clearly stated in the prospectus and the updated information should also be provided. Where a prospectus is published in electronic form, additional safety measures compared to traditional means of publication, using best practices available, are necessary in order to maintain the integrity of the information, to avoid manipulation or modification from unauthorised persons, to avoid altering its comprehensibility and to escape from possible adverse consequences from different approaches on offer of securities to the public in third countries. The newspaper chosen for the publication of a prospectus should have a wide area of distribution and a high circulation. A home Member State should be able to require publication of a notice stating how the prospectus has been made available and where it can be obtained by the public. Where a home Member State requires publication of notices in its legislation, the content of such a notice should be kept to the necessary items information to avoid duplication with the summary. These home Member States may also require that an additional notice in relation to the final terms of a base prospectus is to be published. In order to facilitate centralising useful information for investors a mention should be included in the list of approved prospectuses posted in the web-site of the competent authority of the home Member State, indicating how a prospectus has been published and where it can be obtained. Member States should ensure effective compliance of advertising rules concerning public offers and admission to trading on a regulated market. Proper co-ordination between competent authorities should be achieved in cross-border offerings or cross-border admission to trading. In view of the interval between the entry into force of Regulation (EC) No 1606/2002 and the production of certain of its effects, a number of transitional arrangements for historical financial information to be included in a prospectus should be provided for, in order to prevent excessive burden on issuers and enable them to adapt the way they prepare and present historical financial information within a reasonable period of time after the entry into force of Directive 2003/71/EC. The obligation to restate in a prospectus historical financial information according to Regulation (EC) N 1606/2002 does not cover securities with a denomination per unit of at least EUR 50 000; consequently such transitional arrangements are not necessary for such securities. For reasons of coherence it is appropriate that this Regulation applies from the date of transposition of Directive 2003/71/EC. Whereas the measures provided for in this Regulation are in accordance with the opinion of the European Securities Committee,
(31)
(32) (33)
(34)
(35)
(36)
(37)
(38) (39)
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HAS ADOPTED THIS REGULATION:
CHAPTER I SUBJECT MATTER AND DEFINITIONS Article 1 Subject matter This Regulation lays down: 1. the format of prospectus referred to in Article 5 of Directive 2003/71/EC; 2. the minimum information requirements to be included in a prospectus provided for in Article 7 of Directive 2003/71/EC; 3. the method of publication referred to in Article 10 of Directive 2003/71/EC; 4. the modalities according to which information can be incorporated by reference in a prospectus provided for in Article 11 of Directive 2003/71/EC; 5. the publication methods of a prospectus in order to ensure that a prospectus is publicly available according to Article 14 of Directive 2003/71/EC; 6. the methods of dissemination of advertisements referred to in Article 15 of Directive 2003/71/EC. Article 2 Definitions For the purposes of this Regulation, the following definitions shall apply in addition to those laid down in Directive 2003/71/EC: 1. schedule means a list of minimum information requirements adapted to the particular nature of the different types of issuers and/or the different securities involved; building block means a list of additional information requirements, not included in one of the schedules, to be added to one or more schedules, as the case may be, depending on the type of instrument and/or transaction for which a prospectus or base prospectus is drawn up; risk factors means a list of risks which are specific to the situation of the issuer and/or the securities and which are material for taking investment decisions; special purpose vehicle means an issuer whose objects and purposes are primarily the issue of securities; asset backed securities means securities which: (a) represent an interest in assets, including any rights intended to assure servicing, or the receipt or timeliness of receipts by holders of assets of amounts payable there under; or (b) are secured by assets and the terms of which provide for payments which relate to payments or reasonable projections of payments calculated by reference to identified or identifiable assets;
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3.
4. 5.
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6. umbrella collective investment undertaking means a collective investment undertaking invested in one or more collective investment undertakings, the asset of which is composed of separate class(es) or designation(s) of securities; property collective investment undertaking means a collective investment undertaking whose investment objective is the participation in the holding of property in the long term; public international body means a legal entity of public nature established by an international treaty between sovereign States and of which one or more Member States are members; advertisement means announcements: (a) relating to an specific offer to the public of securities or to an admission to trading on a regulated market; and (b) aiming to specifically promote the potential subscription or acquisition of securities. 10. profit forecast means a form of words which expressly states or by implication indicates a figure or a minimum or maximum figure for the likely level of profits or losses for the current financial period and/or financial periods subsequent to that period, or contains data from which a calculation of such a figure for future profits or losses may be made, even if no particular figure is mentioned and the word profit is not used. 11. profit estimate means a profit forecast for a financial period which has expired and for which results have not yet been published. 12. regulated information means all information which the issuer, or any person who has applied for the admission of securities to trading on a regulated market without the issuers consent, is required to disclose under Directive 2001/34/EC or under Article 6 of Directive 2003/6/EC of the European Parliament and of the Council (1).
7.
8.
9.
CHAPTER II MINIMUM INFORMATION Article 3 Minimum information to be included in a prospectus A prospectus shall be drawn up by using one or a combination of the following schedules and building blocks set out in Articles 4 to 20, according to the combinations for various types of securities provided for in Article 21. A prospectus shall contain the information items required in Annexes I to XVII depending on the type of issuer and securities involved, provided for in the schedules and building blocks set out in Articles 4 to 20. M2 Subject to Article 4a(1), a competent authority shall not request that a prospectus contain information items which are not included in Annexes I to XVII.
In order to ensure conformity with the obligation referred to in Article 5 (1) of Directive 2003/71/EC, the competent authority of the home Member State, when approving a prospectus in accordance with Article 13 of that Directive, may require that the information provided by the issuer, the offeror or the person asking for admission
(1) OJ L 96, 12.4.2003, p. 16
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2004R0809 EN 01.03.2007 002.001 9 B to trading on a regulated market be completed, for each of the information items, on a case by case basis. Article 4 Share registration document schedule 1 For the share registration document information shall be given in accordance with the schedule set out in Annex I. 2 The schedule set out in paragraph 1 shall apply to the following:
1. shares and other transferable securities equivalent to shares; 2. other securities which comply with the following conditions: (a) they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuers or at the investors discretion, or on the basis of the conditions established a the moment of the issue, or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares; and (b) provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security and are not yet traded on a regulated market or an equivalent market outside the Community at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement. M2 Article 4a Share registration document schedule in cases of complex financial history or significant financial commitment 1. Where the issuer of a security covered by Article 4(2) has a complex financial history, or has made a significant financial commitment, and in consequence the inclusion in the registration document of certain items of financial information relating to an entity other than the issuer is necessary in order to satisfy the obligation laid down in Article 5(1) of Directive 2003/71/EC, those items of financial information shall be deemed to relate to the issuer. The competent authority of the home Member State shall in such cases request that the issuer, the offeror or the person asking for admission to trading include those items of information in the registration document. Those items of financial information may include pro forma information prepared in accordance with Annex II. In this context, where the issuer has made a significant financial commitment any such pro forma information shall illustrate the anticipated effects of the transaction that the issuer has agreed to undertake, and references in Annex II to the transaction shall be read accordingly. 2. The competent authority shall base any request pursuant to paragraph 1 on the requirements set out in item 20.1 of Annex I as regards the content of financial information and the applicable accounting and auditing principles, subject to any modification which is appropriate in view of any of the following factors: (a) the nature of the securities; (b) the nature and range of information already included in the prospectus, and the existence of financial information relating to
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2004R0809 EN 01.03.2007 002.001 10 M2 an entity other than the issuer in a form that might be included in a prospectus without modification; (c) the facts of the case, including the economic substance of the transactions by which the issuer has acquired or disposed of its business undertaking or any part of it, and the specific nature of that undertaking; (d) the ability of the issuer to obtain financial information relating to another entity with reasonable effort. Where, in the individual case, the obligation laid down in Article 5(1) of Directive 2003/71/EC may be satisfied in more than one way, preference shall be given to the way that is the least costly or onerous. 3. Paragraph 1 is without prejudice to the responsibility under national law of any other person, including the persons referred to in Article 6(1) of Directive 2003/71/EC, for the information contained in the prospectus. In particular, those persons shall be responsible for the inclusion in the registration document of any items of information requested by the competent authority pursuant to paragraph 1. 4. For the purposes of paragraph 1, an issuer shall be treated as having a complex financial history if all of the following conditions apply: (a) its entire business undertaking at the time that the prospectus is drawn up is not accurately represented in the historical financial information which it is required to provide under item 20.1 of Annex I; (b) that inaccuracy will affect the ability of an investor to make an informed assessment as mentioned in Article 5(1) of Directive 2003/71/EC; and (c) information relating to its business undertaking that is necessary for an investor to make such an assessment is included in financial information relating to another entity. 5. For the purposes of paragraph 1, an issuer shall be treated as having made a significant financial commitment if it has entered into a binding agreement to undertake a transaction which, on completion, is likely to give rise to a significant gross change. In this context, the fact that an agreement makes completion of the transaction subject to conditions, including approval by a regulatory authority, shall not prevent that agreement from being treated as binding if it is reasonably certain that those conditions will be fulfilled. In particular, an agreement shall be treated as binding where it makes the completion of the transaction conditional on the outcome of the offer of the securities that are the subject matter of the prospectus or, in the case of a proposed takeover, if the offer of securities that are the subject matter of the prospectus has the objective of funding that takeover. 6. For the purposes of paragraph 5 of this Article, and of item 20.2 of Annex I, a significant gross change means a variation of more than 25 %, relative to one or more indicators of the size of the issuer's business, in the situation of an issuer. B Article 5 Pro forma financial information building block For pro forma financial information, information shall be given in accordance with the building block set out in Annex II.
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2004R0809 EN 01.03.2007 002.001 11 B Pro forma financial information should be preceded by an introductory explanatory paragraph that states in clear terms the purpose of including this information in the prospectus.
Article 6 Share securities note schedule 1 For the share securities note information is necessary to be given in accordance with the schedule set out in Annex III. 2 The schedule shall apply to shares and other transferable securities equivalent to shares.
Article 7 Debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 50 000 For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of less than EUR 50 000 or, where there is no individual denomination, securities that can only be acquired on issue for less than EUR 50 000 per security, information shall be given in accordance with the schedule set out in Annex IV.
Article 8 Securities note schedule for debt securities with a denomination per unit of less than EUR 50 000 1 For the securities note for debt securities with a denomination per unit of less than EUR 50 000 information shall be given in accordance with the schedule set out in Annex V. 2 The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100 % of the nominal value in addition to which there may be also an interest payment.
Article 9 Guarantees building block For guarantees information shall be given in accordance with the building block set out in Annex VI.
Article 10 Asset backed securities registration document schedule For the asset backed securities registration document information shall be given in accordance with the schedule set out in Annex VII.
Article 11 Asset backed securities building block For the additional information building block to the securities note for asset backed securities information shall be given in accordance with the building block set out in Annex VIII.
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2004R0809 EN 01.03.2007 002.001 12 B Article 12 Debt and derivative securities registration document schedule for securities with a denomination per unit of at least EUR 50 000 For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of at least EUR 50 000 or, where there is no individual denomination, securities that can only be acquired on issue for at least EUR 50 000 per security, information shall be given in accordance with the schedule set out in Annex IX.
Article 13 Depository receipts schedule For depository receipts issued over shares information shall be given in accordance with the schedule set out in Annex X.
Article 14 Banks registration document schedule 1 For the banks registration document for debt and derivative securities and those securities which are not covered by Article 4 information shall be given in accordance with the schedule set out in Annex XI. 2 The schedule set out in paragraph 1 shall apply to credit institutions as defined in point (a) of Article 1(1) of Directive 2000/12/EC as well as to third country credit institutions which do not fall under that definition but have their registered office in a state which is a member of the OECD. These entities may also use alternatively the registration document schedules provided for under in Articles 7 and 12.
Article 15 Securities note schedule for derivative securities 1 For the securities note for derivative securities information shall be given in accordance with the schedule set out in Annex XII. 2 The schedule shall apply to securities which are not in the scope of application of the other securities note schedules referred to in Articles 6, 8 and 16, including certain securities where the payment and/or delivery obligations are linked to an underlying.
Article 16 Securities note schedule for debt securities with a denomination per unit of at least EUR 50 000 1 For the securities note for debt securities with a denomination per unit of at least EUR 50 000 information shall be given in accordance with the schedule set out in Annex XIII. 2 The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100 % of the nominal value in addition to which there may be also an interest payment.
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2004R0809 EN 01.03.2007 002.001 13 B Article 17 Additional information building block on the underlying share 1 For the additional information on the underlying share, the description of the underlying share shall be given in accordance with the building block set out in Annex XIV. In addition, if the issuer of the underlying share is an entity belonging to the same group, the information required by the schedule referred to in Article 4 shall be given in respect of that issuer. 2 The additional information referred to in the first subparagraph of paragraph 1 shall only apply to those securities which comply with both of the following conditions: 1. they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuers or at the investors discretion, or on the basis of the conditions established a the moment of the issue or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares; and 2. provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security or by an entity belonging to the group of that issuer and are not yet traded on a regulated market or an equivalent market outside the Community at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement.
Article 18 Registration document schedule for collective undertakings of the closed-end type investment
1 In addition to the information required pursuant to items 1, 2, 3, 4, 5.1, 7, 9.1, 9.2.1, 9.2.3, 10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 of Annex I, for the registration document for securities issued by collective investment undertakings of the closed-end type information shall be given in accordance with the schedule set out in Annex XV. 2 The schedule shall apply to collective investment undertakings of the closed-end type holding a portfolio of assets on behalf of investors that: 1. are recognised by national law in the Member State in which it is incorporated as a collective investment undertaking of the closed end type; or 2. do not take or seek to take legal or management control of any of the issuers of its underlying investments. In such a case, legal control and/or participation in the administrative, management or supervisory bodies of the underlying issuer(s) may be taken where such action is incidental to the primary investment objective, necessary for the protection of shareholders and only in circumstances where the collective investment undertaking will not exercise significant management control over the operations of that underlying issuer(s).
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2004R0809 EN 01.03.2007 002.001 14 B Article 19 Registration document schedule for Member States, third countries and their regional and local authorities 1 For the registration document for securities issued by Member States, third countries and their regional and local authorities information shall be given in accordance with the schedule set out in Annex XVI. 2 The schedule shall apply to all types of securities issued by Member States, third countries and their regional and local authorities. Article 20 Registration document schedule for public international bodies and for issuers of debt securities guaranteed by a member state of the OECD 1 For the registration document for securities issued by public international bodies and for securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is member of the OECD information shall be given in accordance with the schedule set out in Annex XVII. 2 The schedule shall apply to:
all types of securities issued by public international bodies, to debt securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is member of the OECD. Article 21 Combination of schedules and building blocks 1 The use of the combinations provided for in the table set out in Annex XVIII shall be mandatory when drawing up prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used. 2 The most comprehensive and stringent registration document schedule, i.e. the most demanding schedule in term of number of information items and the extent of the information included in them, may always be used to issue securities for which a less comprehensive and stringent registration document schedule is provided for, according to the following ranking of schedules: 1. share registration document schedule; 2. debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 50 000; 3. debt and derivative securities registration document schedule for securities with a denomination per unit at least EUR 50 000. Article 22 Minimum information to be included in a base prospectus and its related final terms 1 A base prospectus shall be drawn up by using one or a combination of schedules and building blocks provided for in Articles 4 to 20
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2004R0809 EN 01.03.2007 002.001 15 B according to the combinations for various types of securities set out in Annex XVIII. A base prospectus shall contain the information items required in Annexes I to XVII depending on the type of issuer and securities involved, provided for in the schedules and building blocks set out in Articles 4 to 20. A competent authority shall not request that a base prospectus contains information items which are not included in Annexes I to XVII. In order to ensure conformity with the obligation referred to in Article 5 (1) of Directive 2003/71/EC, the competent authority of the home Member State, when approving a base prospectus in accordance with Article 13 of that Directive, may require that the information provided by the issuer, the offeror or the person asking for admission to trading on a regulated market be completed, for each of the information items, on a case by case basis. 2 The issuer, the offeror or the person asking for admission to trading on a regulated market may omit information items which are not known when the base prospectus is approved and which can only be determined at the time of the individual issue. 3 The use of the combinations provided for in the table in Annex XVIII shall be mandatory when drawing up base prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used. 4 The final terms attached to a base prospectus shall only contain the information items from the various securities note schedules according to which the base prospectus is drawn up. 5 In addition to the information items set out in the schedules and building blocks referred to in Articles 4 to 20 the following information shall be included in a base prospectus: 1. indication on the information that will be included in the final terms; 2. the method of publication of the final terms; if the issuer is not in a position to determine, at the time of the approval of the prospectus, the method of publication of the final terms, an indication of how the public will be informed about which method will be used for the publication of the final terms; 3. in the case of issues of non equity securities according to point (a) of Article 5(4) of Directive 2003/71/EC, a general description of the programme. 6 Only the following categories of securities may be contained in a base prospectus and its related final terms covering issues of various types of securities: 1. asset backed securities; 2. warrants falling under Article 17; 3. non-equity securities provided for under point (b) of Article 5(4) of Directive 2003/71/EC; 4. all other non-equity securities including warrants with the exception of those mentioned in (2). In drawing up a base prospectus the issuer, the offeror or the person asking for admission to trading on a regulated market shall clearly segregate the specific information on each of the different securities included in these categories. 7 Where an event envisaged under Article 16(1) of Directive 2003/71/EC occurs between the time that the base prospectus has been approved and the final closing of the offer of each issue of secu-
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2004R0809 EN 01.03.2007 002.001 16 B rities under the base prospectus or, as the case may be, the time that trading on a regulated market of those securities begins, the issuer, the offeror or the person asking for admission to trading on a regulated market shall publish a supplement prior to the final closing of the offer or the admission of those securities to trading. Article 23 Adaptations to the minimum information given in prospectuses and base prospectuses 1 Notwithstanding Articles 3 second paragraph and 22(1) second subparagraph, where the issuers activities fall under one of the categories included in Annex XIX, the competent authority of the home Member State, taking into consideration the specific nature of the activities involved, may ask for adapted information, in addition to the information items included in the schedules and building blocks set out in Articles 4 to 20, including, where appropriate, a valuation or other experts report on the assets of the issuer, in order to comply with the obligation referred to in Article 5(1) of Directive 2003/71/EC. The competent authority shall forthwith inform the Commission thereof. In order to obtain the inclusion of a new category in Annex XIX a Member State shall notify its request to the Commission. The Commission shall update this list following the Committee procedure provided for in Article 24 of Directive 2003/71/EC. 2 By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a security which is not the same but comparable to the various types of securities mentioned in the table of combinations set out in Annex XVIII, the issuer, the offeror or the person asking for admission to trading on a regulated market shall add the relevant information items from another securities note schedule provided for in Articles 4 to 20 to the main securities note schedule chosen. This addition shall be done in accordance with the main characteristics of the securities being offered to the public or admitted to trading on a regulated market. 3 By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a new type of security, the issuer, the offeror or the person asking for admission to trading on a regulated market shall notify a draft prospectus or base prospectus to the competent authority of the home Member State. The competent authority shall decide, in consultation with the issuer, the offeror or the person asking for admission to trading on a regulated market, what information shall be included in the prospectus or base prospectus in order to comply with the obligation referred to in Article 5 (1) of Directive 2003/71/EC. The competent authority shall forthwith inform the Commission thereof. The derogation referred to in the first subparagraph shall only apply in case of a new type of security which has features completely different from the various types of securities mentioned in Annex XVIII, if the characteristics of this new security are such that a combination of the different information items referred to in the schedules and building blocks provided for in Articles 4 to 20 is not pertinent. 4 By way of derogation of Articles 3 to 22, in the cases where one of the information items required in one of the schedules or building blocks referred to in 4 to 20 or equivalent information is not pertinent to the issuer, to the offer or to the securities to which the prospectus relates, that information may be omitted.
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2004R0809 EN 01.03.2007 002.001 17 B Article 24 Content of the summary of prospectus and base prospectus The issuer, the offeror or the person asking for admission to trading on a regulated market shall determine on its own the detailed content of the summary to the prospectus or base prospectus referred to in Article 5(2) of Directive 2003/71/EC.
CHAPTER III FORMAT OF THE PROSPECTUS, BASE PROSPECTUS AND SUPPLEMENTS Article 25 Format of the prospectus 1 Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to Article 5(3) of Directive 2003/71/EC to draw up a prospectus as a single document, the prospectus shall be composed of the following parts in the following order: 1. a clear and detailed table of contents; 2. the summary provided for in Article 5 (2) of Directive 2003/71/EC; 3. the risk factors linked to the issuer and the type of security covered by the issue; 4. the other information items included in the schedules and building blocks according to which the prospectus is drawn up. 2 Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to in Article 5(3) of Directive 2003/71/EC, to draw up a prospectus composed of separate documents, the securities note and the registration document shall be each composed of the following parts in the following order: 1. a clear and detailed table of content; 2. as the case may be, the risk factors linked to the issuer and the type of security covered by the issue; 3. the other information items included in the schedules and building blocks according to which the prospectus is drawn up. 3 In the cases mentioned in paragraphs 1 and 2, the issuer, the offeror or the person asking for admission to trading on a regulated market shall be free in defining the order in the presentation of the required information items included in the schedules and building blocks according to which the prospectus is drawn up. 4 Where the order of the items does not coincide with the order of the information provided for in the schedules and building blocks according to which the prospectus is drawn up, the competent authority of the home Member State may ask the issuer, the offeror or the person asking for the admission to trading on a regulated market to provide a cross reference list for the purpose of checking the prospectus before its approval. Such list shall identify the pages where each item can be found in the prospectus. 5 Where the summary of a prospectus must be supplemented according to Article 16(1) of Directive 2003/71/EC, the issuer, the offeror or the person asking for admission to trading on a regulated market shall decide on a case-by-case basis whether to integrate the new
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2004R0809 EN 01.03.2007 002.001 18 B information in the original summary by producing a new summary, or to produce a supplement to the summary. If the new information is integrated in the original summary, the issuer, the offeror or the person asking for admission to trading on a regulated market shall ensure that investors can easily identify the changes, in particular by way of footnotes. Article 26 Format of the base prospectus and its related final terms 1 Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to Article 5 (4) of Directive 2003/71/EC to draw up a base prospectus, the base prospectus shall be composed of the following parts in the following order: 1. a clear and detailed table of contents; 2. the summary provided for in Article 5 (2) of Directive 2003/71/EC; 3. the risk factors linked to the issuer and the type of security or securities covered by the issue(s); 4. the other information items included in the schedules and building blocks according to which the prospectus is drawn up. 2 Notwithstanding paragraph 1, the issuer, the offeror or the person asking for admission to trading on a regulated market shall be free in defining the order in the presentation of the required information items included in the schedules and building blocks according to which the prospectus is drawn up. The information on the different securities contained in the base prospectus shall be clearly segregated. 3 Where the order of the items does not coincide with the order of the information provided for by the schedules and building blocks according to which the prospectus is drawn up, the home competent authority may ask the issuer, the offeror or the person asking for admission to trading on a regulated market to provide a cross reference list for the purpose of checking the prospectus before its approval. Such list should identify the pages where each item can be found in the prospectus. 4 In case the issuer, the offeror or the person asking for admission to trading on a regulated market has previously filed a registration document for a particular type of security and, at a later stage, chooses to draw up base prospectus in conformity with the conditions provided for in points (a) and (b) of Article 5(4) of Directive 2003/71/ EC, the base prospectus shall contain: 1. the information contained in the previously or simultaneously filed and approved registration document which shall be incorporated by reference, following the conditions provided for in Article 28 of this Regulation; 2. the information which would otherwise be contained in the relevant securities note less the final terms where the final terms are not included in the base prospectus. 5 The final terms attached to a base prospectus shall be presented in the form of a separate document containing only the final terms or by inclusion of the final terms into the base prospectus. In the case that the final terms are included in a separate document containing only the final terms, they may replicate some information which has been included in the approved base prospectus according to the relevant securities note schedule that has been used for drawing up the base prospectus. In this case the final terms have to be presented in such a way that they can be easily identified as such.
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2004R0809 EN 01.03.2007 002.001 19 B A clear and prominent statement shall be inserted in the final terms indicating that the full information on the issuer and on the offer is only available on the basis of the combination of base prospectus and final terms and where the base prospectus is available. 6 Where a base prospectus relates to different securities, the issuer, the offeror or the person asking for admission to trading on a regulated market shall include a single summary in the base prospectus for all securities. The information on the different securities contained in the summary, however, shall be clearly segregated. 7 Where the summary of a base prospectus must be supplemented according to Article 16(1) of Directive 2003/71/EC, the issuer, the offeror or the person asking for admission to trading on a regulated market shall decide on a case-by-case basis whether to integrate the new information in the original summary by producing a new summary, or by producing a supplement to the summary. If the new information is integrated in the original summary of the base prospectus by producing a new summary, the issuer, the offeror or the person asking for admission to trading on a regulated market shall ensure that investors can easily identify the changes, in particular by way of footnotes. 8 Issuers, offerors or persons asking for admission to trading on a regulated market may compile in one single document two or more different base prospectuses.
CHAPTER IV INFORMATION AND INCORPORATION BY REFERENCE Article 27 Publication of the document referred to in Article 10(1) of Directive 2003/71/EC 1 The document referred to in Article 10(1) of Directive 2003/71/EC shall be made available to the public, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market, through one of the means permitted under Article 14 of that Directive in the home Member State of the issuer. 2 The document shall be filed with the competent authority of the home Member State and made available to the public at the latest 20 working days after the publication of the annual financial statements in the home Member State. 3 The document shall include a statement indicating that some information may be out-of-date, if such is the case. Article 28 Arrangements for incorporation by reference 1 Information may be incorporated by reference in a prospectus or base prospectus, notably if it is contained in one the following documents: 1. annual and interim financial information; 2. documents prepared on the occasion of a specific transaction such as a merger or de-merger; 3. audit reports and financial statements; 4. memorandum and articles of association;
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2004R0809 EN 01.03.2007 002.001 20 B 5. earlier approved prospectuses; and published prospectuses and/or base
6. regulated information; 7. circulars to security holders. 2 The documents containing information that may be incorporated by reference in a prospectus or base prospectus or in the documents composing it shall be drawn up following the provisions of Article 19 of Directive 2003/71/EC. 3 If a document which may be incorporated by reference contains information which has undergone material changes, the prospectus or base prospectus shall clearly state such a circumstance and shall give the updated information. 4 The issuer, the offeror or the person asking for admission to trading on a regulated market may incorporate information in a prospectus or base prospectus by making reference only to certain parts of a document, provided that it states that the non- incorporated parts are either not relevant for the investor or covered elsewhere in the prospectus. 5 When incorporating information by reference, issuers, offerors or persons asking for admission to trading on a regulated market shall endeavour not to endanger investor protection in terms of comprehensibility and accessibility of the information.
CHAPTER V PUBLICATION AND DISSEMINATION OF ADVERTISEMENTS Article 29 Publication in electronic form 1 The publication of the prospectus or base prospectus in electronic form, either pursuant to points (c) (d) and (e) of Article 14(2) of Directive 2003/71/EC, or as an additional means of availability, shall be subject to the following requirements: 1. the prospectus or base prospectus shall be easily accessible when entering the web-site; 2. the file format shall be such that the prospectus or base prospectus cannot be modified; 3. the prospectus or base prospectus shall not contain hyper-links, with exception of links to the electronic addresses where information incorporated by reference is available; 4. the investors shall have the possibility of downloading and printing the prospectus or base prospectus. The exception referred to in point 3 of the first subparagraph shall only be valid for documents incorporated by reference; those documents shall be available with easy and immediate technical arrangements. 2 If a prospectus or base prospectus for offer of securities to the public is made available on the web-sites of issuers and financial intermediaries or of regulated markets, these shall take measures, to avoid targeting residents in Members States or third countries where the offer of securities to the public does not take place, such as the insertion of a disclaimer as to who are the addressees of the offer.
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2004R0809 EN 01.03.2007 002.001 21 B Article 30 Publication in newspapers 1 In order to comply with point (a) of Article 14(2) of Directive 2003/71/EC the publication of a prospectus or a base prospectus shall be made in a general or financial information newspaper having national or supra-regional scope; 2 If the competent authority is of the opinion that the newspaper chosen for publication does not comply with the requirements set out in paragraph 1, it shall determine a newspaper whose circulation is deemed appropriate for this purpose taking into account, in particular, the geographic area, number of inhabitants and reading habits in each Member State. Article 31 Publication of the notice 1 If a Member State makes use of the option, referred to in Article 14(3) of Directive 2003/71/EC, to require the publication of a notice stating how the prospectus or base prospectus has been made available and where it can be obtained by the public, that notice shall be published in a newspaper that fulfils the requirements for publication of prospectuses according to Article 30 of this Regulation. If the notice relates to a prospectus or base prospectus published for the only purpose of admission of securities to trading on a regulated market where securities of the same class are already admitted, it may alternatively be inserted in the gazette of that regulated market, irrespective of whether that gazette is in paper copy or electronic form. 2 The notice shall be published no later than the next working day following the date of publication of the prospectus or base prospectus pursuant to Article 14(1) of Directive 2003/71/EC. 3 The notice shall contain the following information:
1. the identification of the issuer; 2. the type, class and amount of the securities to be offered and/or in respect of which admission to trading is sought, provided that these elements are known at the time of the publication of the notice; 3. the intended time schedule of the offer/admission to trading; 4. a statement that a prospectus or base prospectus has been published and where it can be obtained; 5. if the prospectus or base prospectus has been published in a printed form, the addresses where and the period of time during which such printed forms are available to the public; 6. if the prospectus or base prospectus has been published in electronic form, the addresses to which investors shall refer to ask for a paper copy; 7. the date of the notice. Article 32 List of approved prospectuses The list of the approved prospectuses and base prospectuses published on the web-site of the competent authority, in accordance with Article 14(4) of Directive 2003/71/EC, shall mention how such prospectuses have been made available and where they can be obtained.
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2004R0809 EN 01.03.2007 002.001 22 B Article 33 Publication of the final terms of base prospectuses The publication method for final terms related to a base prospectus does not have to be the same as the one used for the base prospectus as long as the publication method used is one of the publication methods indicated in Article 14 of the Directive 2003/71/EC. Article 34 Dissemination of advertisements Advertisements related to an offer to the public of securities or to an admission to trading on a regulated market may be disseminated to the public by interested parties, such as issuer, offeror or person asking for admission, the financial intermediaries that participate in the placing and/or underwriting of securities, notably by one of the following means of communication: 1. 2. 3. 4. 5. 6. 7. 8. 9. addressed or unaddressed printed matter; electronic message or advertisement received via a mobile telephone or pager; standard letter; Press advertising with or without order form; catalogue; telephone with or without human intervention; seminars and presentations; radio; videophone;
10. videotext; 11. electronic mail; 12. facsimile machine (fax); 13. television; 14. notice; 15. bill; 16. poster; 17. brochure; 18. web posting including internet banners.
CHAPTER VI TRANSITIONAL AND FINAL PROVISIONS Article 35 Historical financial information 1 The obligation for Community issuers to restate in a prospectus historical financial information according to Regulation (EC) No 1606/2002, set out in Annex I item 20.1, Annex IV item 13.1, Annex VII items 8.2, Annex X items 20.1 and Annex XI item 11.1 shall not apply to any period earlier than 1 January 2004 or, where an issuer has securities admitted to trading on a regulated market on 1 July
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2004R0809 EN 01.03.2007 002.001 23 B 2005, until the issuer has published its first consolidated annual accounts with accordance with Regulation (EC) No 1606/2002. 2 Where a Community issuer is subject to transitional national provisions adopted pursuant Article 9 of Regulation (EC) No 1606/2002, the obligation to restate in a prospectus historical financial information does not apply to any period earlier than 1 January 2006 or, where an issuer has securities admitted to trading on a regulated market on 1 July 2005, until the issuer has published its first consolidated annual accounts with accordance with Regulation (EC) No 1606/2002. 3 Until 1 January 2007 the obligation to restate in a prospectus historical financial information according to Regulation (EC) No 1606/2002, set out in Annex I item 20.1, Annex IV item 13.1, Annex VII items 8.2, Annex X items 20.1 and Annex XI item 11.1 shall not apply to issuers from third countries: 1. who have their securities admitted to trading on a regulated market on 1 January 2007; and 2. who have presented and prepared historical financial information according to the national accounting standards of a third country. In this case, historical financial information shall be accompanied with more detailed and/or additional information if the financial statements included in the prospectus do not give a true and fair view of the issuer's assets and liabilities, financial position and profit and loss. 4 Third country issuers having prepared historical financial information according to internationally accepted standards as referred to in Article 9 of Regulation (EC) No 1606/2002 may use that information in any prospectus filed before 1 January 2007, without being subject to restatement obligations. M1 5. Subject to paragraph 5A, from 1 January 2007, third country issuers referred to in paragraphs 3 and 4 shall present their historical financial information in accordance with international accounting standards adopted under Regulation (EC) No 1606/2002 or a third country's national accounting standards equivalent to those standards. If such historical financial information is not in accordance with any such standards, it must be presented in the form of restated financial statements. 5A. Third country issuers are not subject to a requirement, under Annex I, item 20.1; Annex IV, item 13.1; Annex VII, item 8.2; Annex X, item 20.1 or Annex XI, item 11.1, to restate historical financial information or to a requirement under Annex VII, item 8.2. bis; Annex IX, item 11.1; or Annex X, item 20.1.bis, to provide a narrative description of the differences between international accounting standards adopted under Regulation (EC) No 1606/2002 and the accounting principles in accordance with which such information is drawn up, included in a prospectus filed with a competent authority before 1 January 2009, where one of the following conditions is met: (a) the notes to the financial statements that form part of the historical financial information contain an explicit and unreserved statement that they comply with International Financial Reporting Standards in accordance with IAS 1 Presentation of Financial Statements; (b) the historical financial information is prepared in accordance with the Generally Accepted Accounting Principles of either Canada, Japan or the United States of America; (c) the historical financial information is prepared in accordance with the Generally Accepted Accounting Principles of a third country other than Canada, Japan or the United States of America, and the following conditions are satisfied:
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2004R0809 EN 01.03.2007 002.001 24 M1 (i) the third country authority responsible for the national accounting standards in question has made a public commitment, before the start of the financial year in which the prospectus is filed, to converge those standards with International Financial Reporting Standards;
(ii) that authority has established a work programme which demonstrates the intention to progress towards convergence before 31 December 2008; and (iii) the issuer provides evidence that satisfies the competent authority that the conditions in (i) and (ii) are met. 5B. By 1 April 2007, the Commission shall present to the European Securities Committee and the European Parliament a first report on the work timetable of the authorities responsible for national accounting standards in the US, Japan and Canada for the convergence between IFRS and the Generally Accepted Accounting Principles of those countries. The Commission shall closely monitor, and regularly inform the European Securities Committee and the European Parliament about the amount of progress in the convergence between International Financial Reporting Standards and the Generally Accepted Accounting Principles of Canada, Japan and the United States of America and of progress on the elimination of reconciliation requirements that apply to Community issuers in those countries. In particular, it shall inform the European Securities Committee and the European Parliament immediately if the process is not proceeding satisfactorily. 5C. The Commission shall also regularly inform the European Securities Committee and the European Parliament about the development of regulatory discussions and the amount of progress in the convergence between International Financial Reporting Standards and the Generally Accepted Accounting Principles of third countries mentioned in paragraph 5A(c) and progress towards the elimination of any reconciliation requirements. In particular, the Commission shall inform the European Securities Committee and the European Parliament immediately if the process is not proceeding satisfactorily. 5D. In addition to the obligations under paragraphs 5B and 5C, the Commission shall engage in and maintain a regular dialogue with third country authorities and, before 1 April 2008 at the latest, the Commission shall present a report to the European Securities Committee and to the European Parliament on the progress in convergence and progress towards the elimination of any reconciliation requirements that apply to Community issuers under the rules of a third country covered by paragraph 5A (b) or (c). The Commission may request or require another person to prepare the report. 5E. At least six months before 1 January 2009, the Commission shall ensure a determination of the equivalence of the Generally Accepted Accounting Principles of third countries, pursuant to a definition of equivalence and an equivalence mechanism that it will have established before 1 January 2008 in accordance with the procedure referred to in Article 24 of Directive 2003/71/EC. When complying with this paragraph, the Commission shall first consult the Committee of European Securities Regulators on the appropriateness of the definition of equivalence, the equivalence mechanism and the determination of the equivalence that is made. B
The provisions of this Article shall also apply to Annex VI, item 3.
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2004R0809 EN 01.03.2007 002.001 25 B Article 36 Entry into force This Regulation shall enter into force in Member States on the twentieth day after its publication in the Official Journal of the European Union. It shall apply from 1 July 2005. This Regulation shall be binding in its entirety and directly applicable in all Member States.
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ANNEXES Annexes I to XVII: Schedules and building blocks Annex XVIII: Table of combinations of schedules and building blocks Annex XIX: List of specialist issuers
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ANNEX I Minimum Disclosure Requirements for the Share Registration Document (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the Registration Document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, a declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body). If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, indicate details if material. SELECTED FINANCIAL INFORMATION Selected historical financial information regarding the issuer, presented for each financial year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information. The selected historical financial information must provide the key figures that summarise the financial condition of the issuer. 3.2. If selected financial information for interim periods is provided, comparative data from the same period in the prior financial year must also be provided, except that the requirement for comparative balance sheet information is satisfied by presenting the year end balance sheet information. RISK FACTORS Prominent disclosure of risk factors that are specific to the issuer or its industry in a section headed Risk Factors. 5. 5.1. 5.1.1. 5.1.2. 5.1.3. 5.1.4. INFORMATION ABOUT THE ISSUER History and development of the issuer The legal and commercial name of the issuer The place of registration of the issuer and its registration number The date of incorporation and the length of life of the issuer, except where indefinite The domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, and the address and telephone number of its registered office (or principal place of business if different from its registered office) The important events in the development of the issuer's business. Investments A description, (including the amount) of the issuer's principal investments for each financial year for the period covered by the
1.2.
2. 2.1.
2.2.
3. 3.1.
4.
5.1.5. 5.2. 5.2.1.
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historical financial information up to the date of the registration document 5.2.2. A description of the issuers principal investments that are in progress, including the geographic distribution of these investments (home and abroad) and the method of financing (internal or external) Information concerning the issuer's principal future investments on which its management bodies have already made firm commitments. BUSINESS OVERVIEW Principal Activities A description of, and key factors relating to, the nature of the issuer's operations and its principal activities, stating the main categories of products sold and/or services performed for each financial year for the period covered by the historical financial information; and 6.1.2. An indication of any significant new products and/or services that have been introduced and, to the extent the development of new products or services has been publicly disclosed, give the status of development. Principal Markets A description of the principal markets in which the issuer competes, including a breakdown of total revenues by category of activity and geographic market for each financial year for the period covered by the historical financial information. 6.3. 6.4. Where the information given pursuant to items 6.1 and 6.2 has been influenced by exceptional factors, mention that fact. If material to the issuer's business or profitability, a summary information regarding the extent to which the issuer is dependent, on patents or licences, industrial, commercial or financial contracts or new manufacturing processes. The basis for any statements made by the issuer regarding its competitive position. ORGANISATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and the issuer's position within the group. A list of the issuer's significant subsidiaries, including name, country of incorporation or residence, proportion of ownership interest and, if different, proportion of voting power held. PROPERTY, PLANTS AND EQUIPMENT Information regarding any existing or planned material tangible fixed assets, including leased properties, and any major encumbrances thereon. A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets. OPERATING AND FINANCIAL REVIEW Financial Condition To the extent not covered elsewhere in the registration document, provide a description of the issuers financial condition, changes in financial condition and results of operations for each year and interim period, for which historical financial information is required, including the causes of material changes from year to year in the financial information to the extent necessary for an understanding of the issuers business as a whole. 9.2. 9.2.1. Operating Results Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuer's income from operations, indicating the extent to which income was so affected.
5.2.3. 6. 6.1. 6.1.1.
6.2.
6.5. 7. 7.1. 7.2.
8. 8.1.
8.2. 9. 9.1.
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9.2.2. Where the financial statements disclose material changes in net sales or revenues, provide a narrative discussion of the reasons for such changes. Information regarding any governmental, economic, fiscal, monetary or political policies or factors that have materially affected, or could materially affect, directly or indirectly, the issuer's operations. CAPITAL RESOURCES Information concerning the issuers capital resources (both short and long term); An explanation of the sources and amounts of and a narrative description of the issuer's cash flows; Information on the borrowing requirements and funding structure of the issuer; Information regarding any restrictions on the use of capital resources that have materially affected, or could materially affect, directly or indirectly, the issuers operations. Information regarding the anticipated sources of funds needed to fulfil commitments referred to in items 5.2.3 and 8.1. RESEARCH LICENCES AND DEVELOPMENT, PATENTS AND
9.2.3.
10. 10.1. 10.2. 10.3. 10.4.
10.5. 11.
Where material, provide a description of the issuer's research and development policies for each financial year for the period covered by the historical financial information, including the amount spent on issuer-sponsored research and development activities. 12. 12.1. TREND INFORMATION The most significant recent trends in production, sales and inventory, and costs and selling prices since the end of the last financial year to the date of the registration document. Information on any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the issuer's prospects for at least the current financial year. PROFIT FORECASTS OR ESTIMATES If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information set out in items 13.1 and 13.2: 13.1. A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate. There must be a clear distinction between assumptions about factors which the members of the administrative, management or supervisory bodies can influence and assumptions about factors which are exclusively outside the influence of the members of the administrative, management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast. 13.2. A report prepared by independent accountants or auditors stating that in the opinion of the independent accountants or auditors the forecast or estimate has been properly compiled on the basis stated and that the basis of accounting used for the profit forecast or estimate is consistent with the accounting policies of the issuer. The profit forecast or estimate must be prepared on a basis comparable with the historical financial information. If a profit forecast in a prospectus has been published which is still outstanding, then provide a statement setting out whether or not that forecast is still correct as at the time of the registration document, and an explanation of why such forecast is no longer valid if that is the case.
12.2.
13.
13.3. 13.4.
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14. 14.1. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer: (a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital; (c) founders, if the issuer has been established for fewer than five years; and (d) any senior manager who is relevant to establishing that the issuer has the appropriate expertise and experience for the management of the issuer's business. The nature of any family relationship between any of those persons. In the case of each member of the administrative, management or supervisory bodies of the issuer and of each person mentioned in points (b) and (d) of the first subparagraph, details of that persons relevant management expertise and experience and the following information: (a) the names of all companies and partnerships of which such person has been a member of the administrative, management or supervisory bodies or partner at any time in the previous five years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all the subsidiaries of an issuer of which the person is also a member of the administrative, management or supervisory bodies; (b) any convictions in relation to fraudulent offences for at least the previous five years; (c) details of any bankruptcies, receiverships or liquidations with which a person described in (a) and (d) of the first subparagraph who was acting in the capacity of any of the positions set out in (a) and (d) of the first subparagraph was associated for at least the previous five years; (d) details of any official public incrimination and/or sanctions of such person by statutory or regulatory authorities (including designated professional bodies) and whether such person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years. If there is no such information to be disclosed, a statement to that effect is to be made. 14.2. Administrative, Management, and Supervisory bodies' and Senior Management conflicts of interests Potential conflicts of interests between any duties to the issuer, of the persons referred to in item 14.1 and their private interests and or other duties must be clearly stated. In the event that there are no such conflicts, a statement to that effect must be made. Any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to in item 14.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management. Details of any restrictions agreed by the persons referred to in item 14.1 on the disposal within a certain period of time of their holdings in the issuers securities. 15. REMUNERATION AND BENEFITS In relation to the last full financial year for those persons referred to in points (a) and (d) of the first subparagraph of item 14.1:
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15.1. The amount of remuneration paid (including any contingent or deferred compensation), and benefits in kind granted to such persons by the issuer and its subsidiaries for services in all capacities to the issuer and its subsidiaries by any person. That information must be provided on an individual basis unless individual disclosure is not required in the issuers home country and is not otherwise publicly disclosed by the issuer. 15.2. 16. The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension, retirement or similar benefits. BOARD PRACTICES In relation to the issuer's last completed financial year, and unless otherwise specified, with respect to those persons referred to in point (a) of the first subparagraph of 14.1: 16.1. 16.2. Date of expiration of the current term of office, if applicable, and the period during which the person has served in that office. Information about members of the administrative, management or supervisory bodies' service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement. Information about the issuer's audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committee operates. A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an explanation regarding why the issuer does not comply with such regime. EMPLOYEES Either the number of employees at the end of the period or the average for each financial year for the period covered by the historical financial information up to the date of the registration document (and changes in such numbers, if material) and, if possible and material, a breakdown of persons employed by main category of activity and geographic location. If the issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees on average during the most recent financial year. Shareholdings and stock options With respect to each person referred to in points (a) and (d) of the first subparagraph of item 14.1. provide information as to their share ownership and any options over such shares in the issuer as of the most recent practicable date. 17.3. 18. 18.1. Description of any arrangements for involving the employees in the capital of the issuer. MAJOR SHAREHOLDERS In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest in the issuers capital or voting rights which is notifiable under the issuer's national law, together with the amount of each such persons interest or, if there are no such persons, an appropriate negative statement. Whether the issuer's major shareholders have different voting rights, or an appropriate negative statement. To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom and describe the nature of such control and describe the measures in place to ensure that such control is not abused. A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer.
16.3.
16.4.
17. 17.1.
17.2.
18.2. 18.3.
18.4.
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19. RELATED PARTY TRANSACTIONS Details of related party transactions (which for these purposes are those set out in the Standards adopted according to the Regulation (EC) No 1606/2002), that the issuer has entered into during the period covered by the historical financial information and up to the date of the registration document, must be disclosed in accordance with the respective standard adopted according to Regulation (EC) No 1606/2002 if applicable. If such standards do not apply to the issuer the following information must be disclosed: (a) the nature and extent of any transactions which are - as a single transaction or in their entirety - material to the issuer. Where such related party transactions are not concluded at arm's length provide an explanation of why these transactions were not concluded at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding; (b) the amount or the percentage to which related party transactions form part of the turnover of the issuer. 20. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical Financial Information Audited historical financial information covering the latest 3 financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 36 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements. The last two years audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the issuer has been operating in its current sphere of economic activity for less than one year, the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under the Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least: (a) balance sheet; (b) income statement; (c) a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners;
20.1.
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(d) cash flow statement; (e) accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. 20.2. Pro forma financial information In the case of a significant gross change, a description of how the transaction might have affected the assets and liabilities and earnings of the issuer, had the transaction been undertaken at the commencement of the period being reported on or at the date reported. This requirement will normally be satisfied by the inclusion of pro forma financial information. This pro forma financial information is to be presented as set out in Annex II and must include the information indicated therein. Pro forma financial information must be accompanied by a report prepared by independent accountants or auditors. 20.3. Financial statements If the issuer prepares both own and consolidated annual financial statements, include at least the consolidated annual financial statements in the registration document. 20.4. 20.4.1. Auditing of historical annual financial information A statement that the historical financial information has been audited. If audit reports on the historical financial information have been refused by the statutory auditors or if they contain qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given. Indication of other information in the registration document which has been audited by the auditors. Where financial data in the registration document is not extracted from the issuer's audited financial statements state the source of the data and state that the data is unaudited. Age of latest financial information The last year of audited financial information may not be older than one of the following: (a) 18 months from the date of the registration document if the issuer includes audited interim financial statements in the registration document; (b) 15 months from the date of the registration document if the issuer includes unaudited interim financial statements in the registration document. 20.6. 20.6.1. Interim and other financial information If the issuer has published quarterly or half yearly financial information since the date of its last audited financial statements, these must be included in the registration document. If the quarterly or half yearly financial information has been reviewed or audited, the audit or review report must also be included. If the quarterly or half yearly financial information is unaudited or has not been reviewed state that fact. If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, which may be unaudited (in which case that fact must be stated) covering at least the first six months of the financial year. The interim financial information must include comparative statements for the same period in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet.
20.4.2. 20.4.3.
20.5. 20.5.1.
20.6.2.
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20.7. Dividend policy A description of the issuers policy on dividend distributions and any restrictions thereon. 20.7.1. The amount of the dividend per share for each financial year for the period covered by the historical financial information adjusted, where the number of shares in the issuer has changed, to make it comparable. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past significant effects on the issuer and/or group's financial position or profitability, or provide an appropriate negative statement. 20.9. Significant change in the issuers financial or trading position A description of any significant change in the financial or trading position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate negative statement. 21. 21.1. ADDITIONAL INFORMATION Share Capital The following information as of the date of the most recent balance sheet included in the historical financial information: 21.1.1. The amount of issued capital, and for each class of share capital: (a) the number of shares authorised; (b) the number of shares issued and fully paid and issued but not fully paid; (c) the par value per share, or that the shares have no par value; and (d) a reconciliation of the number of shares outstanding at the beginning and end of the year. If more than 10 % of capital has been paid for with assets other than cash within the period covered by the historical financial information, state that fact. 21.1.2. 21.1.3. 21.1.4. If there are shares not representing capital, state the number and main characteristics of such shares. The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer. The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription. Information about and terms of any acquisition rights and or obligations over authorised but unissued capital or an undertaking to increase the capital. Information about any capital of any member of the group which is under option or agreed conditionally or unconditionally to be put under option and details of such options including those persons to whom such options relate. A history of share capital, highlighting information about any changes, for the period covered by the historical financial information. Memorandum and Articles of Association A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association. A summary of any provisions of the issuer's articles of association, statutes, charter or bylaws with respect to the members of the administrative, management and supervisory bodies. A description of the rights, preferences and restrictions attaching to each class of the existing shares.
20.8.
21.1.5.
21.1.6.
21.1.7. 21.2. 21.2.1. 21.2.2.
21.2.3.
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21.2.4. A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law. A description of the conditions governing the manner in which annual general meetings and extraordinary general meetings of shareholders are called including the conditions of admission. A brief description of any provision of the issuer's articles of association, statutes, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the issuer. An indication of the articles of association, statutes, charter or bylaw provisions, if any, governing the ownership threshold above which shareholder ownership must be disclosed. A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaw governing changes in the capital, where such conditions are more stringent than is required by law. MATERIAL CONTRACTS A summary of each material contract, other than contracts entered into in the ordinary course of business, to which the issuer or any member of the group is a party, for the two years immediately preceding publication of the registration document. A summary of any other contract (not being a contract entered into in the ordinary course of business) entered into by any member of the group which contains any provision under which any member of the group has any obligation or entitlement which is material to the group as at the date of the registration document. 23. 23.1. THIRD PARTY INFORMATION AND STATEMENT EXPERTS AND DECLARATIONS OF ANY INTEREST BY
21.2.5.
21.2.6.
21.2.7.
21.2.8.
22.
Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in which it is included, with the consent of the person who has authorised the contents of that part of the registration document. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuers request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information for the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
23.2.
24.
25.
INFORMATION ON HOLDINGS Information relating to the undertakings in which the issuer holds a proportion of the capital likely to have a significant effect on the assessment of its own assets and liabilities, financial position or profits and losses.
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ANNEX II Pro forma financial information building block 1. The pro forma information must include a description of the transaction, the businesses or entities involved and the period to which it refers, and must clearly state the following: (a) the purpose to which it has been prepared; (b) the fact that it has been prepared for illustrative purposes only; (c) the fact that because of its nature, the pro forma financial information addresses a hypothetical situation and, therefore, does not represent the companys actual financial position or results. 2. In order to present pro forma financial information, a balance sheet and profit and loss account, and accompanying explanatory notes, depending on the circumstances may be included. Pro forma financial information must normally be presented in columnar format, composed of: (a) the historical unadjusted information; (b) the pro forma adjustments; and (c) the resulting pro forma financial information in the final column. The sources of the pro forma financial information have to be stated and, if applicable, the financial statements of the acquired businesses or entities must be included in the prospectus 4. The pro forma information must be prepared in a manner consistent with the accounting policies adopted by the issuer in its last or next financial statements and shall identify the following: (a) the basis upon which it is prepared; (b) the source of each item of information and adjustment. 5. Pro forma information may only be published in respect of: (a) the current financial period; (b) the most recently completed financial period; and/or (c) the most recent interim period for which relevant unadjusted information has been or will be published or is being published in the same document. 6. Pro forma adjustments related to the pro forma financial information must be: (a) clearly shown and explained; (b) directly attributable to the transaction; (c) factually supportable. In addition, in respect of a pro forma profit and loss or cash flow statement, they must be clearly identified as to those expected to have a continuing impact on the issuer and those which are not. 7. The report prepared by the independent accountants or auditors must state that in their opinion: (a) the pro forma financial information has been properly compiled on the basis stated; (b) that basis is consistent with the accounting policies of the issuer.
3.
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ANNEX III Minimum disclosure requirements for the share securities note (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the prospectus and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the prospectus that, having taken all reasonable care to ensure that such is the case the information contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that are material to the securities being offered and/or admitted to trading in order to assess the market risk associated with these securities in a section headed Risk Factors. 3. 3.1. KEY INFORMATION Working capital Statement Statement by the issuer that, in its opinion, the working capital is sufficient for the issuers present requirements or, if not, how it proposes to provide the additional working capital needed. 3.2. Capitalisation and indebtedness A statement of capitalisation and indebtedness (distinguishing between guaranteed and unguaranteed, secured and unsecured indebtedness) as of a date no earlier than 90 days prior to the date of the document. Indebtedness also includes indirect and contingent indebtedness. 3.3. Interest of natural and legal persons involved in the issue/offer A description of any interest, including conflicting ones that is material to the issue/offer, detailing the persons involved and the nature of the interest. 3.4. Reasons for the offer and use of proceeds Reasons for the offer and, where applicable, the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses. If the issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed uses, state the amount and sources of other funds needed. Details must be given with regard to the use of the proceeds, in particular when they are being used to acquire assets, other than in the ordinary course of business, to finance announced acquisitions of other business, or to discharge, reduce or retire indebtedness. 4. 4.1. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING A description of the type and the class of the securities being offered and/or admitted to trading, including the ISIN (international security identification number) or other such security identification code. Legislation under which the securities have been created. An indication whether the securities are in registered form or bearer form and whether the securities are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records. Currency of the securities issue.
1.2.
2.
4.2. 4.3.
4.4.
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4.5. A description of the rights attached to the securities, including any limitations of those rights, and procedure for the exercise of those rights. Dividend rights: fixed date(s) on which the entitlement arises, time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates, dividend restrictions and procedures for non-resident holders, rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments. Voting rights. Pre-emption rights in offers for subscription of securities of the same class. Right to share in the issuers profits. Rights to share in any surplus in the event of liquidation. Redemption provisions. Conversion provisions. 4.6. In the case of new issues, a statement of the resolutions, authorisations and approvals by virtue of which the securities have been or will be created and/or issued. In the case of new issues, the expected issue date of the securities. A description of any restrictions on the free transferability of the securities. An indication of the existence of any mandatory takeover bids and/or squeeze-out and sell-out rules in relation to the securities. An indication of public takeover bids by third parties in respect of the issuers equity, which have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated. In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought: information on taxes on the income from the securities withheld at source, indication as to whether the issuer assumes responsibility for the withholding of taxes at the source. 5. 5.1. 5.1.1. 5.1.2. TERMS AND CONDITIONS OF THE OFFER Conditions, offer statistics, expected timetable and action required to apply for the offer Conditions to which the offer is subject. Total amount of the issue/offer, distinguishing the securities offered for sale and those offered for subscription; if the amount is not fixed, description of the arrangements and time for announcing to the public the definitive amount of the offer. The time period, including any possible amendments, during which the offer will be open and description of the application process. An indication of when, and under which circumstances, the offer may be revoked or suspended and whether revocation can occur after dealing has begun. A description of the possibility to reduce subscriptions and the manner for refunding excess amount paid by applicants. Details of the minimum and/or maximum amount of application (whether in number of securities or aggregate amount to invest).
4.7. 4.8. 4.9. 4.10.
4.11.
5.1.3. 5.1.4.
5.1.5. 5.1.6.
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5.1.7. An indication of the period during which an application may be withdrawn, provided that investors are allowed to withdraw their subscription. Method and time limits for paying up the securities and for delivery of the securities. A full description of the manner and date in which results of the offer are to be made public. The procedure for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised. Plan of distribution and allotment The various categories of potential investors to which the securities are offered. If the offer is being made simultaneously in the markets of two or more countries and if a tranche has been or is being reserved for certain of these, indicate any such tranche. To the extent known to the issuer, an indication of whether major shareholders or members of the issuer's management, supervisory or administrative bodies intended to subscribe in the offer, or whether any person intends to subscribe for more than five per cent of the offer. Pre-allotment disclosure: (a) the division into tranches of the offer including the institutional, retail and issuers employee tranches and any other tranches; (b) the conditions under which the clawback may be used, the maximum size of such claw back and any applicable minimum percentages for individual tranches; (c) the allotment method or methods to be used for the retail and issuers employee tranche in the event of an over-subscription of these tranches; (d) a description of any pre-determined preferential treatment to be accorded to certain classes of investors or certain affinity groups (including friends and family programmes) in the allotment, the percentage of the offer reserved for such preferential treatment and the criteria for inclusion in such classes or groups; (e) whether the treatment of subscriptions or bids to subscribe in the allotment may be determined on the basis of which firm they are made through or by; (f) a target minimum individual allotment if any within the retail tranche; (g) the conditions for the closing of the offer as well as the date on which the offer may be closed at the earliest; (h) whether or not multiple subscriptions are admitted, and where they are not, how any multiple subscriptions will be handled. 5.2.4. 5.2.5. Process for notification to applicants of the amount allotted and indication whether dealing may begin before notification is made. Over-allotment and green shoe: (a) the existence and size of any over-allotment facility and/or green shoe. (b) the existence period of the over-allotment facility and/or green shoe. (c) any conditions for the use of the over-allotment facility or exercise of the green shoe. 5.3. 5.3.1. Pricing An indication of the price at which the securities will be offered. If the price is not known or if there is no established and/or liquid market for the securities, indicate the method for determining the offer price, including a statement as to who has set the criteria or is formally responsible for the determination. Indication of the amount of any expenses and taxes specifically charged to the subscriber or purchaser.
5.1.8. 5.1.9. 5.1.10.
5.2. 5.2.1.
5.2.2.
5.2.3.
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5.3.2. 5.3.3. Process for the disclosure of the offer price. If the issuers equity holders have pre-emptive purchase rights and this right is restricted or withdrawn, indication of the basis for the issue price if the issue is for cash, together with the reasons for and beneficiaries of such restriction or withdrawal. Where there is or could be a material disparity between the public offer price and the effective cash cost to members of the administrative, management or supervisory bodies or senior management, or affiliated persons, of securities acquired by them in transactions during the past year, or which they have the right to acquire, include a comparison of the public contribution in the proposed public offer and the effective cash contributions of such persons. Placing and Underwriting Name and address of the coordinator(s) of the global offer and of single parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place. Name and address of any paying agents and depository agents in each country. Name and address of the entities agreeing to underwrite the issue on a firm commitment basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the agreements, including the quotas. Where not all of the issue is underwritten, a statement of the portion not covered. Indication of the overall amount of the underwriting commission and of the placing commission. When the underwriting agreement has been or will be reached. ADMISSION TO TRADING AND DEALING ARRANGEMENTS An indication as to whether the securities offered are or will be the object of an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with indication of the markets in question. This circumstance must be mentioned, without creating the impression that the admission to trading will necessarily be approved. If known, the earliest dates on which the securities will be admitted to trading. All the regulated markets or equivalent markets on which, to the knowledge of the issuer, securities of the same class of the securities to be offered or admitted to trading are already admitted to trading. If simultaneously or almost simultaneously with the creation of the securities for which admission to a regulated market is being sought securities of the same class are subscribed for or placed privately or if securities of other classes are created for public or private placing, give details of the nature of such operations and of the number and characteristics of the securities to which they relate. Details of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment. Stabilisation: where an issuer or a selling shareholder has granted an over-allotment option or it is otherwise proposed that price stabilising activities may be entered into in connection with an offer: The fact that stabilisation may be undertaken, that there is no assurance that it will be undertaken and that it may be stopped at any time, The beginning and the end of the period during which stabilisation may occur, The identity of the stabilisation manager for each relevant jurisdiction unless this is not known at the time of publication, The fact that stabilisation transactions may result in a market price that is higher than would otherwise prevail.
5.3.4
5.4. 5.4.1
5.4.2 5.4.3.
5.4.4. 6. 6.1.
6.2.
6.3.
6.4.
6.5.
6.5.1. 6.5.2. 6.5.3. 6.5.4.
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7. 7.1. SELLING SECURITIES HOLDERS Name and business address of the person or entity offering to sell the securities, the nature of any position office or other material relationship that the selling persons has had within the past three years with the issuer or any of its predecessors or affiliates. The number and class of securities being offered by each of the selling security holders. Lock-up agreements The parties involved. Content and exceptions of the agreement. Indication of the period of the lock up. 8. 8.1. 9. 9.1. 9.2. EXPENSE OF THE ISSUE/OFFER The total net proceeds and an estimate of the total expenses of the issue/offer. DILUTION The amount and percentage of immediate dilution resulting from the offer. In the case of a subscription offer to existing equity holders, the amount and percentage of immediate dilution if they do not subscribe to the new offer. ADDITIONAL INFORMATION If advisors connected with an issue are mentioned in the Securities Note, a statement of the capacity in which the advisors have acted. An indication of other information in the Securities Note which has been audited or reviewed by statutory auditors and where auditors have produced a report. Reproduction of the report or, with permission of the competent authority, a summary of the report. Where a statement or report attributed to a person as an expert is included in the Securities Note, provide such persons' name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in which it is included, with the consent of the person who has authorised the contents of that part of the Securities Note. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.
7.2. 7.3.
10. 10.1. 10.2.
10.3.
10.4.
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ANNEX IV Minimum disclosure requirements for the debt and derivative securities registration document (schedule) (Debt and derivative securities with a denomination per unit of less than EUR 50 000) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body). If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, details if material. SELECTED FINANCIAL INFORMATION Selected historical financial information regarding the issuer, presented, for each financial year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information. The selected historical financial information must provide key figures that summarise the financial condition of the issuer. 3.2. If selected financial information for interim periods is provided, comparative data from the same period in the prior financial year must also be provided, except that the requirement for comparative balance sheet data is satisfied by presenting the year end balance sheet information. RISK FACTORS Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations under the securities to investors in a section headed Risk Factors. 5. 5.1. 5.1.1. 5.1.2. 5.1.3. 5.1.4. INFORMATION ABOUT THE ISSUER History and development of the Issuer the legal and commercial name of the issuer; the place of registration of the issuer and its registration number; the date of incorporation and the length of life of the issuer, except where indefinite; the domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, and the address and telephone number of its registered office (or principal place of business if different from its registered office); any recent events particular to the issuer which are to a material extent relevant to the evaluation of the issuers solvency.
1.2.
2. 2.1.
2.2.
3. 3.1.
4.
5.1.5.
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5.2. 5.2.1. 5.2.2. 5.2.3. 6. 6.1. 6.1.1. Investments A description of the principal investments made since the date of the last published financial statements. Information concerning the issuers principal future investments, on which its management bodies have already made firm commitments. Information regarding the anticipated sources of funds needed to fulfil commitments referred to in item 5.2.2. BUSINESS OVERVIEW Principal activities A description of the issuers principal activities stating the main categories of products sold and/or services performed; and 6.1.2. 6.2. an indication of any significant new products and/or activities. Principal markets A brief description of the principal markets in which the issuer competes. 6.3. 7. 7.1. 7.2. 8. 8.1. The basis for any statements made by the issuer regarding its competitive position. ORGANISATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and of the issuer's position within it. If the issuer is dependent upon other entities within the group, this must be clearly stated together with an explanation of this dependence. TREND INFORMATION Include a statement that there has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements. In the event that the issuer is unable to make such a statement, provide details of this material adverse change. 8.2. Information on any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the issuer's prospects for at least the current financial year. PROFIT FORECASTS OR ESTIMATES If an issuer chooses to include a profit forecast or a profit estimate, the registration document must contain the information items 9.1 and 9.2: 9.1. A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate. There must be a clear distinction between assumptions about factors which the members of the administrative, management or supervisory bodies can influence and assumptions about factors which are exclusively outside the influence of the members of the administrative, management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast. 9.2. A report prepared by independent accountants or auditors must be included stating that in the opinion of the independent accountants or auditors the forecast or estimate has been properly compiled on the basis stated and that the basis of accounting used for the profit forecast or estimate is consistent with the accounting policies of the issuer. The profit forecast or estimate must be prepared on a basis comparable with the historical financial information. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer:
9.
9.3. 10. 10.1.
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(a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital. 10.2. Administrative, Management, and Supervisory bodies' conflicts of interests Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 10.1 and their private interests and or other duties must be clearly stated. In the event that there are no such conflicts, make a statement to that effect. 11. 11.1. BOARD PRACTICES Details relating to the issuer's audit committee, including the names of committee members and a summary of the terms of reference under which the committee operates. A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime a statement to that effect must be included together with an explanation regarding why the issuer does not comply with such regime. MAJOR SHAREHOLDERS To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom and describe the nature of such control, and describe the measures in place to ensure that such control is not abused. A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical Financial Information Audited historical financial information covering the latest 2 financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 24 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements. The most recent years historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the issuer has been operating in its current sphere of economic activity for less than one year, the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under the Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited.
11.2.
12. 12.1.
12.2.
13.
13.1.
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If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least: (a) balance sheet; (b) income statement; (c) cash flow statement; and (d) accounting policies and explanatory notes The historical annual financial information must have been independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. 13.2. Financial statements If the issuer prepares both own and consolidated financial statements, include at least the consolidated financial statements in the registration document. 13.3. 13.3.1. Auditing of historical annual financial information A statement that the historical financial information has been audited. If audit reports on the historical financial information have been refused by the statutory auditors or if they contain qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given. An indication of other information in the registration document which has been audited by the auditors. Where financial data in the registration document is not extracted from the issuer's audited financial statements state the source of the data and state that the data is unaudited. Age of latest financial information The last year of audited financial information may not be older than 18 months from the date of the registration document. Interim and other financial information If the issuer has published quarterly or half yearly financial information since the date of its last audited financial statements, these must be included in the registration document. If the quarterly or half yearly financial information has been reviewed or audited the audit or review report must also be included. If the quarterly or half yearly financial information is unaudited or has not been reviewed state that fact. If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, covering at least the first six months of the financial year. If the interim financial information is un-audited state that fact. The interim financial information must include comparative statements for the same period in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet. 13.6. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the issuer and/or group's financial position or profitability, or provide an appropriate negative statement. 13.7. Significant change in the issuers financial or trading position A description of any significant change in the financial or trading position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or an appropriate negative statement.
13.3.2. 13.3.3.
13.4. 13.4.1. 13.5. 13.5.1.
13.5.2.
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14. 14.1. 14.1.1. ADDITIONAL INFORMATION Share Capital The amount of the issued capital, the number and classes of the shares of which it is composed with details of their principal characteristics, the part of the issued capital still to be paid up, with an indication of the number, or total nominal value, and the type of the shares not yet fully paid up, broken down where applicable according to the extent to which they have been paid up. Memorandum and Articles of Association The register and the entry number therein, if applicable, and a description of the issuers objects and purposes and where they can be found in the memorandum and articles of association. MATERIAL CONTRACTS A brief summary of all material contracts that are not entered into in the ordinary course of the issuer's business, which could result in any group member being under an obligation or entitlement that is material to the issuers ability to meet its obligation to security holders in respect of the securities being issued. 16. 16.1. THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the registration document. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuer's request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
14.2. 14.2.1.
15.
16.2.
17.
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ANNEX V Minimum disclosure requirements for the securities note related to debt securities (schedule) (Debt securities with a denomination per unit of less than EUR 50 000) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the prospectus and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the prospectus that the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that are material to the securities being offered and/or admitted to trading in order to assess the market risk associated with these securities in a section headed Risk Factors. KEY INFORMATION Interest of natural and legal persons involved in the issue/offer A description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. 3.2. Reasons for the offer and use of proceeds Reasons for the offer if different from making profit and/or hedging certain risks. Where applicable, disclosure of the estimated total expenses of the issue/offer and the estimated net amount of the proceeds. These expenses and proceeds shall be broken into each principal intended use and presented by order of priority of such uses. If the issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed uses, state the amount and sources of other funds needed. 4. 4.1. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING A description of the type and the class of the securities being offered and/or admitted to trading, including the ISIN (International Security Identification Number) or other such security identification code. Legislation under which the securities have been created. An indication of whether the securities are in registered form or bearer form and whether the securities are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records. Currency of the securities issue. Ranking of the securities being offered and/or admitted to trading, including summaries of any clauses that are intended to affect ranking or subordinate the security to any present or future liabilities of the issuer. A description of the rights attached to the securities, including any limitations of those rights, and procedure for the exercise of those rights. The nominal interest rate and provisions relating to interest payable.
1.2.
2. 2.1.
3. 3.1.
4.2. 4.3.
4.4. 4.5.
4.6.
4.7.
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The date from which interest becomes payable and the due dates for interest The time limit on the validity of claims to interest and repayment of principal. Where the rate is not fixed, description of the underlying on which it is based and of the method used to relate the two and an indication where information about the past and the further performance of the underlying and its volatility can be obtained. A description of any market disruption or settlement disruption events that affect the underlying Adjustment rules with relation to events concerning the underlying Name of the calculation agent. If the security has a derivative component in the interest payment, provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of the underlying instrument(s), especially under the circumstances when the risks are most evident. 4.8. Maturity date and arrangements for the amortisation of the loan, including the repayment procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of the holder, it shall be described, stipulating amortisation terms and conditions. An indication of yield. Describe the method whereby that yield is calculated in summary form. Representation of debt security holders including an identification of the organisation representing the investors and provisions applying to such representation. Indication of where the public may have access to the contracts relating to these forms of representation. In the case of new issues, a statement of the resolutions, authorisations and approvals by virtue of which the securities have been or will be created and/or issued. In the case of new issues, the expected issue date of the securities. A description of any restrictions on the free transferability of the securities. In respect of the country of registered office of the issuer and the country(ies) where the offer being made or admission to trading is being sought: information on taxes on the income from the securities withheld at source; indication as to whether the issuer assumes responsibility for the withholding of taxes at the source. 5. 5.1. 5.1.1. 5.1.2. TERMS AND CONDITIONS OF THE OFFER Conditions, offer statistics, expected timetable and action required to apply for the offer Conditions to which the offer is subject. Total amount of the issue/offer; if the amount is not fixed, description of the arrangements and time for announcing to the public the definitive amount of the offer. The time period, including any possible amendments, during which the offer will be open and description of the application process. A description of the possibility to reduce subscriptions and the manner for refunding excess amount paid by applicants. Details of the minimum and/or maximum amount of application, (whether in number of securities or aggregate amount to invest). Method and time limits for paying up the securities and for delivery of the securities. A full description of the manner and date in which results of the offer are to be made public.
4.9. 4.10.
4.11.
4.12. 4.13. 4.14.
5.1.3. 5.1.4. 5.1.5. 5.1.6. 5.1.7.
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5.1.8. The procedure for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised. Plan of distribution and allotment The various categories of potential investors to which the securities are offered. If the offer is being made simultaneously in the markets of two or more countries and if a tranche has been or is being reserved for certain of these, indicate any such tranche. Process for notification to applicants of the amount allotted and indication whether dealing may begin before notification is made. Pricing An indication of the expected price at which the securities will be offered or the method of determining the price and the process for its disclosure. Indicate the amount of any expenses and taxes specifically charged to the subscriber or purchaser. Placing and Underwriting Name and address of the co-ordinator(s) of the global offer and of single parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place. Name and address of any paying agents and depository agents in each country. Name and address of the entities agreeing to underwrite the issue on a firm commitment basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the agreements, including the quotas. Where not all of the issue is underwritten, a statement of the portion not covered. Indication of the overall amount of the underwriting commission and of the placing commission. When the underwriting agreement has been or will be reached. ADMISSION TO TRADING AND DEALING ARRANGEMENTS An indication as to whether the securities offered are or will be the object of an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with indication of the markets in question. This circumstance must be mentioned, without creating the impression that the admission to trading will necessarily be approved. If known, give the earliest dates on which the securities will be admitted to trading. All the regulated markets or equivalent markets on which, to the knowledge of the issuer, securities of the same class of the securities to be offered or admitted to trading are already admitted to trading. Name and address of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment. ADDITIONAL INFORMATION If advisors connected with an issue are mentioned in the Securities Note, a statement of the capacity in which the advisors have acted. An indication of other information in the Securities Note which has been audited or reviewed by statutory auditors and where auditors have produced a report. Reproduction of the report or, with permission of the competent authority, a summary of the report. Where a statement or report attributed to a person as an expert is included in the Securities Note, provide such persons' name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and
5.2. 5.2.1.
5.2.2. 5.3. 5.3.1.
5.4. 5.4.1.
5.4.2. 5.4.3.
5.4.4. 6. 6.1.
6.2.
6.3.
7. 7.1. 7.2.
7.3.
7.4.
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that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information. 7.5. Credit ratings assigned to an issuer or its debt securities at the request or with the co-operation of the issuer in the rating process. A brief explanation of the meaning of the ratings if this has previously been published by the rating provider.
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ANNEX VI Minimum disclosure requirements for guarantees (Additional building block) 1. Nature of the Guarantee A description of any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of guarantee, surety, Keep well Agreement, Mono-line Insurance policy or other equivalent commitment (hereafter referred to generically as guarantees and their provider as guarantor for convenience). Without prejudice to the generality of the foregoing, such arrangements encompass commitments to ensure obligations to repay debt securities and/or the payment of interest and the description shall set out how the arrangement is intended to ensure that the guaranteed payments will be duly serviced. 2. Scope of the Guarantee Details shall be disclosed about the terms and conditions and scope of the guarantee. Without prejudice to the generality of the foregoing, these details should cover any conditionality on the application of the guarantee in the event of any default under the terms of the security and the material terms of any mono-line insurance or keep well agreement between the issuer and the guarantor. Details must also be disclosed of any guarantors power of veto in relation to changes to the security holders rights, such as is often found in Mono-line Insurance. 3. Information to be disclosed about the guarantor The guarantor must disclose information about itself as if it were the issuer of that same type of security that is the subject of the guarantee. 4. Documents on display Indication of the places where the public may have access to the material contracts and other documents relating to the guarantee.
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ANNEX VII Minimum disclosure requirements for asset-backed securities registration document (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information given in the registration document is, to the best of their knowledge, in accordance with the facts and does not omit anything likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that having taken all reasonable care to ensure that such is the case, the information contained in that part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with any membership of any relevant professional body). RISK FACTORS The document must prominently disclose risk factors in a section headed Risk Factors that are specific to the issuer and its industry. INFORMATION ABOUT THE ISSUER: A statement whether the issuer has been established as a special purpose vehicle or entity for the purpose of issuing asset backed securities; The legal and commercial name of the issuer; The place of registration of the issuer and its registration number; The date of incorporation and the length of life of the issuer, except where indefinite; The domicile and legal form of the issuer, the legislation under which the issuer operates its country of incorporation and the address and telephone number of its registered office (or principal place of business if different from its registered office). Description of the amount of the issuers authorised and issued capital and the amount of any capital agreed to be issued, the number and classes of the securities of which it is composed. BUSINESS OVERVIEW A brief description of the issuers principal activities. A global overview of the parties to the securitisation program including information on the direct or indirect ownership or control between those parties. ADMINISTRATIVE, BODIES MANAGEMENT AND SUPERVISORY
1.2.
2. 2.1.
3. 3.1. 4. 4.1.
4.2. 4.3. 4.4. 4.5.
4.6.
5. 5.1. 5.2.
6. 6.1.
Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer: (a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital.
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7. 7.1. MAJOR SHAREHOLDERS To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom, and describe the nature of such control and describe the measures in place to ensure that such control is not abused. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION, AND PROFITS AND LOSSES Where, since the date of incorporation or establishment, an issuer has not commenced operations and no financial statements have been made up as at the date of the registration document, a statement to that effect shall be provided in the registration document. Historical Financial Information Where, since the date of incorporation or establishment, an issuer has commenced operations and financial statements have been made up, the registration document must contain audited historical financial information covering the latest 2 financial years (or shorter period that the issuer has been in operation) and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 24 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Members State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements. The most recent year's historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next annual published financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the issuer has been operating in its current sphere of economic activity for less than one year, the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards where the issuer is from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. 8.2a This paragraph may be used only for issues of asset backed securities having a denomination per unit of at least EUR 50 000. Where, since the date of incorporation or establishment, an issuer has commenced operations and financial statements have been made up, the
8.
8.1.
8.2.
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registration document must contain audited historical financial information covering the latest 2 financial years (or shorter period that the issuer has been in operation) and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 24 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002 or, if not applicable, to a Members State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. Otherwise, the following information must be included in the registration document: (a) a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and that there may be material differences in the financial information had Regulation (EC) No 1606/2002 been applied to the historical financial information; (b) immediately following the historical financial information a narrative description of the differences between the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles adopted by the issuer in preparing its annual financial statements. The most recent years historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. Otherwise, the following information must be included in the registration document: (a) a prominent statement disclosing which auditing standards have been applied; (b) an explanation of any significant departures from International Standards on Auditing. 8.3. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the company is aware), during a period covering at least the previous 12 months, which may have, or have had in the recent past, significant effects on the issuer and/or groups financial position or profitability, or provide an appropriate negative statement. 8.4. Material adverse change in the issuers financial position Where an issuer has prepared financial statements, include a statement that there has been no material adverse change in the financial position or prospects of the issuer since the date of its last published audited financial statements. Where a material adverse change has occurred, this must be disclosed in the registration document.
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9. 9.1. THIRD PARTY INFORMATION AND STATEMENT EXPERTS AND DECLARATIONS OF ANY INTEREST BY
Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the registration document. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading In addition, the issuer shall identify the source(s) of the information. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuers request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
9.2.
10. 10.1.
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ANNEX VIII Minimum disclosure requirements for the asset-backed securities additional building block 1. 1.1. 1.2. THE SECURITIES The minimum denomination of an issue. Where information is disclosed about an undertaking/obligor which is not involved in the issue, provide a confirmation that the information relating to the undertaking/obligor has been accurately reproduced from information published by the undertaking/obligor. So far as the issuer is aware and is able to ascertain from information published by the undertaking/obligor no facts have been omitted which would render the reproduced information misleading. In addition, identify the source(s) of information in the Securities Note that has been reproduced from information published by an undertaking/obligor. 2. 2.1. THE UNDERLYING ASSETS Confirmation that the securitised assets backing the issue have characteristics that demonstrate capacity to produce funds to service any payments due and payable on the securities. In respect of a pool of discrete assets backing the issue: The legal jurisdiction by which the pool of assets is governed (a) In the case of a small number of easily identifiable obligors, a general description of each obligor. (b) In all other cases, a description of: the general characteristics of the obligors; and the economic environment, as well as global statistical data referred to the securitised assets. 2.2.3. 2.2.4. 2.2.5. 2.2.6. 2.2.7. the legal nature of the assets; the expiry or maturity date(s) of the assets; the amount of the assets; loan to value ratio or level of collateralisation; the method of origination or creation of the assets, and for loans and credit agreements, the principal lending criteria and an indication of any loans which do not meet these criteria and any rights or obligations to make further advances; an indication of significant representations and collaterals given to the issuer relating to the assets; any rights to substitute the assets and a description of the manner in which and the type of assets which may be so substituted; if there is any capacity to substitute assets with a different class or quality of assets a statement to that effect together with a description of the impact of such substitution; a description of any relevant insurance policies relating to the assets. Any concentration with one insurer must be disclosed if it is material to the transaction. Where the assets comprise obligations of 5 or fewer obligors which are legal persons or where an obligor accounts for 20 % or more of the assets, or where an obligor accounts for a material portion of the assets, so far as the issuer is aware and/or is able to ascertain from information published by the obligor(s) indicate either of the following: (a) information relating to each obligor as if it were an issuer drafting a registration document for debt and derivative securities with an individual denomination of at least EUR 50 000; (b) if an obligor or guarantor has securities already admitted to trading on a regulated or equivalent market or the obligations are guaranteed by an entity admitted to trading on a regulated or equivalent market, the name, address, country of incorporation, nature of
2.2. 2.2.1. 2.2.2.
2.2.8. 2.2.9.
2.2.10.
2.2.11.
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business and name of the market in which its securities are admitted. 2.2.12. 2.2.13. If a relationship exists that is material to the issue, between the issuer, guarantor and obligor, details of the principal terms of that relationship. Where the assets comprise obligations that are not traded on a regulated or equivalent market, a description of the principal terms and conditions of the obligations. Where the assets comprise equity securities that are admitted to trading on a regulated or equivalent market indicate the following: (a) a description of the securities; (b) a description of the market on which they are traded including its date of establishment, how price information is published, an indication of daily trading volumes, information as to the standing of the market in the country and the name of the markets regulatory authority; (c) the frequency with which prices of the relevant securities, are published. 2.2.15. Where more than ten (10) per cent of the assets comprise equity securities that are not traded on a regulated or equivalent market, a description of those equity securities and equivalent information to that contained in the schedule for share registration document in respect of each issuer of those securities. Where a material portion of the assets are secured on or backed by real property, a valuation report relating to the property setting out both the valuation of the property and cash flow/income streams. Compliance with this disclosure is not required if the issue is of securities backed by mortgage loans with property as security, where there has been no revaluation of the properties for the purpose of the issue, and it is clearly stated that the valuations quoted are as at the date of the original initial mortgage loan origination. 2.3. 2.3.1. In respect of an actively managed pool of assets backing the issue: equivalent information to that contained in items 2.1 and 2.2 to allow an assessment of the type, quality, sufficiency and liquidity of the asset types in the portfolio which will secure the issue; the parameters within which investments can be made, the name and description of the entity responsible for such management including a description of that entitys expertise and experience, a summary of the provisions relating to the termination of the appointment of such entity and the appointment of an alternative management entity, and a description of that entitys relationship with any other parties to the issue. Where an issuer proposes to issue further securities backed by the same assets, a prominent statement to that effect and unless those further securities are fungible with or are subordinated to those classes of existing debt, a description of how the holders of that class will be informed. STRUCTURE AND CASH FLOW Description of the structure of the transaction, including, if necessary, a structure diagram. Description of the entities participating in the issue and description of the functions to be performed by them. Description of the method and date of the sale, transfer, novation or assignment of the assets or of any rights and/or obligations in the assets to the issuer or, where applicable, the manner and time period in which the proceeds from the issue will be fully invested by the issuer. An explanation of the flow of funds including: how the cash flow from the assets will meet the issuers obligations to holders of the securities, including, if necessary, a financial service table and a description of the assumptions used in developing the table;
2.2.14.
2.2.16.
2.3.2.
2.4.
3. 3.1. 3.2. 3.3.
3.4. 3.4.1.
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3.4.2. information on any credit enhancements, an indication of where material potential liquidity shortfalls may occur and the availability of any liquidity supports and indication of provisions designed to cover interest/principal shortfall risks; without prejudice to item 3.4.2, details of any subordinated debt finance; an indication of any investment parameters for the investment of temporary liquidity surpluses and description of the parties responsible for such investment; how payments are collected in respect of the assets; the order of priority of payments made by the issuer to the holders of the class of securities in question; details of any other arrangements upon which payments of interest and principal to investors are dependent; the name, address and significant business activities of the originators of the securitised assets. Where the return on, and/or repayment of the security is linked to the performance or credit of other assets which are not assets of the issuer, items 2.2 and 2.3 are necessary; the name, address and significant business activities of the administrator, calculation agent or equivalent, together with a summary of the administrators/calculation agents responsibilities, their relationship with the originator or the creator of the assets and a summary of the provisions relating to the termination of the appointment of the administrator/calculation agent and the appointment of an alternative administrator/calculation agent; the names and addresses and brief description of: (a) any swap counterparties and any providers of other material forms of credit/liquidity enhancement; (b) the banks with which the main accounts relating to the transaction are held. 4. 4.1. POST ISSUANCE REPORTING Indication in the prospectus whether or not it intends to provide postissuance transaction information regarding securities to be admitted to trading and the performance of the underlying collateral. Where the issuer has indicated that it intends to report such information, specify in the prospectus what information will be reported, where such information can be obtained, and the frequency with which such information will be reported.
3.4.3. 3.4.4.
3.4.5. 3.4.6. 3.4.7. 3.5. 3.6.
3.7.
3.8.
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ANNEX IX Minimum disclosure requirements for the debt and derivative securities registration document (schedule) (Debt and derivative securities with a denomination per unit of at least EUR 50 000) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body). If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, details if material. RISK FACTORS Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations under the securities to investors in a section headed Risk Factors. INFORMATION ABOUT THE ISSUER History and development of the Issuer the legal and commercial name of the issuer; the place of registration of the issuer and its registration number; the date of incorporation and the length of life of the issuer, except where indefinite; the domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, and the address and telephone number of its registered office (or principal place of business if different from its registered office; any recent events particular to the issuer and which are to a material extent relevant to the evaluation of the issuers solvency. BUSINESS OVERVIEW Principal activities: A brief description of the issuers principal activities stating the main categories of products sold and/or services performed; The basis for any statements in the registration document made by the issuer regarding its competitive position. ORGANISATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and of the issuer's position within it.
1.2.
2. 2.1.
2.2.
3. 3.1.
4. 4.1. 4.1.1. 4.1.2. 4.1.3. 4.1.4.
4.1.5. 5. 5.1. 5.1.1. 5.1.2. 6. 6.1.
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6.2. 7. 7.1. If the issuer is dependent upon other entities within the group, this must be clearly stated together with an explanation of this dependence. TREND INFORMATION Include a statement that there has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements. In the event that the issuer is unable to make such a statement, provide details of this material adverse change. 8. PROFIT FORECASTS OR ESTIMATES If an issuer chooses to include a profit forecast or a profit estimate, the registration document must contain the information items 8.1 and 8.2 the following: 8.1. A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate. There must be a clear distinction between assumptions about factors which the members of the administrative, management or supervisory bodies can influence and assumptions about factors which are exclusively outside the influence of the members of the administrative, management or supervisory bodies; be readily understandable by investors; be specific and precise; and not relate to the general accuracy of the estimates underlying the forecast. 8.2. Any profit forecast set out in the registration document must be accompanied by a statement confirming that the said forecast has been properly prepared on the basis stated and that the basis of accounting is consistent with the accounting policies of the issuer. The profit forecast or estimate must be prepared on a basis comparable with the historical financial information. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer: (a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital. 9.2. Administrative, Management, and Supervisory bodies' conflicts of interests Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 9.1 and their private interests and or other duties must be clearly stated. In the event that there are no such conflicts, a statement to that effect. 10. 10.1. MAJOR SHAREHOLDERS To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom, and describe the nature of such control, and describe the measures in place to ensure that such control is not abused. A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical Financial Information Audited historical financial information covering the latest two financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 24 months, or the entire period for
8.3. 9. 9.1.
10.2.
11.
11.1.
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which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Members State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. Otherwise, the following information must be included in the registration document: (a) a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and that there may be material differences in the financial information had Regulation (EC) No 1606/2002 been applied to the historical financial information. (b) immediately following the historical financial information a narrative description of the differences between the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles adopted by the issuer in preparing its annual financial statements. The most recent year's historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. Otherwise, the following information must be included in the registration document: (a) a prominent statement disclosing which auditing standards have been applied; (b) an explanation of any significant departures from international standards on auditing. 11.2. Financial statements If the issuer prepares both own and consolidated financial statements, include at least the consolidated financial statements in the registration document. 11.3. 11.3.1. Auditing of historical annual financial information A statement that the historical financial information has been audited. If audit reports on the historical financial information have been refused by the statutory auditors or if they contain qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given. An indication of other information in the registration document which has been audited by the auditors. Where financial data in the registration document is not extracted from the issuer's audited financial statements, state the source of the data and state that the data is unaudited.
11.3.2. 11.3.3.
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11.4. 11.4.1. 11.5. Age of latest financial information The last year of audited financial information may not be older than 18 months from the date of the registration document. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the issuer and/or group's financial position or profitability, or provide an appropriate negative statement. 11.6. Significant change in the issuers financial or trading position A description of any significant change in the financial or trading position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or an appropriate negative statement. 12. MATERIAL CONTRACTS A brief summary of all material contracts that are not entered into in the ordinary course of the issuer's business, which could result in any group member being under an obligation or entitlement that is material to the issuers ability to meet its obligation to security holders in respect of the securities being issued. 13. 13.1. THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the registration document. Third party information Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading; in addition, identify the source(s) of the information. 14. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuer's request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
13.2.
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ANNEX X Minimum disclosure requirements for the depository receipts issued over shares (schedule) INFORMATION ABOUT THE ISSUER OF THE UNDERLYING SHARES 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the prospectus and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body). If auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information, indicate details if material. SELECTED FINANCIAL INFORMATION Selected historical financial information regarding the issuer, presented for each financial year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information. The selected historical financial information must provide the key figures that summarise the financial condition of the issuer. 3.2. If selected financial information for interim periods is provided, comparative data from the same period in the prior financial year shall also be provided, except that the requirement for comparative balance sheet information is satisfied by presenting the year end balance sheet information. RISK FACTORS Prominent disclosure of risk factors that are specific to the issuer or its industry in a section headed Risk Factors. 5. 5.1. 5.1.1. 5.1.2. 5.1.3. 5.1.4. INFORMATION ABOUT THE ISSUER History and development of the issuer the legal and commercial name of the issuer; the place of registration of the issuer and its registration number; the date of incorporation and the length of life of the issuer, except where indefinite; the domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, and the address and telephone number of its registered office (or principal place of business if different from its registered office); the important events in the development of the issuer's business.
1.2.
2. 2.1.
2.2.
3. 3.1.
4.
5.1.5.
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5.2. 5.2.1. Investments A description, (including the amount) of the issuer's principal investments for each financial year for the period covered by the historical financial information up to the date of the prospectus; A description of the issuers principal investments that are currently in progress, including the distribution of these investments geographically (home and abroad) and the method of financing (internal or external); Information concerning the issuer's principal future investments on which its management bodies have already made firm commitments. BUSINESS OVERVIEW Principal Activities A description of, and key factors relating to, the nature of the issuer's operations and its principal activities, stating the main categories of products sold and/or services performed for each financial year for the period covered by the historical financial information. An indication of any significant new products and/or services that have been introduced and, to the extent the development of new products or services has been publicly disclosed, give the status of development. Principal Markets A description of the principal markets in which the issuer competes, including a breakdown of total revenues by category of activity and geographic market for each financial year for the period covered by the historical financial information. 6.3. 6.4. Where the information given pursuant to items 6.1 and 6.2 has been influenced by exceptional factors, mention that fact. If material to the issuer's business or profitability, disclose summary information regarding the extent to which the issuer is dependent, on patents or licences, industrial, commercial or financial contracts or new manufacturing processes. The basis for any statements made by the issuer regarding its competitive position. ORGANISATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and the issuer's position within the group. A list of the issuer's significant subsidiaries, including name, country of incorporation or residence, proportion of ownership interest and, if different, proportion of voting power held. PROPERTY, PLANTS AND EQUIPMENT Information regarding any existing or planned material tangible fixed assets, including leased properties, and any major encumbrances thereon. A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets. OPERATING AND FINANCIAL REVIEW Financial condition To the extent not covered elsewhere in the prospectus, provide a description of the issuers financial condition, changes in financial condition and results of operations for each year and interim period, for which historical financial information is required, including the causes of material changes from year to year in the financial information to the extent necessary for an understanding of the issuers business as a whole. 9.2. 9.2.1. Operating results Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuer's income from operations, indicating the extent to which income was so affected.
5.2.2.
5.2.3. 6. 6.1. 6.1.1.
6.1.2.
6.2.
6.5. 7. 7.1. 7.2.
8. 8.1.
8.2. 9. 9.1.
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9.2.2. Where the financial statements disclose material changes in net sales or revenues, provide a narrative discussion of the reasons for such changes. Information regarding any governmental, economic, fiscal, monetary or political policies or factors that have materially affected, or could materially affect, directly or indirectly, the issuer's operations. CAPITAL RESOURCES Information concerning the issuers capital resources (both short and long term). An explanation of the sources and amounts of and a narrative description of the issuer's cash flows. Information on the borrowing requirements and funding structure of the issuer. Information regarding any restrictions on the use of capital resources that have materially affected, or could materially affect, directly or indirectly, the issuers operations. Information regarding the anticipated sources of funds needed to fulfil commitments referred to in items 5.2.3 and 8.1. RESEARCH LICENCES AND DEVELOPMENT, PATENTS AND
9.2.3.
10. 10.1. 10.2. 10.3. 10.4.
10.5. 11.
Where material, provide a description of the issuer's research and development policies for each financial year for the period covered by the historical financial information, including the amount spent on issuer-sponsored research and development activities. 12. 12.1. TREND INFORMATION The most significant recent trends in production, sales and inventory, and costs and selling prices since the end of the last financial year to the date of the prospectus. Information on any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the issuer's prospects for at least the current financial year. PROFIT FORECASTS OR ESTIMATES If an issuer chooses to include a profit forecast or a profit estimate the prospectus must contain the information items 13.1 and 13.2. 13.1. A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate. There must be a clear distinction between assumptions about factors which the members of the administrative, management or supervisory bodies can influence and assumptions about factors which are exclusively outside the influence of the members of the administrative, management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast. 13.2. A report prepared by independent accountants or auditors stating that in the opinion of the independent accountants or auditors the forecast or estimate has been properly compiled on the basis stated and that the basis of accounting used for the profit forecast or estimate is consistent with the accounting policies of the issuer. The profit forecast or estimate prepared on a basis comparable with the historical financial information. If the issuer has published a profit forecast in a prospectus which is still outstanding, provide a statement setting out whether or not that forecast is still correct as at the time of the prospectus, and an explanation of why such forecast is no longer valid if that is the case. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them
12.2.
13.
13.3. 13.4.
14. 14.1.
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outside that issuer where these are significant with respect to that issuer: (a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital; (c) founders, if the issuer has been established for fewer than five years; (d) any senior manager who is relevant to establishing that the issuer has the appropriate expertise and experience for the management of the issuer's business. The nature of any family relationship between any of those persons. In the case of each member of the administrative, management or supervisory bodies of the issuer and person described in points (b) and (d) of the first subparagraph, details of that persons relevant management expertise and experience and the following information: (a) the names of all companies and partnerships of which such person has been a member of the administrative, management or supervisory bodies or partner at any time in the previous five years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all the subsidiaries of an issuer of which the person is also a member of the administrative, management or supervisory bodies; (b) any convictions in relation to fraudulent offences for at least the previous five years; (c) details of any bankruptcies, receiverships or liquidations with which a person described in points (a) and (d) of the first subparagraph who was acting in the capacity of any of the positions set out in points (a) and (d) of the first subparagraph member of the administrative, management or supervisory bodies was associated for at least the previous five years; (d) details of any official public incrimination and/or sanctions of such person by statutory or regulatory authorities (including designated professional bodies) and whether such person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years. If there is no such information to be disclosed, a statement to that effect must be made. 14.2. Administrative, Management, and Supervisory bodies' and Senior Management conflicts of interests Potential conflicts of interests between any duties to the issuer of the persons referred to in the first subparagraph of item 14.1 and their private interests and or other duties must be clearly stated. In the event that there are no such conflicts, make a statement to that effect. Any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to in the first subparagraph of item 14.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management. 15. REMUNERATION AND BENEFITS In relation to the last full financial year for those persons referred to in points (a) and (d) of the first subparagraph of item 14.1: 15.1. The amount of remuneration paid (including any contingent or deferred compensation), and benefits in kind granted, to such persons by the issuer and its subsidiaries for services in all capacities to the issuer and its subsidiaries by any person. This information must be provided on an individual basis unless individual disclosure is not required in the issuers home country and is not otherwise publicly disclosed by the issuer.
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15.2. 16. The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension, retirement or similar benefits. BOARD PRACTICES In relation to the issuer's last completed financial year, and unless otherwise specified, with respect to those persons referred to in point (a) of the first subparagraph of item 14.1: 16.1. 16.2. Date of expiration of the current term of office, if applicable, and the period during which the person has served in that office. Information about members of the administrative, management or supervisory bodies' service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement. Information about the issuer's audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committee operates. A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect together with an explanation regarding why the issuer does not comply with such regime. EMPLOYEES Either the number of employees at the end of the period or the average for each financial year for the period covered by the historical financial information up to the date of the prospectus (and changes in such numbers, if material) and, if possible and material, a breakdown of persons employed by main category of activity and geographic location. If the issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees on average during the most recent financial year. Shareholdings and stock options With respect to each person referred to in points (a) and (b) of the first subparagraph of item 14.1, provide information as to their share ownership and any options over such shares in the issuer as of the most recent practicable date. 17.3. 18. 18.1. Description of any arrangements for involving the employees in the capital of the issuer. MAJOR SHAREHOLDERS In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest notifiable under the issuer's national law in the issuers capital or voting rights, together with the amount of each such persons interest or, if there are no such persons, an appropriate negative statement. Whether the issuer's major shareholders have different voting rights, or an appropriate negative statement. To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom and describe the nature of such control and describe the measures in place to ensure that such control is not abused. A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer. RELATED PARTY TRANSACTIONS Details of related party transactions (which for these purposes are those set out in the Standards adopted according to Regulation (EC) No 1606/2002), that the issuer has entered into during the period covered by the historical financial information and up to the date of the prospectus must be disclosed in accordance with the respective standard adopted according to Regulation (EC) No 1606/2002 if applicable.
16.3.
16.4.
17. 17.1.
17.2.
18.2. 18.3.
18.4.
19.
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If such standards do not apply to the issuer the following information must be disclosed: (a) the nature and extent of any transactions which are - as a single transaction or in their entirety - material to the issuer. Where such related party transactions are not concluded at arm's length provide an explanation of why these transactions were not concluded at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding; (b) the amount or the percentage to which related party transactions form part of the turnover of the issuer. 20. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical financial information Audited historical financial information covering the latest 3 financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 36 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements. The last two years audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the issuer has been operating in its current sphere of economic activity for less than one year, the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners; (d) the cash flow statement; (e) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the prospectus, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard.
20.1.
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20.1a This paragraph may be used only for issues of depository receipts having a denomination per unit of at least EUR 50 000. Audited historical financial information covering the latest three financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 36 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. Otherwise, the following information must be included in the prospectus: (a) a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and that there may be material differences in the financial information had Regulation (EC) No 1606/2002 been applied to the historical financial information; (b) immediately following the historical financial information a narrative description of the differences between the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles adopted by the issuer in preparing its annual financial statements. The last two years audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners; (d) the cash flow statement; (e) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the prospectus, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. Otherwise, the following information must be included in the prospectus: (a) a prominent statement disclosing which auditing standards have been applied; (b) an explanation of any significant departures from international standards on auditing. 20.2. Financial statements If the issuer prepares both own and consolidated annual financial statements, include at least the consolidated annual financial statements in the prospectus.
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20.3. 20.3.1. Auditing of historical annual financial information A statement that the historical financial information has been audited. If audit reports on the historical financial information have been refused by the statutory auditors or if they contain qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given. Indication of other information in the prospectus which has been audited by the auditors. Where financial data in the prospectus is not extracted from the issuer's audited financial statements state the source of the data and state that the data is unaudited. Age of latest financial information The last year of audited financial information may not be older than: (a) 18 months from the date of the prospectus if the issuer includes audited interim financial statements in the prospectus; (b) 15 months from the date of the prospectus if the issuer includes unaudited interim financial statements in the prospectus. 20.5. 20.5.1. Interim and other financial information If the issuer has published quarterly or half yearly financial information since the date of its last audited financial statements, these must be included in the prospectus. If the quarterly or half yearly financial information has been reviewed or audited the audit or review report must also be included. If the quarterly or half yearly financial information is unaudited or has not been reviewed, state that fact. If the prospectus is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, which may be unaudited (in which case that fact shall be stated) covering at least the first six months of the financial year. The interim financial information must include comparative statements for the same period in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet. 20.6. Dividend policy A description of the issuers policy on dividend distributions and any restrictions thereon. 20.6.1. The amount of the dividend per share for each financial year for the period covered by the historical financial information adjusted, where the number of shares in the issuer has changed, to make it comparable. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past significant effects on the issuer and/or group's financial position or profitability, or provide an appropriate negative statement. 20.8. Significant change in the issuers financial or trading position A description of any significant change in the financial or trading position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate negative statement. 21. 21.1. ADDITIONAL INFORMATION Share capital The following information as of the date of the most recent balance sheet included in the historical financial information: 21.1.1. The amount of issued capital, and for each class of share capital: (a) the number of shares authorised;
20.3.2. 20.3.3.
20.4. 20.4.1.
20.5.2.
20.7.
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(b) the number of shares issued and fully paid and issued but not fully paid; (c) the par value per share, or that the shares have no par value; (d) a reconciliation of the number of shares outstanding at the beginning and end of the year. If more than 10 % of capital has been paid for with assets other than cash within the period covered by the historical financial information, state that fact. 21.1.2. 21.1.3. 21.1.4. If there are shares not representing capital, state the number and main characteristics of such shares. The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer. The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription. Information about and terms of any acquisition rights and or obligations over authorised but unissued capital or an undertaking to increase the capital. Information about any capital of any member of the group which is under option or agreed conditionally or unconditionally to be put under option and details of such options including those persons to whom such options relate. A history of share capital, highlighting information about any changes, for the period covered by the historical financial information. Memorandum and Articles of Association A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association. A summary of any provisions of the issuer's articles of association, statutes or charter and bylaws with respect to the members of the administrative, management and supervisory bodies. A description of the rights, preferences and restrictions attaching to each class of the existing shares. A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law. A description of the conditions governing the manner in which annual general meetings and extraordinary general meetings of shareholders are called including the conditions of admission. A brief description of any provision of the issuer's articles of association, statutes, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the issuer. An indication of the articles of association, statutes, charter or bylaws provisions, if any, governing the ownership threshold above which shareholder ownership must be disclosed. A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaws governing changes in the capital, where such conditions are more stringent than is required by law. MATERIAL CONTRACTS A summary of each material contract, other than contracts entered into in the ordinary course of business, to which the issuer or any member of the group is a party, for the two years immediately preceding publication of the prospectus. A summary of any other contract (not being a contract entered into in the ordinary course of business) entered into by any member of the group which contains any provision under which any member of the group has any obligation or entitlement which is material to the group as at the date of the prospectus.
21.1.5.
21.1.6.
21.1.7. 21.2. 21.2.1. 21.2.2.
21.2.3. 21.2.4.
21.2.5.
21.2.6.
21.2.7.
21.2.8.
22.
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23. 23.1. THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST Where a statement or report attributed to a person as an expert is included in the prospectus provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the prospectus. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information. DOCUMENTS ON DISPLAY A statement that for the life of the prospectus the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuers request any part of which is included or referred to in the prospectus; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information for the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the prospectus. An indication of where the documents on display may be inspected, by physical or electronic means. 25. 25.1. INFORMATION ON HOLDINGS Information relating to the undertakings in which the issuer holds a proportion of the capital likely to have a significant effect on the assessment of its own assets and liabilities, financial position or profits and losses. INFORMATION ABOUT THE ISSUER OF THE DEPOSITORY RECEIPTS Name, registered office and principal administrative establishment if different from the registered office. Date of incorporation and length of life of the issuer, except where indefinite. Legislation under which the issuer operates and legal form which it has adopted under that legislation. INFORMATION ABOUT THE UNDERLYING SHARES A description of the type and the class of the underlying shares, including the ISIN (International Security Identification Number) or other such security identification code. Legislation under which the underlying shares have been created. An indication whether the underlying shares are in registered form or bearer form and whether the underlying shares are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records. Currency of the underlying shares. A description of the rights, including any limitations of these, attached to the underlying shares and procedure for the exercise of said rights. Dividend rights: (a) fixed date(s) on which the entitlement arises; (b) time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates;
23.2.
24.
26. 26.1. 26.2. 26.3. 27. 27.1.
27.2. 27.3.
27.4. 27.5. 27.6.
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(c) dividend restrictions and procedures for non-resident holders; (d) rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments. 27.7. Voting rights Pre-emption rights in offers for subscription of securities of the same class Right to share in the issuers profits Rights to share in any surplus in the event of liquidation Redemption provisions Conversion provisions. 27.8. The issue date of the underlying shares if new underlying shares are being created for the issue of the depository receipts and they are not in existence at the time of issue of the depository receipts. If new underlying shares are being created for the issue of the depository receipts, state the resolutions, authorisations and approvals by virtue of which the new underlying shares have been or will be created and/or issued. A description of any restrictions on the free transferability of the underlying shares. In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought: (a) information on taxes on the income from the underlying shares withheld at source; (b) indication as to whether the issuer assumes responsibility for the withholding of taxes at the source. 27.12. 27.13. An indication of the existence of any mandatory takeover bids and/or squeeze-out and sell-out rules in relation to the underlying shares. An indication of public takeover bids by third parties in respect of the issuers equity, which have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated. Lock up agreements: the parties involved, content and exceptions of the agreement, indication of the period of the lock up. 27.15. Information about selling share holders if any
27.9.
27.10. 27.11.
27.14.
27.15.1. Name and business address of the person or entity offering to sell the underlying shares, the nature of any position office or other material relationship that the selling persons has had within the past three years with the issuer of the underlying shares or any of its predecessors or affiliates. 27.16. Dilution
27.16.1. Amount and percentage of immediate dilution resulting from the offer of the depository receipts. 27.16.2. In the case of a subscription offer of the depository receipts to existing shareholders, disclose the amount and percentage of immediate dilutions if they do not subscribe to the offer of depository receipts. 27.17. Additional information where there is a simultaneous or almost simultaneous offer or admission to trading of the same class of underlying shares as those underlying shares over which the depository receipts are being issued.
27.17.1. If simultaneously or almost simultaneously with the creation of the depository receipts for which admission to a regulated market is being sought underlying shares of the same class as those over which the depository receipts are being issued are subscribed for or
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placed privately, details are to be given of the nature of such operations and of the number and characteristics of the underlying shares to which they relate. 27.17.2. Disclose all regulated markets or equivalent markets on which, to the knowledge of the issuer of the depository receipts, underlying shares of the same class of those over which the depository receipts are being issued are offered or admitted to trading. 27.17.3. To the extent known to the issuer of the depository receipts, indicate whether major shareholders, members of the administrative, management or supervisory bodies intended to subscribe in the offer, or whether any person intends to subscribe for more than five per cent of the offer. 28. 28.1. 28.2. 28.3. INFORMATION REGARDING THE DEPOSITORY RECEIPTS A description of the type and class of depository receipts being offered and/or admitted to trading. Legislation under which the depository receipts have been created. An indication whether the depository receipts are in registered or bearer form and whether the depository receipts are in certificated or bookentry form. In the latter case, include the name and address of the entity in charge of keeping the records. Currency of the depository receipts. Describe the rights attaching to the depository receipts, including any limitations of these attached to the depository receipts and the procedure if any for the exercise of these rights. If the dividend rights attaching to depository receipts are different from the dividend rights disclosed in relation to the underlying disclose the following about the dividend rights: (a) fixed date(s) on which the entitlement arises; (b) time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates; (c) dividend restrictions and procedures for non-resident holders; (d) rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments. 28.7. If the voting rights attaching to the depository receipts are different from the voting rights disclosed in relation to the underlying shares disclose the following about those rights: Voting rights. Pre-emption rights in offers for subscription of securities of the same class. Right to share in the issuers profits. Rights to share in any surplus in the event of liquidation. Redemption provisions. Conversion provisions. 28.8. Describe the exercise of and benefit from the rights attaching to the underlying shares, in particular voting rights, the conditions on which the issuer of the depository receipts may exercise such rights, and measures envisaged to obtain the instructions of the depository receipt holders - and the right to share in profits and any liquidation surplus which are not passed on to the holder of the depository receipt. The expected issue date of the depository receipts. A description of any restrictions on the free transferability of the depository receipts. In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought: (a) information on taxes on the income from the depository receipts withheld at source;
28.4. 28.5.
28.6.
28.9. 28.10. 28.11.
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(b) indication as to whether the issuer assumes responsibility for the withholding of taxes at the source. 28.12. 28.13. 29. 29.1. 29.1.1. Bank or other guarantees attached to the depository receipts and intended to underwrite the issuer's obligations. Possibility of obtaining the delivery of the depository receipts into original shares and procedure for such delivery. INFORMATION ABOUT THE TERMS AND CONDITIONS OF THE OFFER OF THE DEPOSITORY RECEIPTS Conditions, offer statistics, expected timetable and action required to apply for the offer Total amount of the issue/offer, distinguishing the securities offered for sale and those offered for subscription; if the amount is not fixed, description of the arrangements and time for announcing to the public the definitive amount of the offer. The time period, including any possible amendments, during which the offer will be open and description of the application process. An indication of when, and under what circumstances, the offer may be revoked or suspended and whether revocation can occur after dealing has begun. A description of the possibility to reduce subscriptions and the manner for refunding excess amount paid by applicants. Details of the minimum and/or maximum amount of application (whether in number of securities or aggregate amount to invest). An indication of the period during which an application may be withdrawn, provided that investors are allowed to withdraw their subscription. Method and time limits for paying up the securities and for delivery of the securities. A full description of the manner and date in which results of the offer are to be made public. The procedure for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised. Plan of distribution and allotment The various categories of potential investors to which the securities are offered. If the offer is being made simultaneously in the markets of two or more countries and if a tranche has been or is being reserved for certain of these, indicate any such tranche. To the extent known to the issuer, indicate whether major shareholders or members of the issuer's management, supervisory or administrative bodies intended to subscribe in the offer, or whether any person intends to subscribe for more than five per cent of the offer. Pre-allotment Disclosure:
29.1.2. 29.1.3.
29.1.4. 29.1.5. 29.1.6.
29.1.7. 29.1.8. 29.1.9.
29.2. 29.2.1.
29.2.2.
29.2.3.
29.2.3.1. The division into tranches of the offer including the institutional, retail and issuers employee tranches and any other tranches. 29.2.3.2. The conditions under which the claw-back may be used, the maximum size of such claw back and any applicable minimum percentages for individual tranches. 29.2.3.3. The allotment method or methods to be used for the retail and issuers employee tranche in the event of an over-subscription of these tranches. 29.2.3.4. A description of any pre-determined preferential treatment to be accorded to certain classes of investors or certain affinity groups (including friends and family programmes) in the allotment, the percentage of the offer reserved for such preferential treatment and the criteria for inclusion in such classes or groups. 29.2.3.5. Whether the treatment of subscriptions or bids to subscribe in the allotment may be determined on the basis of which firm they are made through or by.
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29.2.3.6. A target minimum individual allotment if any within the retail tranche. 29.2.3.7. The conditions for the closing of the offer as well as the date on which the offer may be closed at the earliest; 29.2.3.8. Whether or not multiple subscriptions are admitted, and where they are not, how any multiple subscriptions will be handled. 29.2.3.9. Process for notification to applicants of the amount allotted and indication whether dealing may begin before notification is made. 29.2.4. Over-allotment and green shoe:
29.2.4.1. The existence and size of any over-allotment facility and/or green shoe. 29.2.4.2. The existence period of the over-allotment facility and/or green shoe. 29.2.4.3. Any conditions for the use of the over-allotment facility or exercise of the green shoe. 29.3. 29.3.1. Pricing An indication of the price at which the securities will be offered. When the price is not known or when there is not an established and/or liquid market for the securities, indicate the method for determination of the offer price, including who has set the criteria or is formally responsible for its determination. Indication of the amount of any expenses and taxes specifically charged to the subscriber or purchaser. Process for the disclosure of the offer price. Where there is or could be a material disparity between the public offer price and the effective cash cost to members of the administrative, management or supervisory bodies or senior management, or affiliated persons, of securities acquired by them in transactions during the past year, or which they have the right to acquire, include a comparison of the public contribution in the proposed public offer and the effective cash contributions of such persons. Placing and underwriting Name and address of the co-coordinator(s) of the global offer and of single parts of the offer and, to the extend known to the issuer, of the placers in the various countries where the offer takes place. Name and address of any paying agents and depository agents in each country. Name and address of the entities agreeing to underwrite the issue on a firm commitment basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the agreements, including the quotas. Where not all of the issue is underwritten, a statement of the portion not covered. Indication of the overall amount of the underwriting commission and of the placing commission. When the underwriting agreement has been or will be reached. ADMISSION TO TRADING AND DEALING ARRANGEMENTS IN THE DEPOSITORY RECEIPTS An indication as to whether the securities offered are or will be the object of an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with indication of the markets in question. This circumstance must be mentioned, without creating the impression that the admission to trading necessarily will be approved. If known, the earliest dates on which the securities will be admitted to trading must be given. All the regulated markets or equivalent markets on which, to the knowledge of the issuer, securities of the same class of the securities to be offered or admitted to trading are already admitted to trading. If simultaneously or almost simultaneously with the creation of the securities for which admission to a regulated market is being sought securities of the same class are subscribed for or placed privately or if securities of other classes are created for public or private placing,
29.3.2. 29.3.3.
29.4. 29.4.1.
29.4.2. 29.4.3.
29.4.4. 30. 30.1.
30.2.
30.3.
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details must be given of the nature of such operations and of the number and characteristics of the securities to which they relate. 30.4. Name and address of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment. Stabilisation: where an issuer or a selling shareholder has granted an over-allotment option or it is otherwise proposed that price stabilising activities may be entered into in connection with an offer: The fact that stabilisation may be undertaken, that there is no assurance that it will be undertaken and that it may be stopped at any time. The beginning and the end of the period during which stabilisation may occur. The identity of the stabilisation manager for each relevant jurisdiction unless this is not known at the time of publication. The fact that stabilisation transactions may result in a market price that is higher than would otherwise prevail. KEY INFORMATION ABOUT DEPOSITORY RECEIPTS THE ISSUE OF THE
30.5.
30.6. 30.7. 30.8. 30.9. 31. 31.1. 31.1.1.
Reasons for the offer and use of proceeds Reasons for the offer and, where applicable, the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses. If the issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed uses, state the amount and sources of other funds needed. Details must be given with regard to the use of the proceeds, in particular when they are being used to acquire assets, other than in the ordinary course of business, to finance announced acquisitions of other business, or to discharge, reduce or retire indebtedness. Interest of natural and legal persons involved in the issue/offer A description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. Risk factors Prominent disclosure of risk factors that are material to the securities being offered and/or admitted to trading in order to assess the market risk associated with these securities in a section headed Risk factors. EXPENSE OF THE ISSUE/OFFER OF THE DEPOSITORY RECEIPTS The total net proceeds and an estimate of the total expenses of the issue/offer.
31.2. 31.2.1.
31.3. 31.3.1.
32. 32.1.
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ANNEX XI Minimum Disclosure Requirements for the Banks Registration Document (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. STATUTORY AUDITORS Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body). If auditors have resigned, been removed or not been reappointed during the period covered by the historical financial information, details if material. RISK FACTORS Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations under the securities to investors in a section headed Risk factors. INFORMATION ABOUT THE ISSUER History and development of the Issuer the legal and commercial name of the issuer; the place of registration of the issuer and its registration number; the date of incorporation and the length of life of the issuer, except where indefinite; the domicile and legal form of the issuer, the legislation under which the issuer operates, its country of incorporation, and the address and telephone number of its registered office (or principal place of business if different from its registered office); any recent events particular to the issuer which are to a material extent relevant to the evaluation of the issuers solvency. BUSINESS OVERVIEW Principal activities: A brief description of the issuers principal activities stating the main categories of products sold and/or services performed; An indication of any significant new products and/or activities. Principal markets A brief description of the principal markets in which the issuer competes. 5.1.4. The basis for any statements in the registration document made by the issuer regarding its competitive position.
1.2.
2. 2.1.
2.2.
3. 3.1.
4. 4.1. 4.1.1. 4.1.2. 4.1.3. 4.1.4.
4.1.5. 5. 5.1. 5.1.1. 5.1.2. 5.1.3.
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6. 6.1. 6.2. 7. 7.1. ORGANISATIONAL STRUCTURE If the issuer is part of a group, a brief description of the group and of the issuer's position within it. If the issuer is dependent upon other entities within the group, this must be clearly stated together with an explanation of this dependence. TREND INFORMATION Include a statement that there has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements. In the event that the issuer is unable to make such a statement, provide details of this material adverse change. 7.2. Information on any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the issuer's prospects for at least the current financial year. PROFIT FORECASTS OR ESTIMATES If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information items 8.1 and 8.2. 8.1. A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate. There must be a clear distinction between assumptions about factors which the members of the administrative, management or supervisory bodies can influence and assumptions about factors which are exclusively outside the influence of the members of the administrative, management or supervisory bodies; be readily understandable by investors; be specific and precise; and not relate to the general accuracy of the estimates underlying the forecast. 8.2. A report prepared by independent accountants or auditors stating that in the opinion of the independent accountants or auditors the forecast or estimate has been properly compiled on the basis stated and that the basis of accounting used for the profit forecast or estimate is consistent with the accounting policies of the issuer. The profit forecast or estimate must be prepared on a basis comparable with the historical financial information. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer: (a) members of the administrative, management or supervisory bodies; (b) partners with unlimited liability, in the case of a limited partnership with a share capital. 9.2. Administrative, Management, and Supervisory bodies conflicts of interests Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 9.1 and their private interests and or other duties must be clearly stated. In the event that there are no such conflicts, make a statement to that effect. 10. 10.1. MAJOR SHAREHOLDERS To the extent known to the issuer, state whether the issuer is directly or indirectly owned or controlled and by whom, and describe the nature of such control, and describe the measures in place to ensure that such control is not abused. A description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in control of the issuer.
8.
8.3. 9. 9.1.
10.2.
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11. FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES Historical Financial Information Audited historical financial information covering the latest two financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 24 months, or the entire period for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements. The most recent year's audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements. If the issuer has been operating in its current sphere of economic activity for less than one year, the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited. If the audited financial information is prepared according to national accounting standards, the financial information required under this heading must include at least the following: (a) the balance sheet; (b) the income statement; (c) in the case of an admission of securities to trading on a regulated market only, a cash flow statement; (d) the accounting policies and explanatory notes. The historical annual financial information must be independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard. 11.2. Financial statements If the issuer prepares both own and consolidated financial statements, include at least the consolidated financial statements in the registration document. 11.3. 11.3.1. Auditing of historical annual financial information A statement that the historical financial information has been audited. If audit reports on the historical financial information have been refused by the statutory auditors or if they contain qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given. An indication of other information in the registration document which has been audited by the auditors.
11.1.
11.3.2.
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11.3.3. Where financial data in the registration document is not extracted from the issuer's audited financial statements state the source of the data and state that the data is un-audited. Age of latest financial information The last year of audited financial information may not be older than 18 months from the date of the registration document. Interim and other financial information If the issuer has published quarterly or half yearly financial information since the date of its last audited financial statements, these must be included in the registration document. If the quarterly or half yearly financial information has been reviewed or audited the audit or review report must also be included. If the quarterly or half yearly financial information is unaudited or has not been reviewed state that fact. If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, covering at least the first six months of the financial year. If the interim financial information is un-audited state that fact. The interim financial information must include comparative statements for the same period in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet. 11.6. Legal and arbitration proceedings Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the issuer and/or group's financial position or profitability, or provide an appropriate negative statement. 11.7. Significant change in the issuers financial position A description of any significant change in the financial position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or an appropriate negative statement. 12. MATERIAL CONTRACTS A brief summary of all material contracts that are not entered into in the ordinary course of the issuer's business, which could result in any group member being under an obligation or entitlement that is material to the issuers ability to meet its obligation to security holders in respect of the securities being issued. 13. 13.1. THIRD PARTY INFORMATION AND STATEMENT EXPERTS AND DECLARATIONS OF ANY INTEREST BY
11.4. 11.4.1. 11.5. 11.5.1
11.5.2.
Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the registration document. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading In addition, the issuer shall identify the source(s) of the information. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the
13.2.
14.
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issuer's request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
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ANNEX XII Minimum Disclosure Requirements for the Securities Note for derivative securities (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the prospectus and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that are material to the securities being offered and/or admitted to trading in order to assess the market risk associated with these securities in a section headed risk factors. This must include a risk warning to the effect that investors may lose the value of their entire investment or part of it, as the case may be, and/or, if the investors liability is not limited to the value of his investment, a statement of that fact, together with a description of the circumstances in which such additional liability arises and the likely financial effect. 3. 3.1. KEY INFORMATION Interest of natural and legal persons involved in the issue/offer A description of any interest, including conflicting ones that is material to the issue/offer, detailing the persons involved and the nature of the interest. 3.2. Reasons for the offer and use of proceeds when different from making profit and/or hedging certain risks If reasons for the offer and use of proceeds are disclosed provide the total net proceeds and an estimate of the total expenses of the issue/ offer. 4. 4.1. 4.1.1. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING Information concerning the securities A description of the type and the class of the securities being offered and/or admitted to trading, including the ISIN (International Security Identification Number) or other such security identification code. A clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of the underlying instrument (s), especially under the circumstances when the risks are most evident unless the securities have a denomination per unit of at least EUR 50 000 or can only be acquired for at least EUR 50 000 per security. Legislation under which the securities have been created. An indication whether the securities are in registered form or bearer form and whether the securities are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records. Currency of the securities issue.
1.2.
2.
4.1.2.
4.1.3. 4.1.4.
4.1.5.
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4.1.6. Ranking of the securities being offered and/or admitted to trading, including summaries of any clauses that are intended to affect ranking or subordinate the security to any present or future liabilities of the issuer. A description of the rights, including any limitations of these, attached to the securities and procedure for the exercise of said rights. In the case of new issues, a statement of the resolutions, authorisations and approvals by virtue of which the securities have been or will be created and/or issued. The issue date of the securities. A description of any restrictions on the free transferability of the securities. The expiration or maturity date of the derivative securities. The exercise date or final reference date. 4.1.12. 4.1.13. 4.1.14. A description of the settlement procedure of the derivative securities. A description of how any return on derivative securities takes place, the payment or delivery date, and the way it is calculated. In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought: (a) information on taxes on the income from the securities withheld at source; (b) indication as to whether the issuer assumes responsibility for the withholding of taxes at the source. 4.2. 4.2.1. 4.2.2. Information concerning the underlying The exercise price or the final reference price of the underlying. A statement setting out the type of the underlying and details of where information on the underlying can be obtained: an indication where information about the past and the further performance of the underlying and its volatility can be obtained, where the underlying is a security, the name of the issuer of the security, the ISIN (international security identification number) or other such security identification code, where the underlying is an index, the name of the index and a description of the index if it is composed by the issuer. If the index is not composed by the issuer, where information about the index can be obtained, where the underlying is an interest rate, a description of the interest rate, others: Where the underlying does not fall within the categories specified above the securities note shall contain equivalent information. where the underlying is a basket of underlyings, disclosure of the relevant weightings of each underlying in the basket. 4.2.3. 4.2.4. A description of any market disruption or settlement disruption events that affect the underlying. Adjustment rules with relation to events concerning the underlying.
4.1.7. 4.1.8.
4.1.9. 4.1.10. 4.1.11.
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5. 5.1. 5.1.1. 5.1.2. TERMS AND CONDITIONS OF THE OFFER Conditions, offer statistics, expected timetable and action required to apply for the offer Conditions to which the offer is subject. Total amount of the issue/offer; if the amount is not fixed, description of the arrangements and time for announcing to the public the amount of the offer. The time period, including any possible amendments, during which the offer will be open and description of the application process. Details of the minimum and/or maximum amount of application, (whether in number of securities or aggregate amount to invest). Method and time limits for paying up the securities and for delivery of the securities. A full description of the manner and date in which results of the offer are to be made public. Plan of distribution and allotment The various categories of potential investors to which the securities are offered. If the offer is being made simultaneously in the markets of two or more countries and if a tranche has been or is being reserved for certain of these, indicate any such tranche. Process for notification to applicants of the amount allotted and indication whether dealing may begin before notification is made. Pricing Indication of the expected price at which the securities will be offered or the method of determining the price and the process for its disclosure. Indicate the amount of any expenses and taxes specifically charged to the subscriber or purchaser. 5.4. 5.4.1. Placing and underwriting Name and address of the coordinator(s) of the global offer and of single parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place. Name and address of any paying agents and depository agents in each country. Entities agreeing to underwrite the issue on a firm commitment basis, and entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Where not all of the issue is underwritten, a statement of the portion not covered. When the underwriting agreement has been or will be reached. Name and address of a calculation agent. ADMISSION TO TRADING AND DEALING ARRANGEMENTS An indication as to whether the securities offered are or will be the object of an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with indication of the markets in question. This circumstance shall be mentioned, without creating the impression that the admission to trading necessarily will be approved. If known, the earliest dates on which the securities will be admitted to trading shall be given. All the regulated markets or equivalent markets on which, to the knowledge of the issuer, securities of the same class of the securities to be offered or admitted to trading are already admitted to trading. Name and address of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment. ADDITIONAL INFORMATION If advisors connected with an issue are mentioned in the Securities Note, a statement of the capacity in which the advisors have acted.
5.1.3. 5.1.4. 5.1.5. 5.1.6. 5.2. 5.2.1.
5.2.2. 5.3.
5.4.2. 5.4.3.
5.4.4. 5.4.5. 6. 6.1.
6.2.
6.3.
7. 7.1.
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7.2. An indication of other information in the Securities Note which has been audited or reviewed by statutory auditors and where auditors have produced a report. Reproduction of the report or, with permission of the competent authority, a summary of the report. Where a statement or report attributed to a person as an expert is included in the Securities Note, provide such persons name, business address, qualifications and material interest, if any, in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information. An indication in the prospectus whether or not the issuer intends to provide post-issuance information. Where the issuer has indicated that it intends to report such information, the issuer shall specify in the prospectus what information will be reported and where such information can be obtained.
7.3.
7.4.
7.5.
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ANNEX XIII Minimum Disclosure Requirements for the Securities Note for debt securities with a denomination per unit of at least EUR 50 000 (Schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the prospectus and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In case of natural persons including members of the issuers administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the prospectus that the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that are material to the securities admitted to trading in order to assess the market risk associated with these securities in a section headed Risk factors. 3. KEY INFORMATION Interest of natural and legal persons involved in the issue A description of any interest, including conflicting ones, that is material to the issue, detailing the persons involved and the nature of the interest. 4. 4.1. 4.2. INFORMATION CONCERNING THE SECURITIES TO BE ADMITTED TO TRADING Total amount of securities being admitted to trading. A description of the type and the class of the securities being admitted to trading, including the ISIN (international security identification number) or other such security identification code. Legislation under which the securities have been created. An indication of whether the securities are in registered or bearer form and whether the securities are in certificated or book-entry form. In the latter case, name and address of the entity in charge of keeping the records. Currency of the securities issue. Ranking of the securities being admitted to trading, including summaries of any clauses that are intended to affect ranking or subordinate the security to any present or future liabilities of the issuer. A description of the rights, including any limitations of these, attached to the securities and procedure for the exercise of said rights. The nominal interest rate and provisions relating to interest payable: The date from which interest becomes payable and the due dates for interest. The time limit on the validity of claims to interest and repayment of principal. Where the rate is not fixed, description of the underlying on which it is based and of the method used to relate the two: A description of any market disruption or settlement disruption events that affect the underlying. Adjustment rules with relation to events concerning the underlying.
1.2.
2.
4.3. 4.4.
4.5. 4.6.
4.7. 4.8.
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Name of the calculation agent. 4.9. Maturity date and arrangements for the amortisation of the loan, including the repayment procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of the holder, it must be described, stipulating amortisation terms and conditions. An indication of yield. Representation of debt security holders including an identification of the organisation representing the investors and provisions applying to such representation. Indication of where investors may have access to the contracts relating to these forms of representation. A statement of the resolutions, authorisations and approvals by virtue of which the securities have been created and/or issued. The issue date of the securities. A description of any restrictions on the free transferability of the securities. ADMISSION TO TRADING AND DEALING ARRANGEMENTS Indication of the market where the securities will be traded and for which prospectus has been published. If known, give the earliest dates on which the securities will be admitted to trading. Name and address of any paying agents and depository agents in each country. EXPENSE OF THE ADMISSION TO TRADING An estimate of the total expenses related to the admission to trading. 7. 7.1. 7.2. ADDITIONAL INFORMATION If advisors are mentioned in the Securities Note, a statement of the capacity in which the advisors have acted. An indication of other information in the Securities Note which has been audited or reviewed by auditors and where auditors have produced a report. Reproduction of the report or, with permission of the competent authority, a summary of the report. Where a statement or report attributed to a person as an expert is included in the Securities Note, provide such persons name, business address, qualifications and material interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note. Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information. Credit ratings assigned to an issuer or its debt securities at the request or with the co-operation of the issuer in the rating process.
4.10. 4.11.
4.12. 4.13. 4.14. 5. 5.1.
5.2. 6.
7.3.
7.4.
7.5.
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ANNEX XIV Additional information building block on underlying share for some equity securities 1. 1.1. 1.2. 1.3. Description of the underlying share Describe the type and the class of the shares Legislation under which the shares have been or will be created Indication whether the securities are in registered form or bearer form and whether the securities are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records Indication of the currency of the shares issue A description of the rights, including any limitations of these, attached to the securities and procedure for the exercise of those rights: Dividend rights: fixed date(s) on which the entitlement arises, time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates, dividend restrictions and procedures for non resident holders, rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments. Voting rights. Pre-emption rights in offers for subscription of securities of the same class. Right to share in the issuers profits. Rights to share in any surplus in the event of liquidation. Redemption provisions. Conversion provisions. 1.6. In the case of new issues, a statement of the resolutions, authorisations and approvals by virtue of which the shares have been or will be created and/or issued and indication of the issue date. Where and when the shares will be or have been admitted to trading. Description of any restrictions on the free transferability of the shares. Indication of the existence of any mandatory takeover bids/or squeezeout and sell-out rules in relation to the shares. Indication of public takeover bids by third parties in respect of the issuers equity, which have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated. Impact on the issuer of the underlying share of the exercise of the right and potential dilution effect for the shareholders. When the issuer of the underlying is an entity belonging to the same group, the information to provide on this issuer is the one required by the share registration document schedule.
1.4. 1.5.
1.7. 1.8. 1.9. 1.10.
1.11. 2.
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ANNEX XV Minimum disclosure requirements for the registration document for securities issued by collective investment undertakings of the closed-end type (schedule) In addition to the information required in this schedule, the collective investment undertaking must provide the following information as required under paragraphs and items 1, 2, 3, 4, 5.1, 7, 9.1, 9.2.1, 9.2.3, 10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 in Annex I (minimum disclosure requirements for the share registration document schedule). 1. 1.1. Investment objective and policy A detailed description of the investment objective and policy which the collective investment undertaking will pursue and a description of how that investment objectives and policy may be varied including any circumstances in which such variation requires the approval of investors. A description of any techniques and instruments that may be used in the management of the collective investment undertaking. The borrowing and/or leverage limits of the collective investment undertaking. If there are no such limits, include a statement to that effect. The regulatory status of the collective investment undertaking together with the name of any regulator in its country of incorporation. The profile of a typical investor for whom the collective investment undertaking is designed. Investment Restrictions A statement of the investment restrictions which apply to the collective investment undertaking, if any, and an indication of how the holders of securities will be informed of the actions that the investment manager will take in the event of a breach. Where more than 20 % of the gross assets of any collective investment undertaking (except where items 2.3 or 2.5 apply) may be: (a) invested in, either directly or indirectly, or lent to any single underlying issuer (including the underlying issuers subsidiaries or affiliates); or (b) invested in one or more collective investment undertakings which may invest in excess of 20 % of its gross assets in other collective investment undertakings (open-end and/or closed-end type); or (c) exposed to the creditworthiness or solvency of any one counterparty (including its subsidiaries or affiliates); the following information must be disclosed: (i) information relating to each underlying issuer/collective investment undertaking/counterparty as if it were an issuer for the purposes of the minimum disclosure requirements for the share registration document schedule (in the case of (a)) or minimum disclosure requirements for the registration document schedule for securities issued by collective investment undertaking of the closed-end type (in the case of (b)) or the minimum disclosure requirements for the debt and derivative securities with an individual denomination per unit of at least EUR 50 000 registration document schedule (in the case of (c)); or (ii) if the securities issued by the underlying issuer/collective investment undertaking/counterparty have already been admitted to trading on a regulated or equivalent market or the obligations are guaranteed by an entity admitted to trading on a regulated or equivalent market, the name, address, country of incorporation, nature of business and name of the market in which its securities are admitted.
1.2.
1.3. 1.4. 2. 2.1.
2.2.
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This requirement shall not apply where the 20 % is exceeded due to appreciations or depreciations, changes in exchange rates, or by reason of the receipt of rights, bonuses, benefits in the nature of capital or by reason of any other action affecting every holder of that investment, provided the investment manager has regard to the threshold when considering changes in the investment portfolio. 2.3. Where a collective investment undertaking may invest in excess of 20 % of its gross assets in other collective investment undertakings (open ended and/or closed ended), a description of if and how risk is spread in relation to those investments. In addition, item 2.2 shall apply, in aggregate, to its underlying investments as if those investments had been made directly. With reference to point (c) of item 2.2, if collateral is advanced to cover that portion of the exposure to any one counterparty in excess of 20 % of the gross assets of the collective investment undertaking, details of such collateral arrangements. Where a collective investment undertaking may invest in excess of 40 % of its gross assets in another collective investment undertaking either of the following must be disclosed: (a) information relating to each underlying collective investment undertaking as if it were an issuer under minimum disclosure requirements for the registration document schedule for securities issued by collective investment undertaking of the closed-end type; (b) if securities issued by an underlying collective investment undertaking have already been admitted to trading on a regulated or equivalent market or the obligations are guaranteed by an entity admitted to trading on a regulated or equivalent market, the name, address, country of incorporation, nature of business and name of the market in which its securities are admitted. 2.6. Physical Commodities Where a collective investment undertaking invests directly in physical commodities a disclosure of that fact and the percentage that will be so invested. 2.7. Property Collective investment undertakings Where a collective investment undertaking is a property collective investment undertaking, disclosure of that fact, the percentage of the portfolio that is to be invested in the property, as well as a description of the property and any material costs relating to the acquisition and holding of such property. In addition, a valuation report relating to the properties must be included. Disclosure of item 4.1. applies to: (a) the valuation entity; (b) any other entity responsible for the administration of the property. 2.8. Derivatives Currencies Financial instruments/Money Market Instruments/
2.4.
2.5.
Where a collective investment undertaking invests in derivatives financial instruments, money market instruments or currencies other than for the purposes of efficient portfolio management (i.e. solely for the purpose of reducing, transferring or eliminating investment risk in the underlying investments of a collective investment undertaking, including any technique or instrument used to provide protection against exchange and credit risks), a statement whether those investments are used for hedging or for investment purposes, and a description of if and how risk is spread in relation to those investments. 2.9. Item 2.2 does not apply to investment in securities issued or guaranteed by a government, government agency or instrumentality of any Member State, its regional or local authorities, or OECD Member State. Point (a) of item 2.2 does not apply to a collective investment undertaking whose investment objective is to track, without material modification, that of a broadly based and recognised published index. A description of the composition of the index must be provided.
2.10.
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3. 3.1. The applicants service providers The actual or estimated maximum amount of all material fees payable directly or indirectly by the collective investment undertaking for any services under arrangements entered into on or prior to the date of the registration document and a description of how these fees are calculated. A description of any fee payable directly or indirectly by the collective investment undertaking which cannot be quantified under item 3.1 and which is or may be material. If any service provider to the collective investment undertaking is in receipt of any benefits from third parties (other than the collective investment undertaking) by virtue of providing any services to the collective investment undertaking, and those benefits may not accrue to the collective investment undertaking, a statement of that fact, the name of that third party, if available, and a description of the nature of the benefits. The name of the service provider which is responsible for the determination and calculation of the net asset value of the collective investment undertaking. A description of any material potential conflicts of interest which any of the service providers to the collective investment undertaking may have as between their duty to the collective investment undertaking and duties owed by them to third parties and their other interests. A description of any arrangements which are in place to address such potential conflicts. Investment Manager/Advisers In respect of any Investment Manager such information as is required to be disclosed under items 5.1.1 to 5.1.4 and, if material, under item 5.1.5 of Annex I together with a description of its regulatory status and experience. In respect of any entity providing investment advice in relation to the assets of the collective investment undertaking, the name and a brief description of such entity. Custody A full description of how the assets of the collective investment undertaking will be held and by whom and any fiduciary or similar relationship between the collective investment undertaking and any third party in relation to custody: Where a custodian, trustee, or other fiduciary is appointed: (a) such information as is required to be disclosed under items 5.1.1 to 5.1.4 and, if material, under item 5.1.5 of Annex I; (b) a description of the obligations of such party under the custody or similar agreement; (c) any delegated custody arrangements; (d) the regulatory status of such party and delegates. 5.2. Where any entity other than those entities mentioned in item 5.1, holds any assets of the collective investment undertaking, a description of how these assets are held together with a description of any additional risks. Valuation A description of how often, and the valuation principles and the method by which, the net asset value of the collective investment undertaking will be determined, distinguishing between categories of investments and a statement of how such net asset value will be communicated to investors. Details of all circumstances in which valuations may be suspended and a statement of how such suspension will be communicated or made available to investors.
3.2.
3.3.
3.4.
3.5.
4. 4.1.
4.2.
5. 5.1.
6. 6.1.
6.2.
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7. 7.1. Cross Liabilities In the case of an umbrella collective investment undertaking, a statement of any cross liability that may occur between classes or investments in other collective investment undertakings and any action taken to limit such liability. Financial Information Where, since the date of incorporation or establishment, a collective investment undertaking has not commenced operations and no financial statements have been made up as at the date of the registration document, a statement to that effect. Where a collective investment undertaking has commenced operations, the provisions of item 20 of Annex I on the Minimum Disclosure Requirements for the share registration document apply. 8.2. 8.3. A comprehensive and meaningful analysis of the collective investment undertakings portfolio (if un-audited, clearly marked as such). An indication of the most recent net asset value per security must be included in the securities note schedule (and, if un-audited, clearly marked as such).
8. 8.1.
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ANNEX XVI Minimum disclosure requirements for the registration document for securities issued by Member States, third countries and their regional and local authorities (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations under the securities to investors in a section headed Risk factors. 3. 3.1. 3.2. 3.3. 3.4. INFORMATION ABOUT THE ISSUER The legal name of the issuer and a brief description of the issuers position within the national governmental framework. The domicile or geographical location and legal form of the issuer and its contact address and telephone number. Any recent events relevant to the evaluation of the issuers solvency. A description of the issuers economy including: (a) the structure of the economy with details of the main sectors of the economy; (b) gross domestic product with a breakdown by the issuers economic sectors over for the previous two fiscal years. 3.5. 4. A general description of the issuers political system and government including details of the governing body of the issuer. PUBLIC FINANCE AND TRADE Information on the following for the two fiscal years prior to the date of the registration document: (a) the tax and budgetary systems; (b) gross public debt including a summary of the debt, the maturity structure of outstanding debt (particularly noting debt with a residual maturity of less than one year) and debt payment record, and of the parts of debt denominated in the domestic currency of the issuer and in foreign currencies; (c) foreign trade and balance of payment figures; (d) foreign exchange reserves including any potential encumbrances to such foreign exchange reserves as forward contracts or derivatives; (e) financial position and resources including liquid deposits available in domestic currency; (f) income and expenditure figures. Description of any auditing or independent review procedures on the accounts of the issuer.
1.2.
2.
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5. 5.1. SIGNIFICANT CHANGE Details of any significant changes to the information provided pursuant to item 4 which have occurred since the end of the last fiscal year, or an appropriate negative statement. LEGAL AND ARBITRATION PROCEEDINGS Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the issuer financial position, or provide an appropriate negative statement. 6.2. 7. Information on any immunity the issuer may have from legal proceedings. STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address and qualifications. If the report has been produced at the issuers request a statement to that effect, that such statement or report is included, in the form and context in which it is included, with the consent of that person, who has authorised the contents of that part of the registration document. To the extent known to the issuer, provide information in respect of any interest relating to such expert which may have an effect on the independence of the expert in the preparation of the report. 8. DOCUMENTS ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) financial and audit reports for the issuer covering the last two fiscal years and the budget for the current fiscal year; (b) all reports, letters, and other documents, valuations and statements prepared by any expert at the issuer's request any part of which is included or referred to in the registration document. An indication of where the documents on display may be inspected, by physical or electronic means.
6.
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ANNEX XVII Minimum disclosure requirements for the registration document for securities issued by public international bodies and for debt securities guaranteed by a Member State of the OECD (schedule) 1. 1.1. PERSONS RESPONSIBLE All persons responsible for the information given in the registration document and, as the case may be, for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office. A declaration by those responsible for the registration document, that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to materially affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. RISK FACTORS Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations under the securities to investors in a section headed Risk factors. 3. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 4. 4.1. INFORMATION ABOUT THE ISSUER The legal name of the issuer and a brief description of the issuers legal status. The location of the principal office and the legal form of the issuer and its contact address and telephone number. Details of the governing body of the issuer and a description of its governance arrangements, if any. A brief description of the issuers purpose and functions. The sources of funding, guarantees and other obligations owed to the issuer by its members. Any recent events relevant to the evaluation of the issuers solvency. A list of the issuers members. FINANCIAL INFORMATION The two most recently published audited annual financial statements prepared in accordance with the accounting and auditing principles adopted by the issuer, and a brief description of those accounting and auditing principles. Details of any significant changes to the issuers financial position which has occurred since the end of the latest published audited annual financial statement, or an appropriate negative statement. 5. 5.1. LEGAL AND ARBITRATION PROCEEDINGS Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which are likely to have, or have had in the recent past, significant effects on the issuers financial position, or provide an appropriate negative statement. Information on any immunity the issuer may have from legal proceedings pursuant to its constituent document.
1.2.
2.
5.2.
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6. STATEMENT BY EXPERTS AND DECLARATION OF ANY INTERESTS Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address and qualifications. If the report has been produced at the issuers request a statement to that effect, that such statement or report is included, in the form and context in which it is included, with the consent of that person. To the extent known to the issuer, provide information in respect of any conflict of interests relating to such expert which may have an effect on the independence of the expert in the preparation of the report. 7. DOCUMENT ON DISPLAY A statement that for the life of the registration document the following documents (or copies thereof), where applicable, will be made available on request: (a) annual and audit reports of the issuer for each of the last two financial years prepared in accordance with the accounting and auditing principles adopted by the issuer; (b) all reports, letters, and other documents, valuations and statements prepared by any expert at the issuers request any part of which is included or referred to in the registration document; (c) the issuers constituent document. An indication of where the documents on display may be inspected, by physical or electronic means.
357
B
ANNEX XVIII Table of combinations
REGISTRATION DOCUMENT SCHEDULES BUILDING BLOCK
TYPES OF SECURITIES
Share
Debt and derivative (< Debt and derivative (> EUR 50 000) or = EUR 50 000)
Asset -backed securities
Banks debt and deriPro forma information vative
Shares (preference shares, redeemable shares, shares with preferential subscription rights; etc.) or or
Bonds (vanilla bonds, income bonds, structured bonds, etc.) with a denomination of less than EUR 50 000 or
Bonds (vanilla bonds, income bonds, structured bonds, etc.) with a denomination of at least EUR 50 000 or or or or
or
Debt securities guaranteed by a third party
or or
Derivative securities guaranteed by a third party
Asset-backed securities or or or
Bonds exchangeable or convertible into third-party shares or issuers' or group shares which are admitted on a regulated market
2004R0809 EN 01.03.2007 002.001 98
Bonds exchangeable or convertible into the issuer's shares not admitted on a regulated market
B
REGISTRATION DOCUMENT SCHEDULES BUILDING BLOCK
TYPES OF SECURITIES
Share
Debt and derivative (< Debt and derivative (> EUR 50 000) or = EUR 50 000)
Asset -backed securities
Banks debt and deriPro forma information vative
Bonds exchangeable or convertible into group's shares not admitted on a regulated market
or
or
or
Bonds with warrants to acquire the issuer's shares not admitted to trading on a regulated market
Shares with warrants to acquire the issuer's shares not admitted to trading on a regulated market
Derivatives securities giving the right to subscribe or to acquire the issuer's shares not admitted on a regulated market or or or
Derivatives securities giving the right to acquire group's shares not admitted on a regulated market or or
2004R0809 EN 01.03.2007 002.001 99
Derivatives securities giving the right to subscribe or to acquire issuer's or group shares which are admitted on a regulated market and derivatives sec. linked to any other underlying than issuer's or group shares which are not admitted on a regulated market (including any derivatives sec. entitling to cash settlement)
or
B
REGISTRATION DOCUMENT SCHEDULES
TYPES OF SECURITIES
Collective investment undertaking of the closed-end type States and their regional and local authorities
Public international bodies/Debt Securities guaranteed by a Member State of the OECD
Shares (preference shares, redeemable shares, shares with preferential subscription rights; etc.)
Bonds (vanilla bonds, income bonds, structured bonds, etc with a denomination of less than EUR 50 000
Bonds (vanilla bonds, income bonds, structured bonds, etc.) with a denomination of at least EUR 50 000
Asset-backed securities
Bonds exchangeable or convertible into third party shares or issuers' or group shares which are admitted on a regulated market
2004R0809 EN 01.03.2007 002.001 100
B
REGISTRATION DOCUMENT SCHEDULES
TYPES OF SECURITIES
Collective investment undertaking of the closed-end type States and their regional and local authorities
Public international bodies/Debt Securities guaranteed by a Member State of the OECD
Bonds with warrants to acquire the issuer's shares not admitted to trading on a regulated market
Derivatives securities giving the right to subscribe or to acquire the issuer's shares not admitted on a regulated market
Derivatives securities giving the right to acquire group's shares not admitted on a regulated market
Derivatives securities giving the right to subscribe or to acquire issuer's or group shares which are admitted on a regulated market and derivatives sec. linked to any other underlying than issuer's or group shares which are not admitted on a regulated market (including any derivatives securities entitling to cash settlement)
2004R0809 EN 01.03.2007 002.001 101
B
SECURITIES NOTE SCHEDULES ADDITIONAL BUILDING BLOCKS
TYPES OF SECURITIES
Share
Debt (<EUR 50 000) Guarantees
Debt (> or = EUR 50 000)
Derivatives securities
Underlying share
Shares (preference shares, redeemable shares, shares with preferential subscription rights; etc.)
Bonds (vanilla bonds, income bonds, structured bonds, etc with a denomination of less than EUR 50 000
Bonds (vanilla bonds, income bonds, structured bonds, etc) with a denomination of at least EUR 50 000
or
or
or
or
Bonds exchangeable or convertible into third party shares or issuers' or group shares which are admitted on a regulated market
or
or
Only point 4.2.2
or
or
2004R0809 EN 01.03.2007 002.001 102
or
or
B
SECURITIES NOTE SCHEDULES ADDITIONAL BUILDING BLOCKS
TYPES OF SECURITIES
Share
Debt (<EUR 50 000) Guarantees
Debt (> or = EUR 50 000)
Derivatives securities
Underlying share
Bonds with warrants to acquire the issuer's shares not admitted to trading on a regulated market and except point 4.2.2 except point 4.2.2 except point 4.2.2
or
or
and except point 4.2.2
Derivatives securities giving the right to subscribe or to acquire the issuer's shares not admitted on a regulated market
Derivatives securities giving the right to acquire group's shares not admitted on a regulated market
Derivatives securities giving the right to subscribe or to acquire issuer's or group shares which are admitted on a regulated market and derivatives securities linked to any other underlying than issuer's or group shares which are not admitted on a regulated market (including any derivatives securities entitling to cash settlement)
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Annex XIX List of specialist issuers Property companies Mineral companies Investment companies Scientific research based companies Companies with less than three years of existence (start-up companies) Shipping companies.
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Annex III
List of national laws implementing the Prospectus Directive

This Annex contains a list of the current national legislation implementing the Directive.
Austria
Bundesgesetz, mit dem das Kapitalmarktgesetz, das Brsegesetz, das Investmentfondsgesetz, das Wertpapieraufsichtsgesetz und das Finanzmarktaufsichtsbehrdengesetz gendert werden, Bundesgesetzblatt (BGBl) I Nr. 78/2005 of 28 June 2005
Belgium
Wet van 16 juni 2006 op de openbare aanbieding van beleggingsinstrumenten en de toelating van beleggingsinstrumenten tot de verhandeling op een gereglementeerde markt, Belgisch Staatsblad of 21 June 2006 Loi du 16 juin 2006 relative aux offres publiques dinstruments de placement et aux admissions dinstruments de placement la ngociation sur des marchs rglements, Moniteur belge of 21 June 2006
Bulgaria
; , no.: 86, date pub: 24/10/2006; date into force/en vigueur: 01/01/2007 2 17.09.2003 . a / ; , no.: 101, date pub: 15/12/2006; date into force/en vigueur: 01/01/2007; ref.: (MNE(2006)58792)
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Annex III
; , no.: 84, date pub: 17/10/2006; date into force/en vigueur: 01/01/2007; ref.: (MNE(2006)58793) ; , no.: 59, date pub: 21/07/2006; date into force/en vigueur: 01/01/2007; ref.: (MNE(2006)58794) - ; , no.: 30, date pub: 11/04/2006; date into force/en vigueur: 17/07/2006; ref.: (MNE(2006)58796) ; , no.: 52, date pub: 29/06/2007; date into force/en vigueur: 01/11/2007; ref.: (MNE(2006)58797) 38 25.07.2007 . / ; , no.: 67 , date pub: 17/08/2007 ; date into force/en vigueur: 01/11/2007 ; ref.: (MNE(2006)58798)
Cyprus
114()/2005 , , . 4031, , , . 783 of 9 September 2005
Czech Republic
Zkon . 56/2006 Sb., kterm se mn zkon . 256/2004 Sb., o podnikn na kapitlovm trhu, ve znn pozdjch pedpis, a dal souvisejc zkony
Denmark
Lov nr. 1460 af 22 December 2004 om vrdipapirhandel m.v. Bekendtgrelse nr. 306/2005 om prospekter for vrdipapirer, der optages til notering eller handel p et reguleret marked, og ved frste offentlige udbud af vrdipapirer over 2.500.000 euro
Estonia
Vrtpaberituru seaduse, Investeerimisfondide seaduse, Tagatisfondi seaduse ja asjaoigusseaduse muutmise seadus
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Annex III
Finland
Laki arvopaperimarkkinalain muuttamisesta, 23.6.2005/448 Laki Rahoitustarkastuksesta annetun lain muuttamisesta, 23.6.2005/449 Laki velkakirjalain muuttamisesta, 23.6.2005/450 Laki korkotulon lhdeverosta annetun lain 3 :n muuttamisesta, 23.6.2005/451 Valtiovarainministerin asetus arvopaperimarkkinalain 2 luvussa tarkoitetusta esitteest, 23.6.2005/452
France
Loi N 2005-842 du 26 juillet 2005 pour la confiance et la modernisation de lconomie
Germany
Gesetz zur Umsetzung der Richtlinie 2003/71/EG des Europischen Parlaments und des Rates vom 4. November 2003 betreffend den Prospekt, der beim ffentlichen Angebot von Wertpapieren oder bei deren Zulassung zum Handel zu verffentlichen ist, und zur nderung der Richtlinie 2001/34/EG (ProspektrichtlinieUmsetzungsgesetz), Bundesgesetzblatt Teil I of 22 June 2005, page 1698
Greece
(NOMO . 3401)
Hungary
2005. vi LXII.trvnya tkepiacrl szl 2001. vi CXX. Trvnymdostsrl 2004. vi CXL.trvnya kzigazgatsi hatsgi eljrs s szolgltatsltalnos szablyairl 2001. vi CXX. trvny a t kepiacrl 1999. vi CXXIV.trvnya Pnzgyi Szervezetek llami Felgyeletr l 1995. vi LXVI. trvny a kziratokrl, a kzlevltrakrl s a magnlevltri anyag vdelmr l6. 1957. vi IV. trvny az llamigazgatsi eljrs ltalnos szablyairl
Ireland
Prospectus (Directive 2003/71/EC) Regulations 2005 (SI n 324 of 2005)
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Annex III
Italy
Decreto legislativo 28 marzo 2007, n. 51 Attuazione della direttiva 2003/71/ CE relativa al prospetto da pubblicare per lofferta pubblica o lammissione alla negoziazione di strumenti finanziari, che modifica la direttiva 2001/34/CE, pubblicato sulla Gazzetta Ufficiale n. 94 del 23 Aprile 2007
Latvia
Grozjumi Finanu instrumentu tirgus likum July 12, 2005 Publicts: Vstnesis 28.06.2005 Nr.99 (ZIOTJS 28.07.2005 Nr.14)
Lithuania
Lietuvos Respublikos vertybini popieri komisijos 2005 m. liepos 15 d. nutarimas Nr. 1K-21 d l Vertybini popieri prospekto rengimo ir tvirtinimo bei informacijos atskleidimo taisykli patvirtinimo Lietuvos Respublikos vertybini popieri rinkos statymo pakeitimo ir papildymo statymas Nr. X-270 Lietuvos Respublikos akcini bendrovi statymo 13, 44, 46, 48, 55, 72 ir 74 straipsni pakeitimo statymas Nr. X-271
Luxembourg
Loi du 10 juillet 2005 relative aux prospectus pour valeurs mobilires et portant transposition de la directive 2003/71/CE du Parlement Europen et du Conseil du 4 novembre 2003 concernant le prospectus publier en cas doffre au public de valeurs mobilires ou en vue de ladmission de valeurs mobilires la ngociation, et modifiant la directive 2001/34
Malta
Financial Markets Act (CAP. 345) Recognition of Approved Listing Particulars Regulations, 2004
The Netherlands
Wet van 23 juni 2005 tot wijziging van de Wettoezicht effectenverkeer 1995 ter implementatie van richtlijn nr. 2003/71/EG van het Europees Parlement en de Raad van de Europese Unie van 4 november 2003 betreffende het prospectus dat gepubliceerd moet worden wanneer effecten aan het publiek worden aangeboden of tot de handel worden toegelaten en tot wijziging van Richtlijn 2001/34/EG (PbEU L 345) en tot uitvoering van verordening nr. 809/2004 van de Commissie van de Europese Gemeenschappen van 29 april 2004 tot uitvoering van Richtlijn 2003/71/EG van het Europees Parlement en de Raad wat de in het prospectus
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Annex III
te verstrekken informatie, de vormgeving van het prospectus, de opneming van informatie door middel van verwijzing, de publicatie van het prospectus en de verspreiding van advertenties betreft (PbEUL 149) Besluit van 23 juni 2005, houdende wijziging van het Besluit toezicht effectenverkeer 1995 in verband met de implementatie van richtlijn nr. 2003/71/EG van het Europees Parlement en de Raad van de Europese Unie van 4 november 2003 betreffende het prospectus dat gepubliceerd moet worden wanneer effecten aan het publiek worden aangeboden of tot de handel worden toegelaten en tot wijziging van richtlijn 2001/34/EG en tot uitvoering van de verordening tot uitvoering van die richtlijn wat de in het prospectus te verstrekken informatie, de vormgeving van het prospectus, de opneming van informatie door middel van verwijzing, de publicatie van het prospectus en de verspreiding van advertenties betreft
Poland
Ustawa z dnia 29 lipca 2005 r. o obrocie instrumentami finansowymi Ustawa z dnia 29 lipca 2005 r. o nadzorze nad rynkiem kapitaowym Ustawa z dnia 29 lipca 2005 r. o ofercie publicznej i warunkach wprowadzania instrumentw finansowych do zorganizowanego systemu obrotu oraz o spkach publicznych Ustawa z dnia 27 maja 2004 r. o funduszach inwestycyjnych
Portugal
Presidncia do Conselho de Ministros-De ter sido rectificado o Decreto-Lei N.52/2006, do Ministrio das Finanas e da Aministrao Pblica, que, no usa das autorizaes legislativas concedidas pelas Leis n. os 55/2005, de 18 de Novembro, e 56/2005, de 25 de Novembro, transpe para a ordem juridica nacional a Directiva n. 2003/6/CE, do Parlamento e do Conselho, de 28 de Janeiro, relativa ao abuso de informaa privilegiada e manipulao de mercado, e a Directiva n. 2003/71/CE, do Parlamento Europeu e do Conselho, de 4 de Novembro, relativa ao prospecto a publicar em caso de oferta pblica de valores mobilirios ou da sua admisso negociao
Romania
Lege nr. 297/2004 din 28/06/2004 privind pia a de capital Monitorul Oficial, Partea I nr. 571 din 29/06/2004 Regulamentul Comisiei Nationale a Valorilor Mobiliare nr. 1/2006 din 09/03/2006 privind emiten ii i opera iunile cu valori mobiliare Monitorul Oficial, Partea I nr. 312bis din 06/04/2006 Regulament Comisiei Nationale a Valorilor Mobiliare nr. 31/2006 din 14/12/2006 privind completarea unor reglementri ale Comisiei Na ionale a Valorilor Mobiliare, n vederea implementrii unor prevederi ale directivelor europene Monitorul Oficial, Partea I nr. 5 din 04/01/2007
369
Annex III
Slovakia
Zkon z 23. jna 2005 . 336/2005 Z. z., ktorm sa men a dopa zkon . 566/2001 Z. z. o cennch papieroch a investinch slubch a o zmene a doplnen niektorch zkonov (zkon o cennch papieroch) v znen neskorch predpisov a o zmene a doplnen niektorch zkonov (iastka 141/2005 Zbierky zkonov Slovenskej republiky, dtum vydania 27.7.2005)
Slovenia
Zakon o trgu finannih instrumentov (ZTFI), published in Uradni list Republike Slovenije (www.uradni-list.si) no. 67/2007 (Official Journal of Republic of Slovenia No. 67/2007) of 27 July 2007.
Spain
Real Decreto-ley 5/2005, de 11 de marzo de 2005, de reformas urgentes para el impulso a la productividad y para la mejora de la contratacin pblica Real Decreto 1.310/2005, de 4 de noviembre, por el que se desarrolla parcialmente la Ley 24/1988, de 28 de julio, del Mercado de Valores, en materia de admisin a negociacin de valores en mercados secundarios oficiales, de ofertas pblicas de venta o suscripcin y del folleto exigible a tales efectos Orden EHA/3537/2005, de 10 de noviembre, por la que se desarrolla el artculo 27.4 de la Ley 24/1988, de 28 de julio, del Mercado de Valores
Sweden
Lag (2005:833) om ndring i lagen (1991:980) om handel med finansiella instrument Lag (2005:834) om ndring i lagen (1992:543) om brs- och clearingverksamhet Lag (2004:46) om investeringsfonder Lag (2005:380) om ndring i lagen (1992:543) om brs- och clearingverksamhet
United Kingdom
Financial Services and Markets. The Prospectus Regulations 2005 Financial Services and Markets. The Prospectus Regulations 2005 Financial Services and Markets. The Prospectus Regulations 2005 Concordance table Prospectuses Ordinance 2005
370
Annex III
Iceland
Reglurer um gildistku reglugerar framkvmdastjrnarinnar nr. 809/2004 um framkvmd tilskipunar Evrpuingsins og rsins 2003/71/EB a v er varar upplsingar lsingum, svo og framsetningu eirra, upplsingar felldar inn me tilvsun, og birtingu lsinganna, svo og dreifingu auglsinga gr.Regluger essi er sett samrmi vi kvrun sameiginlegu EESnefndarinnar nr. 64/2005, fr 29. aprl 2005 um a fella inn EES-samninginn og taka upp innlendan rtt kvi reglugerar framkvmdastjrnarinnar (EB) nr. 809/2004 um framkvmd tilskipunar Evrpuingsins og rsins 2003/71/EB a v er varar upplsingar lsingum, svo og framsetningu eirra, upplsingar felldar inn me tilvsun, og birtingu lsinganna, svo og dreifingu auglsinga gr.Me regluger essari last gildi hr landi regluger framkvmdastjrnarinnar (EB) nr. 809/2004 um framkvmd tilskipunar Evrpuingsins og rsins 2003/71/EB a v er varar upplsingar lsingum, svo og framsetningu eirra, upplsingar felldar inn me tilvsun, og birtingu lsinganna, svo og dreifingu auglsinga, merkt fylgiskjal I, samkvmt kvrun sameiginlegu EESnefndarinnar um breytingu IX. viauka vi EES-samninginn, nr. 64/2005, fr 29. aprl 2005, merkt fylgiskjal II. Ef samrmi er milli slensks og ensks texta reglugerar framkvmdastjrnarinnar nr. 809/2004 skal skra slenska textann me hlisjn af enska textanum gr.Regluger essi, sem sett er me heimild 73. gr. laga um verbrfaviskipti nr. 33/2003, me sari breytingum, last egar gildi
Norway
Verdipapirhandelloven
Liechtenstein
Wertpapierprospektgesetz, Liechtensteinisches Landesgesetzblatt (LGBl.) 2007/ Nr. 196 of 23 May 2007
371
Index
Austria admissions to trading on a regulated market, approval and appeal procedures 9 advance notice of publication 12 advertisements 13 appeals, offers of securities to the public 8 approval and appeal procedures admissions to trading on a regulated market 9 offers of securities to the public appeals 8 procedure 67 auditor of prospectus liability of 15 requirement for indemnity insurance 17n21 sanctions against 14 base prospectus 10 businesses as qualified investors 8 competent authority 4 competent notification office 5 content of prospectus 9 directors shares, exemption from prospectus requirement for 13 electronic filing of documents 5 electronic format, publication in 11 exemption from requirement for 12 notice of availability of prospectus 12
employee share offers, exemption from prospectus requirement for 13 exemptions from prospectus requirement for offers of securities to the public 78 format of prospectus 10 impact of Directive 16 implementing the Directive impact 16 legislation 34 indemnity insurance, auditor required to have 17n21 investment funds exemption from notification of information about 13 regulation of 16 investments not covered by the Directive 15 definition of other investments 18n22 investors right to claim damages 1415 issuer/offeror liability of 15 responsibility to publish supplement 1011 sanctions against 14 language requirements 11, 17n14 summary of prospectus 10 legal entities not small- and medium-sized enterprises (SMEs), as qualified investors 8
372
Index
operating in financial markets as qualified investors 8 legislation implementing the Directive 34 for securities regulation 4 investment funds 16 liability 1415 multiple documents, prospectus consisting of 10 natural persons as qualified investors 8 newspapers, publication in 11, 17n15 notice of availability of prospectus 12 non-public offers, exemption from prospectus requirement for published information about 78 notice of availability of prospectus 12 notification of regulated securities information exemption from requirement 13 offers of securities to the public appeals procedure 8 approvals procedure 67 official gazette, publication in 11 other investments, definition of 18n22 participation certificates exemption from notification of information about 13, 17n20 passported prospectuses 13 advance notice of publication 12 printed format, publication in 11, 17n16 private placements, approval procedure for 7 prospectus liability 1415 public sector bodies as qualified investors 8 publication of prospectus 1113, 17n15, n16 qualified investors definition of 8 exemption for offers
excluding 7 including 7 register of securities documentation 5, 12 sanctions 1314 size of offer or value of securities, exemptions from prospectus requirement relating to 7 small- and medium-sized enterprises (SMEs), definition of 17n11 status as/as not home Member State 6 summary of prospectus 9 exemption from requirement for 17n12 supplement to prospectus 1011 time limits for appeals 8 valid publication, criteria for 1112 value of securities see size of offer or value of securities, rules relating to websites, publication on 11 register of securities documentation 12 Belgium, legislation implementing the Directive 1802 Bulgaria activity report in annual financial report 39, 40 three-monthly report 40 admissions to trading on a regulated market exemptions 246 final price and amount of securities offered, issuer/offerors responsibility to disclose and publish 29 in other Member States, language requirements 30 suspension of 37 updated information on traded securities 29 advertisements 36
373
Index
Bulgaria (cont.) amendments to prospectus 29 annual report see financial report application for approval of prospectus 323 approval of prospectus 315 auditor of prospectus liability for financial statements 39 prospectus liability 31 responsibility to provide information 37 banks, exemption from prospectus requirement for securities issued by 41 non-equity securities 223 base prospectus 27 validity of 34 central banks of Member States, exemption for shares in 22 charges for information 41 collective investment undertakings (non-closed-end), exemption from prospectus requirement for 22 competent authority 212 competency of 312, 43 powers of 37 consolidated financial statements 3940 quarterly statements 40 content of financial report 39 content of prospectus 267 continuous or regular basis, exemption from prospectus requirement for shares issued on 223 converted shares, exemption for 25 disclosure of information 3842 documents submitted with application for approval of prospectus 323 electronic format, publication in 36 employee share offers, exemption for 24, 25
Euro exchange rate 44n2 examination of prospectus 33 exchanged shares, exemption for 25 exemptions from prospectus requirement 226 final price and amount of securities offered, issuer/offerors responsibility to disclose and publish 29 financial report disclosure of 39 responsibilities 39 financial statements consolidated 3940 liability for 39 financial supervision, extent of regime 44n1 format of prospectus 27 free shares, exemption from prospectus requirement for 24, 25 guarantor of securities, prospectus liability 31 home country, definition of 38 host country, definition of 38 implementing the Directive, legislation 1920 information not published in prospectus liability arising from 31 restriction on 37 initial disclosure of information of public offers, legislation regulating 201 investment intermediaries, legislation regulating 20 investors right to claim transaction null and void 26 right to withdraw acceptance of offer 28 judicial control 44 language requirements 30, 42 application for approval of prospectus 32 legislation implementing the Directive 22, 26
374
Index
for securities regulation 201 liability for financial statements 39 liability for prospectus 31 liable persons identified in prospectus 31 market abuse, legislation against 20 merger, exemption for securities offered in connection with 24 merger, exemption from prospectus requirement for securities offered in connection with, 24 money market instruments, exemption from prospectus requirement for 38 multiple-document prospectus 28 choice of 27 newspapers, publication in 36 non-equity securities issued by banks, exemption from prospectus requirement for 223 non-profit organisations, exemption from prospectus requirement for securities issued by 22 null and void transactions 26 offers of securities to the public exemptions 234 legislation regulating 20 initial disclosure of information 201 public offering of securities, definition of 44n3 suspension of 37 offers representing a percentage of traded shares 24 official gazette, publication in 36 omission of information, authorised 289 other Member States, offers and applications in 345 excluding Bulgaria 30 including Bulgaria 30 language requirements excluding Bulgaria 42 including Bulgaria 42 printed format, publication in 36 procurator, prospectus liability 31
prospectus liability 31 public offering of securities, definition of 44n3 public sector bodies exclusions from requirements for disclosure of information 40 by issuers of high-value securities 41 public sector bodies, exemption from prospectus requirement for securities offered by guaranteed by 22 issued by 22 publication of prospectus 34 qualified investors, exemption from prospectus requirement for offers to 23 quarterly activity report 40 quarterly financial statements 40 refusal of approval for prospectus 33 register of securities documentation 36, 412 resales of securities, exemption for 23 responsible persons, identification in prospectus 31 sanctions 37 securities traded on another market, exemption for 256 single-document prospectus, choice of 27 size of offer or value of securities, rules relating to applications for admission to trade in other Member States, language requirements 30 banks non-equity securities 23 exclusions from requirements for disclosure of information by issuers of high-value securities 41 exclusions from requirements for disclosure of information by banks 41 exemptions relating to 23, 26
375
Index
Bulgaria (cont.) language requirements 42 status as/as not home Member State 312 substitute shares, exemption from prospectus requirement for 24 summary of prospectus, liability arising from 31 supplement to prospectus 2930 suspension of public offer or admission to trade 37 takeover, exemption from prospectus requirement for securities issued in connection with 24 time limits disclosure of financial report 39 disclosure of information 42 investors withdrawal of acceptance of offer 28 notification following examination of prospectus 33 notification of decision to assign approval to other competent authority 32 publication in register 36 publication of prospectus 36 publication of quarterly financial statements and activity reports 40 submission of updated information on traded shares 29 validity of base prospectus 34 validity of prospectus 34 updated information 29 validity of prospectus 34 value of securities see size of offer or value of securities, rules relating to Cyprus admissions to trading on a regulated market approval and appeal procedures 50 exemptions 50 advertisements 556 prohibition/suspension of 47
annual bulletin, publication of 59n3 appeals 49, 59n6 approval and appeal procedures 4850 supplement to prospectus 52 approved version, published prospectus to be identical to 54 base prospectus 52 claim for damages, burden of proof 58 competent authority 468 competence of 50 notification of decision to approve/reject prospectus 48 notification of incomplete documents 48 publication of documents on website 545 content of prospectus 502 corrections to draft prospectus 48 damages, burden of proof in claim for 58 disclosure of information, competent authoritys powers to require 47 draft prospectus, corrections to 48 electronic format, publication in 54 English, documents in 53, 56 exemptions from prospectus requirement admissions to trading on a regulated market 50 offers of securities to the public, 4950 existing shares, exemption for offers representing a percentage of 50 fines for breach of regulations 567 format of prospectus 52 free shares, exemption from prospectus requirement for 50 implementing the Directive impact 589 legislation 467
376
Index
inaccurate information, investors right to withdraw because of 53 incomplete documents 48 incorporation of information by reference 52 initial disclosure of information of public offers, publication of prospectus 534 investors right to withdraw acceptance of offer 53 language requirements 53 passported prospectuses 56 legislation implementing the Directive 467 for securities regulation 47 liability 57 new information, investors right to withdraw because of 53 newspapers, publication in 54 offers of securities to the public approval and appeal procedures 489 content of prospectus 51 exemptions for 4950 prohibition/suspension of 47 omission of information, authorised 51 other Member States advertisements relating to offers and applications in 55 prospectuses approved in 56 printed format, publication in 54 prohibition/suspension of of advertisements 47 offers of securities to the public 47 trading on regulated market 47 prospectus liability 57 publication of prospectus 535 published prospectus to be identical to approved version 54 qualified investors advertisements to 56 exemption for offers to 49 register of securities documentation 545
resales of securities, exemption from prospectus requirement for 49 sanctions 567 securities and transactions not subject to Directive 58 separate documents, prospectus in 52 single-document prospectus 52 size of offer or value of securities, exemptions from prospectus requirement relating to 49, 50 substitute shares, exemption from prospectus requirement for 49 summary of prospectus amendment of 53 liability for 58 supplement to prospectus 523 suspension see prohibition/suspension takeover, exemption from prospectus requirement for securities issued in connection with 49, 50 time limits approval of supplement 52 notification by competent authority of incomplete documents 48 notification of competent authoritys decision to approve/reject prospectus 48 prohibition/suspension of of advertisements 47 prohibition/suspension of trading on regulated market 47 publication of documents on competent authoritys website 545 publication of prospectus for initial public offer 534 trading on regulated market, prohibition/suspension of 47 transfer of competence by competent authority 48 underwriter liability of 58 role of 489 validity of prospectus 55
377
Index
Cyprus (cont.) value of securities see size of offer or value of securities, rules relating to Finland admissions to trading on a regulated market approval procedures 64 inclusion of all necessary information, requirement for 65 advertisements, approval of 64 annual summary 68 approval procedures 64 prospectuses from outside EEA 69 base prospectus 65 claim for damages, cost of translation of prospectus, responsibility for 66 competent authority 61, 64, 69 powers and sanctions 70 publication of prospectus on website 64 content of prospectus 656 EEA, prospectuses from outside 69 electronic format, publication in 67 exemptions exempt securities 62 from obligation to prepare a prospectus 623 from publication of annual summary 68 financial information in accordance with IFRS 656 foreign prospectuses, translation of 69 format of prospectus 65 further guidance on Directive 61 IFRS, financial information in accordance with 656 implementing the Directive impact 71 legislation 60, 61
incorporation of information by reference 66 investors right to withdraw acceptance of offer 678 language requirements 66 foreign prospectuses 69 legislation implementing the Directive 60, 61 for securities regulation 61 scope of 612 liability see prospectus liability multiple-document prospectus 65 obligation to prepare a prospectus 62 omission of information, authorised 66 passported prospectuses 69 printed format, publication in 67 prospectus liability 70 public sector bodies, exemption from prospectus requirement for securities offered by 63 publication of prospectus 67 on competent authoritys website 64 qualified investors, exemption from prospectus requirement for offers to 63 sanctions 70 securities note 65 single-document prospectus 65 size of offer or value of securities, rules relating to exemption from publication of annual summary 68 exemption from requirement to publish a prospectus 63 inclusion of all necessary information, requirement for 65 summary of prospectus 65, 66 supplement to prospectus 678 time limit for approval 64 time limits approval of supplement 64 investors right to withdraw acceptance of offer 678 publication of prospectus 67
378
Index
review of prospectus by competent authority 64 submission of advertisements 64 transfer of competence by competent authority 69 validity of prospectus 67 transfer of competence by competent authority 69 translation of prospectus foreign prospectuses 69 responsibility for cost in damages claim 66 validity of prospectus 67 value of securities see size of offer or value of securities, rules relating to France admissions to trading on a regulated market definition of 74 exempt from obligation to publish prospectus 77 language requirements where no admission sought in France 81 prospectus in English 81 French translation of summary 81 publication of notice in official gazette 78 advertisements 834 annual report format for prospectus 80 annual review of registration document 80 approval and appeal procedures 758 auditor, comfort letter from 85 auditors, waiver of requirements for offers to qualified investors 85 banks 79 base document 80 base prospectus 80 CESR Recommendations, compliance with 79
choice of single or multi-document format 80 collective investment schemes 77 comfort letter 85 competent authority 73, 745 publication of prospectus on website 82 content of prospectus 789 debt issues, distinction between retail and wholesale 79 demerger, exemption for securities offered in connection with 77 due diligence letter from listing sponsors 85 electronic format, publication in 82 English, documents in 812 equity securities, French summary of passported prospectus 82 exemptions 758 final terms, approval of 80 financial report, prospectus used as 85 format of prospectus 80 further guidance on Directive 73 implementing the Directive 789 impact 856 legislation 73 incomplete documents 78 incorporation of information by reference 79 individual exemptions, granting of 78 information document published instead of prospectus 778 issuer/offeror/applicant limitation of liability 85 responsibility for publication of prospectus and supporting information 82 language requirements 812 company documents of non-French companies 78 legislation for securities regulation 73 legislation implementing the Directive 73, 789
379
Index
France (cont.) merger, exemption for securities offered in connection with 77 multiple-document prospectus 80 newspapers, publication in 82 non-French companies filing of translation of company documents 78 offers of securities to the public definition of 74 exempt from obligation to publish prospectus 778 language requirements where no offer made in France 81 prospectus in English 81 official gazette, publication in notice of admission to trading 78 other Member States, prospectuses from competence of competent authority 75 passported prospectuses control in cases of irregularities 84 passported prospectuses, requirement for summary in French 82 portfolio managers, offers to 76 previous prospectus, reference to 80 printed format, publication in 82 private placements 767 prohibition/suspension of transaction 84 prospectus liability 85 summary of prospectus 79 public sector bodies 77 publication of prospectus 82 qualified investors definition of 767 listing prospectus in English 812 waiver of requirements of auditors and listing sponsors 85 real estate collective investment schemes 77 registration document 80 annual review of 80 updated by securities note 80
retail and wholesale debt issues, distinction between 79 sanctions 84 securities, definition of 74 securities note 80 updating registration document 80 size of offer or value of securities, rules relating to 77 competence of competent authority 75 distinction between retail and wholesale debt issues 79 exemptions 76, 77 French translation of English-language summary 81 language requirements 81 summary of prospectus 79 sponsors of listing, comfort letter from 85 sponsors of listing, due diligence letter 85 sponsors of listing, waiver of requirements for offers to qualified investors 85 summary of prospectus 79, 80 incorporation of information by reference 79 supplement to prospectus 801 incomplete documents 78 suspension of transaction 84 time limits approval procedures 78 publication of prospectus on competent authoritys website 82 publication of prospectus on issuers website 82 translation English-language summary 81 translation of non-French companies documents, filing of 78 Transparency Directive, requirement for true and fair view of financial statements 85
380
Index
true and fair view of financial statements, Transparency Directive requirement for 85 value of securities see size of offer or value of securities, rules relating to wholesale and retail debt issues, distinction between 79 Germany admissions to trading on a regulated market prospectus liability 98 advertisements 96 base prospectus 94 choice of single or multi-document format 93 claim for liability based on summary of prospectus 98 closed-ended funds, prospectus requirement 989 competent authority 8990 disclaimer accompanying reference to approval of prospectus 91 content of prospectus 923 cross-references in summary 93 decoupled bookbuilding 93 definitions in summary 93 disclaimer accompanying reference to approval of prospectus 91 documents submitted with draft prospectus 90 draft supplement, approval of 94 electronic format, publication in 95 English, documents in 945 equivalent information, authorisation of 93 exemptions securities and transactions not subject to Directive, rules for 989 exemptions from obligation to publish prospectus 912 final offer price, inclusion in prospectus 93 final terms, publication of 94
financial intermediaries, responsibility of 98 fines for breach of regulations 97 format of prospectus 934 implementing the Directive impact 99 legislation 88 incorporation of information by reference 93 draft prospectus 90 incorrect/incomplete information, liability for 98 initial public offering, time limit for end of 95 investment funds, prospectus requirement 989 investors right to withdraw acceptance of offer 93, 94, 98 language requirements 945 legislation for securities regulation 889 legislation implementing the Directive 88 multiple-document prospectus 93 newspapers, publication in 95 number of securities offered, inclusion in prospectus 93 offers of securities to the public prospectus liability 98 omission of information, authorised 92 base prospectus 94 other countries, prospectuses approved in 97 passported prospectuses 97 price range inclusion in prospectus 93 published in supplement 93 printed copies of prospectus available free of charge 95 printed format, publication in 95 prohibition/suspension of advertisements 96 prospectus liability 98
381
Index
Germany (cont.) publication of prospectus 956 reference to approval of prospectus, disclaimer accompanying 91 responsible persons, identification in prospectus 98 sanctions 97 securities and transactions not subject to Directive, rules for 989 single-document prospectus 93 stock exchanges role in applying sanctions 97 stock exchanges role in deciding if Prospectus Directive applies 912 summary of prospectus 93 liability claim based on 98 supplement to 94 supplement to prospectus 94 price range published in 93 suspension of advertisements 96 time limits approval of draft prospectus 901 approval of draft supplement 94 end of initial public offering 95 investors right to withdraw acceptance of offer 93, 94, 98 prohibition/suspension of advertisements 96 publication of prospectus 95 validity of prospectus 96 transactions not subject to Directive, rules for 989 transfer of competence to other competent authority 90 trust assets, prospectus requirement for 989 validity of prospectus 96 value of securities see size of offer or value of securities, rules relating to Iceland admissions to trading on a regulated market approval procedures 208
exemptions from prospectus requirement 208 advertisements 212 appeals, offers of securities to the public 208 approval and appeal procedures 2078 base prospectus 210 validity of 212 Board of Directors, liability of 214 choice of single or multi-document format 210 competent authority 2067 failure to respond to application does not mean approval of request 208 publication of prospectus on website 212 content of prospectus 20910 criminal penalties 213 directors, liability of 214 draft prospectus, documents to be submitted with 207 electronic format, publication in 21112 English, documents in 21011 equivalent information, authorisation of 209 European Economic Area, prospectuses from outside 209 exemptions from prospectus requirement admissions to trading on a regulated market 208 offers of securities to the public 208 failure by competent authority to respond does not mean approval of request 208 final price and amount of securities offered, publication of 209 fines for breach of regulations 213 format of prospectus 210 further guidance on Directive 206 implementing the Directive 214 legislation 2056 incomplete documents 207
382
Index
incorporation of information by reference 210 investors right to withdraw acceptance of offer 20910 language requirements 21011 legislation implementing the Directive 2056 liability 214 multiple-document prospectus 210 newspapers, publication in 211 notice of availability of prospectus 212 offers of securities to the public appeals 208 approval procedures 2078 exemptions from prospectus requirement 208 omission of information, authorised 209 passported prospectuses 21213 persons responsible for prospectus, identification in prospectus 214 printed format, publication in 211 prospectus liability 214 publication of prospectus 21112 qualified investors advertisements to 212 exemption from prospectus requirement for offers to 208 registration document 210 validity of 212 responsible persons, identification in prospectus 214 sanctions 213 securities note 210 accompanying registration document 212 single-document prospectus 210 size of offer or value of securities, rules relating to exemptions from prospectus requirement 208 language requirements for prospectus 211 summary of prospectus 210
accompanying registration document 212 liability based on 214 supplement to prospectus 210 time limits appeals 208 approval/rejection of prospectus by competent authority, notice of decision for 207 investors right to withdraw acceptance of offer 20910 notice of availability of prospectus 212 notice of incomplete documents 207 notice of transfer of competence by competent authority 207 publication of prospectus 211 validity of prospectus 212 tort law, liability under 214 transfer of competence by competent authority 207 validity of prospectus 212 value of securities see size of offer or value of securities, rules relating to website, publication of prospectus on competent authoritys 212 Ireland admissions to trading on a regulated market, exemptions from prospectus requirement 106 advertisements 10910 annual update 108 appeals 104 time limit for 104 approval and appeal procedures 1026 base prospectus 107 CESR Recommendations, compliance with 102 choice of single or multi-document format 107 compensation, payment of 111 competent authority 102 annual updates on website 108
383
Index
Ireland (cont.) prospectuses published on website 109 content of prospectus 106, 108 draft prospectus, approval of 103 electronic format, publication in 109 availability of free printed copies 109 employee share offers, exemption for 105 English, documents in 1089 equivalent document, eligibility for passport 105 exemptions from prospectus requirement 1056 filing of approved prospectus 104 fines for breach of regulations 110, 111 format of prospectus 107 free shares, exemption for 105 implementing the Directive, legislation 1012 imprisonment for breach of regulations 111 incorporation of information by reference 108 investors right to withdraw acceptance of offer 108 language requirements 1089 translation of summary of prospectus 110 legislation implementing the Directive 10112 liability 111 listing rules (stock exchange), prospectus requirements of 111 merger, exemption from prospectus requirement for securities offered in connection with 105 multiple-document prospectus 107 newspapers, publication in 109
no prospectus to passport, exemption from prospectus requirement where 106 notice of availability of prospectus 109 obligation to publish a prospectus 1045 offers of securities to the public exemptions from prospectus requirement 105 meaning of offer to the public 104 by private companies 11112 passported prospectuses 110 eligibility of equivalent document for passporting 105 no prospectus to passport, exemption from prospectus requirement where 106 persons responsible for prospectus 1067 printed format, publication in 109 private companies, offers by 11112 prospectus liability 111 publication of prospectus 109 obligation to publish 1045 qualified investors, exemption for offers to 105 reference to other information 108 registration document 107 responsible persons 1067 sanctions 110 securities note 107 shares not offered to the public, exemption from prospectus requirement for 106 single-document prospectus 107 size limit on summary of prospectus 106 size of offer or value of securities, exemptions from prospectus requirement relating to 105, 106 stock exchange listing rules, prospectus requirements of 111 substitute shares, exemption for 105
384
Index
summary of prospectus 106, 107 liability based on 111 requirement for translation 110 supplement to prospectus 108 takeover, exemption from prospectus requirement for securities issued in connection with 105 time limits appeals 104 approval of supplement 108 filing of annual update 108 filing of approved prospectus 104 investors right to withdraw acceptance of offer 108 notification of approval decision 103 validity of registration document 107 translation of summary of prospectus, requirement for 110 value of securities see size of offer or value of securities, rules relating to Italy advertisements 1289 announcements as public offerings 121 annual update 116 approval procedures 1247 auditor, role of 1301 banks, exemption from prospectus requirement for securities issued by 123 burden of proof in damages claims 12930 liability for false or omitted information 130 central banks of Member States, exemption from prospectus requirement for securities issued by 123 choice of single or multi-document format 126 claim for damages burden of proof 12930 time limits for 130
collective investment bodies, types of 131n5 competent authority 11415, 1245 establishing content of non-standard prospectus format 118 failure to respond does not mean approval of request 125 failure to respond to application does not mean approval of request 125 limitation of prospectus liability according to respective competence 133n17 powers to extend exemptions from prospectus requirement 124 requests for passporting prospectus 116 right to decide on relevant information in advertisements 129 transfer of competence 125 compliance with Directive, declaration of 118 content of prospectus 127 non-standard formats, competent authority to establish content of 118 damages see claim for damages definitions introduced by the Directive 11922 disclosure of information to qualified investors 129 documents submitted with passporting application 116 English, documents in 117 equity securities, definition of 120 equivalent information, authorisation of 118 exemptions from prospectus requirement 1234 competent authoritys powers to extend 124 implementation of regulations 115 failure by competent authority to respond does not mean approval of request 125
385
Index
Italy (cont.) false information, burden of proof of liability 130 falsification of prospectus, offence of 131 final price and amount of securities offered, publication of 117 publication in supplement 1312n6 financial instruments, definition of 11920 financial intermediaries as qualified investors 1234 financial statements, requirement for certification by auditor 1301 format of prospectus 11718 non-standard formats, competent authority to establish content of 118 home Member State, definition of 122 host Member State, definition of 122 implementing the Directive impact on passported prospectuses 116 introduction of new definitions 11922 legislation 11415, 11819 incorporation of information by reference 1167 informative note 126 approval procedure 127 investment solicitation, definition of 132n10 language requirements 1278 translation of summary of prospectus, requirement for 116 legislation implementing the Directive 11415, 11819 liability see prospectus liability Member States, exemption from prospectus requirement for securities guaranteed by 123 multiple-document prospectus 1267 negotiable, requirement of financial instruments to be 120
non-equity securities, definition of 120 not implemented, provisions 115 objective of offer as factor in qualification as offering of securities 132n11 offers of securities, qualification of offer as 132n11 omission of information, authorised 118 omitted information, burden of proof of liability 130 passported prospectuses 11516 impact of Directive on 116 implementation of regulations 115 publication of 116 translation of summary of prospectus, requirement for 116 prospectus liability 12930 limitation according to respective competence 133n17 summary of prospectus 130 public offering of financial products announcement as 121 definition of 1202 offers qualifying as 1212 originally offered to qualified investors 121 public sector bodies, exemption from prospectus requirement for securities offered by 123 publication of prospectus information incorporated by reference 117 passported prospectuses 116 prohibition of unauthorised 1245 qualified investors decision on who qualifies as 1234 disclosure of information to 129 exemption from prospectus requirement for offers to 123 financial intermediaries as 1234
386
Index
public resales of securities originally offered to 121 small- and medium-sized enterprises (SMEs) as 123, 124 qualified operators, definition of 132n12 registration document 126 approval procedure 1267 relevant information, inclusion of 132n8 resales of securities originally offered to qualified investors 121 revocation of subscriptions 128 self-executing directive, Prospectus Directive as 114 silent consent principle 125 size of offer or value of securities, rules relating to exemption from prospectus requirement 123 identification of home Member State 122 publication of final price and size of offer in supplement 1312n6 small- and medium-sized enterprises (SMEs), definition of 123, 124 as qualified investors 124 subscriptions, revocation of 128 summary of prospectus 11718, 126 liability for 130 translation of 116 supplement to prospectus, publication of final price and size of offer in 1312n6 suspension of advertisements 129, 133n16 time limits approval of prospectus 126 damages claims 130 requests for passporting prospectus 116 revocation of subscriptions 128 suspension of advertisements 129, 133n16 validity of prospectus 127 transfer of competence by competent authority 125
transferable, requirement of financial instruments to be 120 validity of prospectus 127 value of securities see size of offer or value of securities, rules relating to Liechtenstein administrative offences 227 admissions to trading on a regulated market, approval and appeal procedures 21819 advertisements 225 appeals 220 approval and appeal procedures 21720 supplement to prospectus 222 basic prospectus 222 choice of single or multi-document format 2212 competent authority 21617 approval of prospectus no guarantee for issuer against liability 218 failure to respond to application does not mean approval of request 218 register of prospectuses 224 submission of documents in electronic format to 219 content of prospectus 2201 criminal penalties 2267 damages, liability for 2278 date of issue on prospectus, requirement for 221 electronic format publication of prospectus in 224 availability of free printed copies of prospectus 224 submission of documents to competent authority in 219 European Economic Area inclusion within 21516 prospectuses approved outside 2256 prospectuses approved within 225
387
Index
Liechtenstein (cont.) exemptions from prospectus requirement 21920 exemption from requirement for summary 221 failure by competent authority to respond does not mean approval of request 218 false information, liability for damages for 228 filing of approved prospectus 219 final price and amount of securities offered, publication of 2201 fines for breach of regulations 217, 2267 format of prospectus 2212 free printed copies of prospectus alongside electronic version, availability of 224 German language, official status of 223 German prospectus legislation as model 216 home-contracting party choice of 223 definition of 223 home-Member State, choice of 223 implementing the Directive impact 2289 legislation 21516 incomplete documents 218 incorporation of information by reference 222 investors right to withdraw acceptance of offer 222 judicial offences 2267 language requirements 222 legislation implementing the Directive 21516 liability see prospectus liability merger, exemption from prospectus requirement for securities offered in connection with 219
multiple-document prospectus 222 mutual fund, definition of 228 newspapers, publication in 224 notice of availability of prospectus 224 obligation to implement Directive 21516 offers of securities to the public approval procedures 21718 definition of public offer 21718 official gazette, publication in 224 notice of availability of prospectus 224 notice of publication of supplement 222 omission of information, authorised 220 passported prospectuses 219, 2256 persons responsible for prospectus, identification in prospectus 227 printed format, publication in 224 free copies alongside electronic version 224 prohibition/suspension of transaction 217 prospectus liability 2278 approval of prospectus no guarantee for issuer against 218 publication of prospectus 224 publication of supplement 222 registration document 222 responsible persons, identification in prospectus 221, 227 sanctions 2267 securities and transactions not subject to Directive 228 securities note 222 signature of offeror on prospectus, requirement for 221 single-document prospectus 2212
388
Index
basic prospectus as 222 size of offer or value of securities, rules relating to exemption from requirement for summary 221 exemptions from prospectus requirement 219, 220 summary of prospectus 221 corrections by supplement 222 language requirements 2234, 225 in multiple-document prospectus 222 in single-document prospectus 2212 supplement to prospectus 222 suspension of transaction 217 time limits appeals 220 approval of supplement 222 decision to approve/reject prospectus 218 filing of approved prospectus 219 investors right to withdraw acceptance of offer 222 notification of incomplete documents 218 publication of prospectus 224 transfer of competence by competent authority 219 transactions not subject to Directive 228 transfer of competence by competent authority 219 value of securities see size of offer or value of securities, rules relating to website, publication on competent authoritys 224 Malta advertisements 1434 agent, signing of prospectus on behalf of directors by 139 appeals 144 approval procedures 1389
availability of prospectus 142 base prospectus 141 supplement to 141 certificate of approval 140 choice of single or multi-document format 141 collective investment schemes, exemption from prospectus requirement for 138 companies legislation, amendment by Directive 135 company, definition of 144 competent authority 136 publication of prospectus on website 142 content of prospectus 141 copies of documents to be identical to original approved version 143 directors obligation to sign prospectus 139 electronic format, publication in 142 availability of free printed copies 143 employee share offers, exemption from prospectus requirement for 137 English, documents in 140, 1412 exemptions from prospectus requirement 1378 existing shareholders, exemption from prospectus requirement for offers to 137 final terms, disclosure and filing of 141 Financial Services Tribunal 147n15 appeals to 144 format of prospectus 141 home Member State, location of 139 implementing the Directive 1345 impact 135, 146 incomplete documents 139 investment advertisements 1434 issue of shares following notice of issue of prospectus 142 language requirements 141
389
Index
Malta (cont.) legislation for securities regulation 135 liability see prospectus liability Listing Rules amendment by Directive 136 regulation of prospectuses 147n6 merger, exemption from prospectus requirement for securities offered in connection with 137 multiple-document prospectus 141 notice of issue of prospectus, issue of shares following 142 offers of securities to the public 1368 original approved version, copies of documents to be identical to 143 passported prospectuses 140, 145 printed format, publication in 143 prospectus, definition of 144 prospectus liability 1445 public offer, definition of 136 publication of prospectus 1423 registration document 141 same class, exemption from prospectus requirement for shares of 137 sanctions 1456 securities note 141 separate documents, prospectus in separate publication of documents 143 single-document prospectus 141 size of offer or value of securities, rules relating to exemption from prospectus requirement 146n2 language requirements 142 location of home Member State 139 summary of prospectus 141 liability on basis of 145 notice of liability in 145 translation of 140 supplement to prospectus 141 translation of 140
takeover, exemption from prospectus requirement for securities issued in connection with 137 time limits availability of prospectus 142 issue of shares following notice of issue of prospectus 142 notification of decision to approve/ reject prospectus 138 notification of incomplete documents 139 passporting applications 140 translation of summary and supplement 140 underwriting agreement, exemption from prospectus requirement for invitation to enter 137 value of securities see size of offer or value of securities, rules relating to website, publication on competent authoritys 142 Romania admissions to trading on a regulated market approval procedures 1512 exemptions from prospectus requirement 1512 advertisements 1545 appeals 150 approval and appeal procedures 1502 time limit for approval of advertisements 154 base prospectus 153 publication of final terms 155 choice of single or multi-document format 153 claim for damages, time limits for 157 competent authority 14950 publication of prospectus on website 154 time limit for decision to approve/ reject prospectus 150 content of prospectus 152
390
Index
criminal penalties 1567 directors shares, exemption from prospectus requirement for 151 electronic format, publication in 154 employee share offers, exemption from prospectus requirement for 151 exemptions from prospectus requirement admissions to trading on a regulated market 1512 offers of securities to the public 151 existing shareholders, exemption from prospectus requirement for offers to 1512 final price and amount of securities offered, publication of 152, 155 fines for breach of regulations 156 format of prospectus 153 implementing the Directive 1489 impact 158 inaccurate, incorrect or misleading information, persons liable for 1578 investors right to withdraw acceptance of offer 152 language requirements 153 legislation for securities regulation 149 legislation implementing the Directive 1489 liability see prospectus liability listed companies making multiple offerings 153 merger, exemption from prospectus for securities offered in connection with 151 misleading information, persons liable for 1578 multiple-document prospectus 153 multiple offerings by listed companies 153 newspapers, publication in 154
notice of availability of prospectus 154 number of securities offered, publication of final 152 offeror presentation document 153 multiple offerings by listed companies 153 offers of securities to the public appeals 150 approval procedures 150 exemptions from prospectus requirement 151 passported prospectuses 155 persons liable for inaccurate, incorrect or misleading information 1578 persons responsible for prospectus 157 printed format, publication in 154 prospectus liability 1578 publication of prospectus 154 qualified investors, exemption from prospectus requirement for offers to 151 sanctions 1557 securities and transactions not subject to Directive, rules for 158 securities note 153 multiple offerings by listed companies 153 single-document prospectus 153 size of offer or value of securities, exemptions from prospectus requirement relating to 151 substitute shares, exemption from prospectus requirement for 151 summary of prospectus 153 liability based on 157 multiple offerings by listed companies 153 supplement to prospectus 153 time limits approval of advertisements 154 claim for damages 157 decision to approve/reject prospectus 150
391
Index
Romania (cont.) investors right to withdraw acceptance of offer 152 validity of prospectus 152 transactions not subject to Directive, rules for 158 validity of prospectus 152 value of securities see size of offer or value of securities, rules relating to Slovenia admissions to trading on a regulated market admissions exempt from Directive 17880 securities already admitted to another regulated market 17980 advertisements 1712 prohibition/suspension of 174 annual update 1645 appeals 1656 approval procedures 1635 time limit for approval of supplement 169 approval/rejection of prospectus by competent authority, decision for 163 banks, exemption from prospectus requirement for securities issued by 176 base prospectus 168 definition of 166 validity of 1645 central banks of Member States, exemption from prospectus requirement for securities issued by 176 choice of single or multi-document format 168 collective investments (nonclosed-end), Directive not applying to 175 competent authority 162 decision to approve/reject prospectus 163
liability of 175 notification of incomplete documents by 163 publication of prospectus on website 1701 register of qualified investors 162 register of securities documentation 1701 transfer of competence 163 content of prospectus 1668 converted shares, exemption from Directive 179 criminal penalties 174 debt securities, definition of 162 debt securities issued by banks not subject to Directive 176 defences to prospectus liability 175 definitions introduced by the Directive 1612 demerger, exemption for securities offered in connection with exemption from Directive 179 demerger, exemption from prospectus requirement for securities offered in connection with 178 directors shares, exemption from prospectus requirement for 178 electronic format, publication in 1701 employee share offers exemption from Directive 179 employee share offers, exemption from prospectus requirement for 178 equivalent information, authorisation of 166 Euro adoption of 160 exchange rate with Tolar 180n1 exempt securities 1778 exempt transactions 177 exemptions
392
Index
admissions to trading on a regulated market 17880 securities already admitted to another regulated market 17980 notice of intention to rely on 177, 178, 180 filing of approved prospectus 164 final price and amount of securities offered, publication of 166 financial services companies as qualified investors 1612 fines for breach of regulations 174 first and further sale of securities, definition of 161 format of prospectus 168 free printed copies of prospectus alongside electronic version, availability of 171 free shares, exemption from prospectus requirement for 178, 179 further sales of securities, approval and publication of prospectus prior to 1645 implementing the Directive impact 180 incomplete documents 163 incorporation of information by reference 167 separate publication of documents 171 investment companies as qualified investors 162 investors right to withdraw acceptance of offer 169 prohibition/suspension of transaction, following 174 language requirements 16970 summary of prospectus 180 legislation implementing the Directive 1602 for securities regulation 15960
liability 175 Member States, exemption from prospectus requirement for securities guaranteed by 176 merger, exemption for securities offered in connection with exemption from Directive 179 merger, exemption from prospectus requirement for securities offered in connection with 178 multiple-document prospectus 168 separate publication of documents 171 validity of registration document 1645 natural persons as qualified investors 162 newspapers, publication in 170 non-profit organisations, exemption from prospectus requirement for securities issued by 180n4 notice of availability of prospectus 171, 180 notice of intention to rely on exemption 177, 178, 180 offering programme, definition of 161 offers of securities to the public, definition of 161 omission of information, authorised 1667 passported prospectuses 1723 persons responsible for prospectus 175 printed format, publication in 170 free printed copies of prospectus alongside electronic version, availability of 171 prohibition/suspension of transaction 174 prospectus liability 175 public bodies as qualified investors 162
393
Index
Slovenia (cont.) securities not subject to Directive 176 publication of prospectus 1701 prior to further sales of securities 1645 qualified investors definition of qualified investor 1612 offers to, exempt from Directive 177 register of qualified investors 162 register of securities documentation 1701 registration document, validity of 1645 rejection of prospectus, grounds for 164 responsible persons 175 same class, exemption from prospectus requirement for shares of 178 sanctions 1734 securities and transactions not subject to Directive 160, 1756 securities note 1645 simplified prospectus 168, 176 single-document prospectus 168 size of offer or value of securities, rules relating to debt securities issued by banks not subject to Directive 176 language of prospectus 170 requirement for summary of prospectus 167, 168 securities and transactions not subject to Directive 160 simplified prospectus 168, 176 transactions not subject to Directive 177 small- and medium-sized enterprises (SMEs) as qualified investors 162 substitute shares exemption from Directive 178
substitute shares, exemption from prospectus requirement for 177 summary of prospectus content of 1678 language requirements 181n8 liability based on 175 in multiple-document prospectus 1645 notice of availability of prospectus 180 supplement to 169 translation of 169 when not required 168 supplement to prospectus 1645, 166, 169 base prospectus 168 suspension of transaction 174 takeover, exemption from prospectus requirement for securities issued in connection with 177, 178 time limits approval of supplement 169 decision to approve/reject prospectus 163 filing of approved prospectus 164 investors right to withdraw acceptance of offer 169, 174 notice of intention to rely on exemption 177, 178, 180 notification of incomplete documents 163 prohibition/suspension of transaction 174 transfer of competence by competent authority 163 validity of prospectus 1645 base prospectus 1645 registration document 1645 Tolar (former Slovenian currency), replacement by Euro 160 rate of exchange at changeover 180n1 transactions not subject to Directive 160
394
Index
transfer of competence by competent authority 163 validity of prospectus 1645 base prospectus 1645 value of securities see size of offer or value of securities, rules relating to Spain admissions to trading on a regulated market, exemptions from prospectus requirement 187 advertisements 190 approval and appeal procedures 1857 banks as qualified investors 186 base prospectus 189 choice of single or multi-document format 188 collective investment schemes as qualified investors 186 competent authority 185 content of prospectus 1878 continuous or regular basis, securities issued on base prospectus for 189 exemption from prospectus requirement 187 converted shares, exemption from prospectus requirement for 187 credit institutions, exemption from prospectus requirement for shares issued by 187 defences to prospectus liability 193 directors shares, exemption from prospectus requirement for 187 electronic format, publication in 190 employee share offers, exemption from prospectus requirement for 187 English, documents in 18990 exemptions from prospectus requirement 1867
increased scope of private placement exemptions 186 fixed income securities, detailed prospectus template for 1878 format of prospectus 188 free shares, exemption from prospectus requirement for 186 further guidance on Directive 1834, 194n12 identification in prospectus of responsible persons 193 implementing the Directive impact 184, 194 individual persons as qualified investors 186 insurance companies as qualified investors 186 investment firms as qualified investors 186 investors right to withdraw acceptance of offer 189 issuer assumes prospectus liability in place of offeror 193 language requirements 18990 requirement for translation of summary 188 legislation for securities regulation 1823 legislation implementing the Directive 1834 length of summary 188 merger, exemption from prospectus requirement for securities offered in connection with 186 multiple-document prospectus 188, 1889 newspapers, publication in 190 no prospectus to passport, exemption from prospectus requirement where 187 notice of availability of prospectus 190 offerors exemption from prospectus liability 193
395
Index
Spain (cont.) offers of securities to the public definition of public offering of securities 1856 omission of information, authorised 188 passported prospectuses 1901 no prospectus to passport, exemption from prospectus requirement where 187 requirement for translation of summary 190 pension funds as qualified investors 186 persons responsible for prospectus 192 printed format, publication in 190 private placement exemptions, increased scope of 186 prohibition/suspension of transaction 1912 prospectus liability 1923 public bodies exemption from prospectus requirement for securities issued or guaranteed by 187 as qualified investors 186 publication of prospectus 190 qualified investors definition of 186 offers to 1856 register of qualified investors 186 registration document 1889 regular or continuous basis, securities issued on base prospectus for 189 exemption from prospectus requirement for shares issued on 187 resales of securities as separate offers 186 responsible persons 192 same class, exemption from prospectus requirement for shares of 187 sanctions 1912
securities and transactions not subject to Directive 1934 securities note 188, 189 separate offers, resales of securities as 186 single-document prospectus 188 size of offer or value of securities, rules relating to exemption from requirement for translation of summary 190 offers that are not public offerings 185 requirement for summary of prospectus 188 requirement for translation of summary 188 small- and medium-sized enterprises (SMEs) as qualified investors 186 statute of limitations for prospectus liability 193 substitute shares, exemption from prospectus requirement for 186 summary of prospectus 188, 189 liability on basis of 193 requirement for translation of summary 190 supplement to prospectus 189 takeover, securities offered in connection with, exemption from prospectus requirement for 186 templates for prospectuses, production of more detailed 1878 time limits approval of supplement 189 investors right to withdraw acceptance of offer 189 prohibition/suspension of transaction 1912 statute of limitations for prospectus liability 193 validity of prospectus 188 validity of registration document 189
396
Index
transactions not subject to Directive 1934 validity of prospectus multiple-document prospectus 188 registration document 189 single-document prospectus 188 value of securities see size of offer or value of securities, rules relating to Sweden admissions to trading on a regulated market, exemptions from prospectus requirement 1989 approval and appeal procedures 1969 supplement to prospectus 199 choice of single or multi-document format 199 competent authority 196 content of prospectus 199 converted shares, exemption from prospectus requirement for 198 directors shares, exemption from prospectus requirement for 197, 198 employee share offers, exemption from prospectus requirement for 197, 198 exemptions from prospectus requirement 1969 final price and amount of securities offered, publication of 199 format of prospectus 199 free shares, exemption from prospectus requirement for 197, 198 investors right to withdraw acceptance of offer 199 language requirements 200 legislation implementing the Directive 195 merger, exemption from prospectus requirement for securities
offered in connection with 197, 198 multiple-document prospectus 199 obligation to publish a prospectus 196 offers of securities to the public definition of offered to the public 196 exemptions from prospectus requirement 197 optional publication of prospectus 199 registration document 199 same class, shares of, exemption from prospectus requirement for 198 securities note 199 simplified prospectus 199 single-document prospectus 199 size of offer or value of securities, rules relating to exemptions from prospectus requirement 1967 exemptions from prospectus requirement for 197 language requirements 200 substitute shares, exemption from prospectus requirement for 197, 198 summary of prospectus 199 supplement to prospectus 199 takeover, exemption from prospectus requirement for securities issued in connection with 197, 198 value of securities see size of offer or value of securities, rules relating to voluntary publication of prospectus 199
397

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Prospectus for the Public Offering of Securities in Europe

Law Practitioner Series

Prospectus for the Public Offering of Securities in Europe

CAMBRIDGE UNIVERSITY PRESS

eBook (EBL) hardback

Contributors vii Preface ix dirk van gerven, NautaDutilh

Part IV Annexes Annex I Annex II Annex III Index

233 260 365 372

PA RT I I Application in the EU Member States

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Procedure of prior approval and appeal Offer of securities to the public

Prospectus for the Public Offering of Securities in Europe

Admission to trading on a regulated market

Content and format, language and supplements of the prospectus Content

Prospectus for the Public Offering of Securities in Europe

Publication and advertisements Method of publication

Prospectus for the Public Offering of Securities in Europe

Use of prospectus approved in other (non-EU and non-EEA) countries

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Contents of the prospectus

Prospectus for the Public Offering of Securities in Europe

Prospectuses consisting of separate documents

Updates, amendments and supplements

Prospectus for the Public Offering of Securities in Europe

Approval of the prospectus Competency

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Offer or admission to trading in more Member States

Prospectus for the Public Offering of Securities in Europe

Powers of the Commission

Prospectus for the Public Offering of Securities in Europe

Disclosure of information General

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Competence of the Commission

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Prior approval and appeal procedures Offering of securities to the public

Prospectus for the Public Offering of Securities in Europe

Admission to trading on a regulated market

Content and format, language and supplements of the prospectus Content

Prospectus for the Public Offering of Securities in Europe

Publication and advertisements Method of publication

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Use of a prospectus approved in other (non-EU and non-EEA) countries

Prospectus for the Public Offering of Securities in Europe

Hannes Snellman, Attorneys-at-law Ltd

VII VIII IX X XI XII XIII XIV

Prospectus for the Public Offering of Securities in Europe

Prior approval of the competent authority Competent authority

Prospectus for the Public Offering of Securities in Europe

Prospectus for the Public Offering of Securities in Europe

Publication and advertisements