ESMA Proposes Simplification of Prospectus Regulation

July 2017

The European Securities and Markets Authority (ESMA) has published three Consultation Papers proposing simplification of the Prospectus Regulation. Each Consultation Paper includes proposals for different aspects of the Prospectus Regulation. The objective of the proposals is to provide companies, particularly smaller companies, with easier and less expensive access to capital and to make prospectuses more accessible to investors.

Comments on the Consultation Papers are due by 28 September 2017. ESMA plans to deliver the technical advice to the European Commission by 31 March 2018.

The Consultation Papers include: 

  •  Draft technical advice on format and content of the prospectus 
  • Draft technical advice on content and format of the EU Growth prospectus 
  • Draft technical advice on scrutiny and approval of the prospectus.

The Draft technical advice on format and content of the prospectus provides targeted relief from the general prospectus requirements, including: removal of the requirement for a report by auditors or independent accountants on profit forecasts; a new Universal Registration Document with reduced disclosures; and alignment of requirements and terminology with other directives.

The Draft technical advice on content and format of the EU Growth prospectus simplifies requirements applicable to the small and medium enterprise focused EU Growth prospectus. It covers: minimum disclosure requirements; an order of presentation; and the specific summary. This Consultation Paper adapts disclosure items to the size of an issuer and the complexity of its operations. The requirements provide for separate schedules for (a) registration document information and (b) information about the securities. This procedures is designed for issuance of both equity and non-equity securities.

The Draft technical advice on scrutiny and approval of the prospectus includes guidance for use by national authorities with competencies in securities markets (NCAs) on standard criteria for scrutiny of the completeness, comprehensibility, and consistency of the prospectus. Beyond these standard criteria, it provides NCAs with flexibility in evaluating a prospectus.

The Consultation Papers are available on this link.

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