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ESMA adds new Q&A on profit forecasts

28 March 2018

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers document on prospectus related issues to include a new Q&A on profit forecasts.   

The new Q&A provides clarification on how to identify profit forecasts in the context of prospectuses, notably by explaining the definition included in the Prospectus Regulation No 809/2004 and by providing examples on what may or not constitute a profit forecast.

The purpose of this Q&A is to enhance supervisory convergence in the area of prospectus approval. It is aimed at competent authorities as well as market participants in order to promote a uniform application of the requirements applicable to profit forecasts.

The purpose of the Q&A document on prospectus related issues is to promote common supervisory approaches and practices in the application of the Prospectus Regulation No 809/2004.

ESMA notes that although the Prospectus Regulation (EU) 2017/1129 will become applicable on 21 July 2019, repealing Prospectus Regulation 809/2004, the definition of a profit forecast should be carried over to the new prospectus regime.

The Prospectus Directive aims at ensuring investor protection and market efficiency, in accordance with high regulatory standards adopted in the relevant international fora.

ESMA will periodically review these Q&As and update them where required.