The EU prospectus regime harmonises requirements for the drafting, approval, and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market in an EU Member State.
The regime is designed to reinforce investor protection by ensuring that all prospectuses, wherever issued in the EU, provide clear and comprehensive information while at the same time making it easier for companies to raise capital throughout the EU on the basis of approval from a single competent authority.
Within these objectives, ESMA’s work in the prospectus area aims to: 1) promote a practical and efficient implementation of the prospectus regime; 2) contribute to a consistent application of the regime across the EU by building a common supervisory culture among competent authorities; and 3) ensure an adequate balance between an investor’s need for information and burdens on issuers to provide such information.
The PD empowers ESMA to propose regulatory technical standards (RTS) and implementing technical standards (ITS). Furthermore, the European Commission may request ESMA to provide technical advice for the adoption of Commission delegated acts.
ESMA also works to ensure supervisory convergence in this area by making use of a number of tools such as Q&As, guidelines and opinions
In terms of Regulatory Technical Standards (RTS), ESMA has delivered the following:
- Regulatory Technical Standards for publication of supplements to the prospectus, and
- Regulatory Technical Standards for approval and publication of the prospectus and dissemination of advertisements.
Guidelines, Opinions and Q&As
The opinion sets out ESMA’s view that the overall prospectus regime does not provide the necessary legal framework for the possibility of a tripartite base prospectus. Changes to both the Prospectus Directive and Regulation, other than those amendments introduced by Directive 2010/73/EU, would have been required to facilitate such a construct.
The opinion explains a framework for third country share prospectuses under Article 20 and sets out the role of the EU Member States’ competent authorities in scrutinising prospectuses under these arrangements.
The opinion sets out additional information that ESMA considers relevant that would need to be included in a wrap to a prospectus drawn up according to Israeli laws and regulations in order to make it equivalent with the requirements under the Prospectus Directive (PD). The assessment is based on the opinion regarding the framework for the assessment of third country prospectuses under Article 20 of the Prospectus Directive.
The European Securities and Markets Authority (ESMA) has reviewed Turkish legislation governing prospectus disclosure requirements and concludes that a prospectus drawn up against Turkish requirements can constitute a valid prospectus under the Prospectus Directive for the purposes of its approval by the home competent authority of a Member State.
The purpose of the Q&A document is to promote common supervisory approaches and practices in the application of the PD and its implementing measures. This is achieved by providing responses to questions received by the general public and competent authorities in relation to the practical application of the PD. The Q&A is aimed at competent authorities who carry supervisory responsibility under the PD and aims at ensuring convergence in supervisory activities across the EU.