The new EU Prospectus Regulation: what do you need to know now?
The new EU Prospectus Regulation was published in the EU Official Journal today and will enter into force on 20 July 2017. Although the majority of the Regulation’s provisions will apply from 21 July 2019, two key provisions will apply immediately:
- The exemption under the existing regime allowing issuers of shares to admit to trading on a regulated market up to 10% of the number of shares of the same class as shares already admitted, over a 12-month period, without a prospectus, will change to: (a) increase the threshold from 10% to 20%; and (b) cover both equity and non-equity securities fungible with securities already admitted to trading. The public offer exemptions from the requirement to produce a prospectus will remain broadly the same.
- A new cap is introduced for the listing of shares resulting from the conversion or exchange of other securities without a prospectus – under the new regime, issuers may only admit up to 20% of the same class of shares already admitted to trading over a 12-month period (subject to certain carve outs).
The Regulation restricts the use of both exemptions in combination if this would lead to more than 20% of the same class of shares being admitted to trading over a 12-month period. This restriction will not enter into force until 21 July 2019.