ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (72)835
Vol.1972/0095

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
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COMMISSION OPTHEEOHOPEAI •COHHUIITIES
COM(72)835final
•.Brussels,26September1972
PROPOSAL FORACOUNCILDIRECTIVE
concerningthecontent,checkingand.distribution oftheprospectustobe
publishedwhensecuritiesissuedbycompanieswithinthemeaningofArticle
58paragraph2oftheTreatyareadmittedtoofficialstockexchangequotation
DRAFTCOUNCILRECOMMENDATION
fconcerningthecontentsoftheprospectustobepublishedwhensecurities
issuedbytheStatesortheirlocalauthoritiesareadmittedtoofficial
stockexchangequotation
(submittedtotheCouncilbytheCommission)
CCtl(72)835final

Contents
Page
I.ProposalforaCouncilDirective ........ 5
II.ScheduleA 20
III.'ScheduleB....... ......33
IV.ScheduleC..~....k......45
V.ExplanatoryMemorandum ..........47
VI.DraftRecommendation oftheCouncil.' '67
S.8/72 -• 3

PROPOSAL FORACOUNCILDIRECTIVE

TheCounciloftheEuropeanCommunities
HavingregardtotheTreatyestablishingtheEuropeanEconomicCommunity
and,inparticular,Article54.3g.thereof,
HavingregardtotheproposalfromtheCommission,
HavingregardtotheOpinionoftheEuropeanParliament,
HavingregardtotheOpinionoftheEconomicandSocialCommittee,
Whereastheenlargementofthesizeofthemarketinwhichenterprisesoperate
tothedimensions .oftheCommunityinvolvesaparallelwideningoftheir
financialrequirementsandofthecapitalmarketsonwhichtheymustcallto
satisfythese,andwhereasadmissiontothestockexchangesofseveralMember
Statesoftransferablesecuritiesissuedbycompaniesandotherlegalpersonsin
publicandprivatelawconstitutesanimportantmethodofaccesstothese
capitalmarkets,andwhereasfurthermoreexchangerestrictionsonthe
purchaseoftransferablesecuritiesnegotiatedonthestockexchangesofanother
MemberStatehavebeeneliminatedaspartoftheliberalizationofcapital
movements ,
"Whereassafeguardsfortheprotectionoftheinterestsofcompanymembers
andthirdpartiesinvestingwhosesavingsaresoughtarerequiredinmostof
theMemberStatesofenterpriseswhichmakepubliccallonsavings,sometimes
immediatelythesecuritiesareissuedandinanycaseatthetimeoftheir
admissiontoofficialstockexchangequotation,andwhereasthesesafeguards
restontherequirementthatinformationwhichisadequateandasobjectiveas
possiblemustbefurnishedconcerninginparticularthefinancialsituationof
theissuingenterpriseandthefeaturesofthesecuritiesforwhichquotationis
requestedandwhereastheformunder'whichthisinformationisrequired
usuallyconsistsofthepublicationofaprospectus,
"Whereasatthesametimethesafeguardsthusrequireddivergefromone
membercountrytoanother,bothasregardsthecontentsandthelayoutofthe
prospectusandtheefficacity,methodsandtimingofthecheckonthe
adequacyandsufficiencyoftheinformationgiven,andwhereastheeffectof
thesedivergenciesisnotonlytomakeitmoredifficultforenterprisestoobtain
admissiontothestockexchangesofseveralMemberStatesbutalsotohinder
theacquisitionbysaversresidinginaMemberStateofsecuritiesquotedon
thestockexchangesoftheotherMemberStatesandthustoinhibitthe
financingoftheenterprisesandinvestmentbysaversthroughoutthe
Community,
"Whereasthesedivergenciesshouldbeeliminatedbycoordinatingtherulesand
regulationswithoutnecessarilymakingthemcompletelyuniform,inorderto
achieveanadequatedegreeofequivalenceinthesafeguardsofferedineach
MemberStatetoensuresufficientandobjectiveinformationforcompany
membersandthirdpartieswhoarepresentorpotentialsecurityholders,and
S.8/72 7

whereasatthesametime,takingintoaccountontheonehandthepresent
degreeofliberalizationofcapitalmovementsintheCommunityandonthe
otherthefactthatamechanismforcheckingatthetimethesecuritiesare
issueddoesnotyetexistinalltheMemberStates,itwouldappearsufficientat
presenttolimitthenecessarycoordinationtotheconditionsforadmissionof
suchsecuritiestoofficialstockexchangequotation,■
Whereas'theenterprisesintheMemberStateswhichrequestthequotationof
securitiesthattheyissueareallcompaniesorotherlegalpersonsinpublicor
privatelawwithinthemeaningofArticle58(2)oftheTreatysothatthe
coordinationofthesafeguardswhicharemadecompulsoryfortheminthe
fieldofthisDirectivecomesunderArticle54.3g.;andwhereasthese
safeguards,becauseoftheirobjectivecharacterandtheirnatureasrulesfor
theprotectionofsavingsandfortheproperfunctioningofthestock
exchanges,mustnecessarilyalsoapplytoapplicationsforadmissionto
quotationonastockexchangeintheCommunityofthesecuritiesissuedby
enterprisesofthirdcountries,andwhereastheprovisionsofthisDirectivemust
consequentlyalsoconcerntheinformationrequiredoftheseundertakingsin
theformofprospectusesandthecheckingofthisinformation,
HasadoptedthisDirective:
SectionI:Generalrulesandfieldofapplication
Article1:Requirementofissuingaprospectus •
1.MemberStatesshallensurethat,beforesecuritiesareadmittedtoor
introducedforofficialquotationonastockexchangesituatedwithintheir
territory,aprospectuscheckedbyanauthorityappointedforthispurposeis
publishedormadeavailabletothepublic.
2.Notwithstanding theforegoing,securitiesissuedbyopen-endinvestment
companiesandunittrusts,i.e.organisationswhosesecuritiesareissuedina
continuousfashionorincloselyspacedtranchesand/orareboughtbackor
redeemeddirectlyorindirectlyattherequestoftheholderoutoftheirassets,
shallbeexcludedfromthefieldofapplicationofthisDirective.
3.'TheobligationsofthisDirectiveshallnotapplyeithertosecurities
issuedbytheStatesortheirlocalauthorities.
Article2:Contentsoftheprospectus
TheprospectusmentionedinArticle1abovemustcontainallinformation
which,accordingtotheparticularnatureoftheissuerandthesecuritiesin
8 S.8/72

question,arenecessarytoenableinvestorsandtheirinvestmentadvisersto
formawell-foundedopiniononthenetworth,financialsituation,resultsand
prospectsoftheissuerandalsoontherightspertainingtothesecuritiesfor
whichapplicationforadmissionisbeingmade.
Article3:Obligationtofollowtheschemesofpresentationsetoutinthe
Schedules
1.InordertoachievetheresultenvisagedinArticle2,MemberStatesshall
ensurethattheadmissionprospectuscontains,,inaseasilyanalysableand
comprehensible aformaspossible,atleastthoseitemsofinformationthatare
listedinSchedulesA,BorCannexedtothepresentDirective,dependingon
whethershares,debentures 1orcertificatesrepresentingsharesareinvolved.
Theschemesofpresentationinquestionareapplicableinconjunctionwiththe
exceptionoptionsprovidedforinArticles4and5.
2.InthespecificcasesmentionedinArticles6-12theprospectusshallbe
drawnupinaccordancewiththeindicationslaiddowntherein.
3.IncaseswherecertainheadingsoftheSchedulesareinappropriatetothe
issuers'sphereofactivity,aprospectusgivingequivalentinformationshallbe
drawnupbyadaptingtheheadingsinquestion.
Article4:Righttowaivepublicationofaprospectusorcertainofitsheadings
1.MemberStatesmay,underconditionsdeterminedbythem,waive
publicationofaprospectusdrawnupinaccordancewiththeannexedschemes
ofpresentation,ormayevenprovideforcompleteexemptionfromthe
requirementofissuingaprospectuswhentheapplicationforadmissionisin
respectofthesecuritiesdetailedbelow:
(a)securitiesforwhich,withinamaximumofsixmonthspriortothe
applicationforadmission,anissueprospectuswaspublishedinthesame
membercountryinconnectionwithapublicissue,providedthatthe
prospectuswasdrawnupinconformitywiththeprovisionsofthepresent
DirectiveandcanbeheldtobeequivalenttotheEuropeanadmission
prospectus;insuchacase,theup-datirigofthatprospectusmayifnecessarybe
calledfor;
(b)securitiesalreadyadmittedtoofficialquotationonanotherstock
exchangeinthesamemembercountry,providedthataprospectushasalready
beenpublishedwhichcomplieswiththepresentDirective;
1"Debenture"includesdebenturestock,loanstock,bondsandanysimilarsecuritiesofa
companywhetherconstitutingachargeontheassetsofthecompanyornot(Translater's
note).
S.8/72 9

(c)shares(includingshareshavingnocapitalvalue)allotted,consequent
uponthecapitalisationofreserves,issuepremiums,revaluationsurplusesor
profits,toholdersofsharesofthesamecategoryalreadyquotedonthesame
stockexchange;
(d)sharesresultingfromtheconversionofconvertibledebentureswhenthese
convertibledebenturesandsharesofthesamecategoryasthoseofferedbyway
ofconversionarealreadyquotedonthesamestockexchange;
(e)sharesissuedinconnectionwiththeexerciseofwarrants,whenthe
debenturestowhichtheywereattached,aswellassharesofthesamecategory
asthoseofferedtoholdersofthewarrants,arealreadyquotedonthesame
stockexchange;
(f)supplementary certificatesrepresentingsharesissuedinexchangefor
originalsecurities,wherethereisnoincreaseofcapital,whenthecertificates
arealreadyquotedonthesamestockexchange.
(g)anumberofsecuritiesamountingtolessthan5%ofthenumberof
securitiesofthesamecategoryalreadyadmittedtoquotationonthesame
stockexchange,providedthattheaggregatemarketvalueoftheadditional
securitiesdoesnotexceed500000unitsofaccountoveraperiodoftwoyears.
2.WhereMemberStatesintendtoavailthemselvesofthisexemption
option,theymustnotifytheCommission,atthelatestbytheexpiryofthe
time-limitfixedinArticle20(1),ofthecasesinwhichtheyintendtokeepthis
optionavailableand,whereappropriate,oftheparticularprovisionstheyare
establishingfortheschemeofpresentation .-When,inthesesamecases,
circumstances relatingtothecreationofextrasecuritiescallforspecial
informationtheMemberStatesmustneverthelessprescribethepublicationof
thenecessaryinformation ., ■ .
Article5:Dispensationfromtheprovisionsofcertainheadingsintheannexed
Schedules
TheauthoritiesofMember.Statesmaydispensetheissuerfrompublishing
certaininformationlaiddownintheScheduleswhen,intheparticular
circumstances .oftheissuerconcerned :
1..thisinformationhasnomorethanminimalimportanceandisnotlikely
toinfluenceassessmentofthenetworth,financialposition,resultsand
prospectsoftheissuer;
2.thedisclosureofthisinformationwouldbecontrarytothepublic
interestorwouldbeseriouslydetrimentaltotheissuer,providedthat
non-publication isnotlikelytomisleadthepublicwithregardtothefactsand
circumstances essentialforassessmentofthesecuritiesinquestion.
10 S.8/72

SectionII:Contentoftheprospectusinspecialcases
Article6:Financialinstitutions
i
1.Uponadmissiontoquotationforsecuritiesissuedbyfinancial
institutions,theprospectusmustcontainatleasttheitemsofinformation
specifiedinChapters1,2,3,5and6ofSchedulesAorB,accordingasshares
ordebenturesareinvolved.
2.Inaddition,itmustcontaininformationadaptedtothecharacteristicsof
theissuersinquestionandequivalenttothatspecifiedinChapters4and7of
SchedulesAorBinaccordancewiththeruleslaiddownforthispurposeby
thecompetentnationalauthorities . '
3.'ItshallbeincumbentonMemberStatestodefinethefinancial
institutionsforwhichmodifiedschemesforthepresentationofprospectuses
willbelaiddown.-
ThesystemprovidedforbythisArticleforfinancialinstitutionsmaybe
extendedtoinvestmentcompaniesandcollectiveinvestmentfundsotherthan
thosecoveredinArticle1,to"pure"financecompanies (i.e.thoseengagingin
nootheractivitiesthanassemblingcapitaltomakeitavailabletoaparent
companyoracompanydirectlyorindirectlyaffiliatedwiththeparent
company)andto"pure"holdingcompanies (i.e.thosethatdonotengagein
anyotheractivitythanmanagingaportfoliooftransferablesecurities,licences
orpatents). ♦
Article7:Continuousorrepeatedloanissuesbyfinancialinstitutions
1.Inthecaseofbanks,savingsbanks,creditinstitutionsandmortgage
companieswhichpublishtheiraccountsregularly,whichwithinthe
Communityarecorporationsofpublic-lawstatusoraresubjecttopublic
supervisiondesignedtoprotectsavings,andwhichmakecontinuousor
repeatedissues,notlessthananaverageoftwiceayear,ofdebenturesfor
whichadmissiontoquotationissought,thecompleteprospectusdrawnupin
accordancewiththemethodlaiddownforfinancialinstitutionsinArticle6
needonlybepublishedeverythreeyears.Thissystemmaybeextendedto
coverDutchmortgagecompanies.'
2.Nevertheless,ontheoccasionofeachadmission,.thepublicationis
requiredofinformationconcerning,at'theleast,thesignatoriesofthe
prospectus,thetermsoftheloanandconditionsofthetransaction (Chapters1
and2oftheannexeddebenturesSchedule),togetherwithinformation
concerninganyeventsofimportanceforassessingthesecuritywhichhave
occurredsincethedateofthelatestannualstatementofaccounts.With
S.8/72 11

regardtothelatter,itmaybemadeavailabletothepublicatthebankswhich
areactingaspayingagents.
InthecaseofdebenturesissuedbytheItalianbanks'"specialsections"with
separatelegalpersonality (cartellefondiarieandotherlikesecurities),the
annualaccountsofthespecialsectionsmustbepublished,andnotthoseofthe
banksfromwhichtheystem.
Article8:Guaranteedloans 1
1.Inthecaseofloanscoveredbyathirdcompany'sguaranteeotherthan
intheformofmaterialsecurity,theprospectusmustcarryinformationas
specifiedinthedebenturesSchedule-concerningbothcompanieswhenthe
issuingcompanyandtheguarantorcompanyarespecificallyengagedin
industryandcommerce.
-Whenoneofthetwocompaniesisafinancialinstitution,thatpartofthefull
prospectuswhichrelatestothatcompanyshallbedrawnupinaccordance
withtheprovisionsofArticle6.
2.Inthecaseofloansissuedbya"pure"financecompanyhavingnoother
businessthanthatoftheissuingofloansandtheplacingofsuchfundsatthe
disposaloftheparentcompanyorothercompaniesaffiliatedtoit,the
prospectusmustinclude,fortheguarantorcompanies,theinformation
specifiedinthedebenturesScheduleexceptforChapter2and,fortheissuing
company,thatistosaythe"pure"financecompany,theinformationspecified
inChapters1,2and3andunderitems51and61ofthedebenturesSchedule.
Whenthereismorethanoneguarantor,theinformationspecifiedinthe
Scheduleisrequiredfromeach,buttheprospectusmaybeabridgedforthe
sakeofmakingiteasiertoread,pursuanttoinstructionsgivenbythe
authorities . •.
3.Forgroup-loans,informationconcerningalltheguarantorcompaniesis
requiredintheprospectus.Whenthesearetoonumerous,however,the
authoritiesshallhavediscretionarypowertoallow 1abridgementofthe
informationrequiredofeach.
4.Inallcasesofguaranteedloans,theguaranteecontractmustbeannexed
totheprospectusunlessitistoovoluminousordifficultforthepublicto
understand.Insuchacase,aresumeofthecontractmustbepublishedwhich
willallowanassessmenttobemadeofthenatureandscopeoftheguarantee,
whilstthecontractitselfmustbemadeavailabletothepublicatthepremises
ofthefinancialintermediaries throughwhomtherequestforadmissionis
made.
12 S.8/72

Article9:Convertibleloansorloanswithwarrantsattached
1.Whentherequestforadmissionrelatestoconvertibledebenturesorto
debenturescarryingwarrants,theprospectusmustcontaintheinformation
specifiedinthesharesScheduleandinChapter2ofthedebenturesSchedule,
1.e.informationrelatingtotheoperation,aswellasthesubscriptionor
conversionterms. .
2.WhentheissuerofthedebenturesisadifferentCompanyfromthat
whichissuestheshares,theprospectusmustcontaintheinformationspecified
inthedebenturesScheduleforthefirstcompanyandthatspecifiedinthe
sharesScheduleforthesecondcompany.
However,intheeventoftheissuerofthedebenturesbeinga"pure"finance
company,theprospectusneedcontain,inadditiontothesubscriptionor
conversionterms,onlytheinformationspecifiedinthedebenturesSchedulein
theabridgedformforthe"pure"financecompany,i.e.theinformation
specifiedinChapters1,2and3andunderitems51and61ofthedebentures
Schedule.
3.Whenthecurrencyoftheconvertibledebentureisdifferentfromthatof
theshares,theeffectsofanychangesincurrencyparitiesuponthetermsof
conversionoruponthetermsofsubscriptionmustbeindicated.
Article10:Admissiontostockexchangequotationofsecuritiesissuedin
connectionwiththemergingorsplittingofcompanies,thetransferofassetsor
apublicexchangeoffer -
1.Whentheapplicationforadmissionrelatestosecuritiesissuedin
connectionwithanoperationinvolvingthemergingorsplittingofcompanies,
thetransferofassetsorapublicexchangeoffer,andwhentheoperationtook
placewithinthelastthreeyears,theprospectusshallinclude,inadditionto
theinformationspecifiedinthesharesScheduleorinthedebenturesSchedule
asappropriate,thefollowingmaterialwhichmaybeinsertedorsimply
annexed:
(i)thedocumentspresentedtothegeneralmeeting,includingthereportof
themerger,thevaluationcriteriaandthejustificationfortheexchange
ratio;
(ii)theopeningbalancesheetshowingtheeffectsoftheoperationin
question;
(iii)informationrelatingtothefinancialbackgroundofeachofthe
companiesinvolved;thisinformationmaybebriefforcompanieswhich
arealreadyquoted.
S.8/72 13

2..Whenlessthansixmonthsbeforeadmissiontostockexchangequotation
equivalentandcheckedinformationhasbeenpublishedpriortoanoperation
ofthekindteferredtoinparagraph .1,theauthoritiesofMemberStatesmay
waivepublicationofaprospectusforadmissiontoquotation,providedthat
thisinformationismadeavailabletothepublic.
Article11:Certificatesrepresentingshares
1.Whentheapplicationforadmissionrelatestocertificatesrepresenting
shares,theprospectusmustcontaintheinformationspecifiedintheshares
Scheduleasregardsthesharesrepresented,andtheinformationspecifiedinthe
certificatesSchedule.
2.Nevertheless ,theauthoritiesmayallowtheissuerofthecertificatesto
dispensewiththepublicationofdetailsofitsfinancialpositionprovidedforin
theannexedSchedule,whentheissueris:
(i)abank,savingsbank,creditinstitutionormortgagecompanywhichis
quotedonastockexchange,whichpublishesitsaccountsregularlyand
whichwithintheCommunityisacorporationofpublic-lawstatusor
subjecttopublicsupervisionaimedatsafeguardingsavings;
(ii)oraninterprofessional organisationforthetransferofsecurities;
(iii)oratrusteeinstitutionsubjecttospecialregulationsforthesa'fecustody
oforiginalshares.
Article12:Issuersinthepublicsector .
1.Inconnectionwiththeadmissiontostockexchangequotationof
securitiesissuedbycorporatebodiesunderpubliclawwhichareengagedin
industrial,commercialorfinancialactivities,thegeneralruleslaiddownin
thisDirectiveshallapplywithonlysuchadaptationsastheparticularitiesof
theseenterprisesmayrequire.
2.Whentheseissuers,orthedebenturesissuedbythem,arecovered,both
astotheredemptionoftheloanandinterestpayment,bytheunconditional
andirrevocableguaranteeofaMemberState,thecompetentauthoritiesmay
simplifythatpartoftheprospectuswhichreferstotheissuerandtheissuer's
financialposition,while,atthesametime,endeavouring toinsistuponthe
publicationofthisinformationinaccordancewithsoundpracticeasadopted
ontheinternational market.
14 S.8/72

SectionIII:Arrangementsforenforcingtheprospectusrequirementsandfor
mikingitpubliclyavailable
Article13:Enforcementoftheprospectusrequirements
1.MemberStatesshallinstructoneormorenationalauthorities,publicor
private,tosupervisetheenforcementoftherulesinthepresentDirectiveand
shallnotifydieCommissionoftheseauthorities,givingdetailsofanydivision
ofresponsibilities amongthem.
2.Theprospectusmaynotbepublished,normayitbemadeavailableto
thepublic,beforeithasbeenpassedbythecompetentauthorityasreferredto
inparagraph1.
3.Thecompetentaudiorityshallgiveauthorisationfortheprospectustobe
publishedormadeavailabletothepubliconlyifitisoftheopinionthatthe
prospectussatisfiesalltherequirementsofthepresentDirective,andifithas
goodreasontobelievethatitcontainsnoparticularsoromissionslikelyto
misleadthepublic.
4.Inordertocarryouttheirtask,theauthoritiesappointedshallbe
endowedwithallthenecessarycompetenceandpowersofsupervision.In
particular,theymusthavethepowertorequiretheissuerofthesecuritiesfor
whichadmissiontoquotationissoughttofurnishalltheinformationandto
producealldiedocumentsnecessaryforthemtojudgewhetherornotthe
draftprospectusessubmittedtothemconformtotherequirementslaiddown
intheDirective,aswellaspowerstorequiretheprospectustobepresentedin
themannerbestsuitedtothecharacteristics ofdieissuerandofthesecurities.
Theymustalsobeprovidedwithpowertocheckwhetheranissuercomplies
withtheconditionslaiddownindieDirectiveforapartialortotal
dispensationfromsomeofitsrequirements .
Article14:Methodsofpublishingtheprospectus
1.Theprospectusforadmissiontoquotationmustbepublished:
(i)eitherbyinsertioninanofficialgazetteandinoneormoreother-
journals,
(ii)orbymakingavailabletothepublic,freeofcharge,copiesinpamphlet
formattheheadquartersofthestockexchangeorstockexchangeson
whichthesecuritiesarebeingadmittedtoquotationandattheofficesof
theissueraswellasoverthecountersofthebanksandother
intermediaries involvedintheapplicationforadmissionorinthe
placingofthesecurities.
S.8/72 15

2.'Thesetwomethodsmaybecombined.Incountrieswherepublication
ofaprospectusinthepressisprescribednotalltheinformationspecifiedin
theSchedulesannexedtotheDirectiveneedbepublishedinthepress,,subject
tothefollowingconditions:
(i)theinformationprescribedintheannexedSchedulesbutnotpublishedin
thepressmustbemadeavailabletothepublicinpamphletform;
(ii)thispamphletmustalwaysbeaccompaniedbyareprintofthedocument
publishedinthepress;
(iii)thedocumentpublishedinthepressmustmentionthepamphletand
muststatewheremembersofthepublicmayobtaintheinformation
documentinfull.
Finally,theapportionment oftheinformationbetweenthetwomethodsmust
becarriedoutinaccordancewiththestandardsfixedbylaworbythe
competentauthoritiesandundertheircontrol.
3.Itmustbemadecompulsoryfortheprospectusestobelodgedinplaces
andaccordingtoprocedureslaiddownbytheMemberStates.
ArticleIS:Deadlinesforpublishingtheprospectus
1.Whensharesareadmittedtoquotationtheprospectusmustbapublished
ormadeavailabletothepublicasearlyaspossibleandatleast-eightdays
beforethedateonwhichthesecuritiesadmittedtoquotationcanbethe
subjectofdealingsrecordedintheofficiallist.Thissameeight-dayminimum
requirementmustberespectedinthecaseofissuesofconvertibledebenturesor
debentureswithwarrantsattachedcarryingpreferentialsubscriptionrightsfor
currentshareholders .Threedaysatleastmustbeallovvedinthecaseofissues
ofdebentures,convertibledebenturesordebentureswithwarrantswhichdo
notcarrypreferentialsubscriptionrightsforexistingshareholders .
2.Moreover,wherethereistobeamarketinsubscriptionrightsgivingrise
todealingsrecordedintheofficiallist,theprospectusmustbepublishedor
madeavailabletothepublicatleastthreedaysbeforethismarketopens.
3.Intheeventoftheadmissionofdebenturestoquotationcoincidingwith
thepublicissue,andwhencertaintermsoftheissuesuchastheissuepriceor
theinterestrateareonlyfinalisedatthelastmoment,theauthoritiesmay
confinethemselvestoinsistinguponthepublication,atleastthreedays
beforeadmission,ofaprovisionalprospectusomittingthisinformationbut
indicatinghowitwillbemadeknown.Thisinformationmustbemade
knowntothepublicnotlaterthanthedaybeforedealingscommence,by
16 S.8/72

puttingouteitheracompleteprospectusoranaddendumsheettothe
above-mentioned provisionalprospectus,oralternativelybyanoticeinthe
pressreferringtothecompleteprospectusandindicatingwhereitmaybe
procured. •
Article16:Publicationofdocumentsotherthantheprospectus
1.Assoonasacheckedprospectusispublishedforsecuritiesinconnection
withtheiradmissiontoquotation,thebills,postersanddocumentsconfinedto
theannouncement oftheseoperationsandtoanindicationoftheessential
characteristics ofthesecuritiesmustrefertotheprospectusandmuststate
whereandhowthepublicmayprocureit.
2.Documentscontainingmoredetailedinformationthatarepublishedby
oronbehalfoftheissuer,andinparticularthepartialorabbreviated
prospectusincountrieswhereitsissueisallowedbytheauthorities,must,in
thesamemannerasthecompleteprospectus,besubmittedforcheckingbythe
competentauthorities,inorderthattheymayverifythattheseinformatory
documents,thoughabbreviatedorincomplete,wouldnotbeliabletodistort
thepublic'sassessmentofthesecuritiesandinorderthattheymaycallfor
amendmentstobemade,ifnecessary.
Furthermore ,these"documentsmustrefertothecompleteprospectusandmust
indicatewhereandhowitmaybeobtainedbythepublic.
»
3.ItisrecommendedthatMemberStatesshouldencouragethepublication
ofabbreviatedprospectuseswhichareclearlypresentedandeasyforthepublic
tounderstandandwhich,whilstincludingonlytheessentialelementsofthe
annexedSchedules,conveyanobjectiveimpressionoftheissuerandofthe
rightsattachingtothesecurities.
4.Thecompany'orthefinancialintermediaries concernedintheplacingof
thesecuritiesortheiradmissiontoquotationmaynot,inthisconnection,give
anyinformationthatmightaffectassessmentofthesecuritiesifitdoesnot
appearintheprospectusorisnotcommonknowledge.
Article17:Newfactors
Everyimportantnewfactorarisingbetweenthetimewhentheprospectusis
finalisedandwhendealingscommenceinthestockmarketmustbenotifiedin
asupplementtotheprospectus,checkedinthesamewayas'thelatterand
madeavailablebykindredprocedureswhichwillbedecidedbythecompetent
authorities .
S.8/72 17

SectionIV:ProceduresforcooperationbetweenMemberStatesinthe
applicationoftheDirective
Article1S:OperationsaffectingseveralMemberStates
1.Inthecaseofsimultaneous admissiontoquotationonthestock
exchangesofseveralmembercountriesoftheCommunity,theauthoritiesof
theMemberStatesconcernedshallestablishbetweenthemselvesallthe
contactsnecessarytocoordinatetothemaximumtherequirementsconcerning
prospectusesinordertoavoidamultiplicityofformalitiesandtoaccepta
singletextforthegreaterpartoftheprospectuswhichwouldthenonlyneeda
possibletranslationandsupplementcorresponding totheindividual
requirementsofeachMemberStateconcerned.
2.Intheeventofadmissiontoquotationbeingsoughtonastockexchange
inoneormoreMemberStatesforsecuritieswhichhavebeenadmittedto
quotationinanotherMemberStateforlessthansixmonths,theauthoritiesof
thecountriesinwhichadmissionisbeingsoughtshallmakecontactwith.the
authoritywhichhasalreadyadmittedthesecuritiesandshall,asfarasis
possible,exempttheissuerfromdrawingupanewprospectussubjecttoany
needforupdating,translationortheissueofasupplementinaccordancewith
theindividualrequirementsofeachmembercountryconcerned.
3.Inthecaseofasecuritywhichisquotedonthestockexchangesof
severalMemberStates,theauthoritiesofthecountriesconcernedmust
endeavourtogettheissuertoarrangethatinformationmadeavailableinone
ofthesecountrieswhichmightinfluenceassessmentofthemeritsofthe
securityisalsomadeavailableatthesametime,orsoonafter,intheother
countriesinwhichthesecurityisquoted.-
Article19:ContactGroup
1.AContact'GroupshallbesetupintheCommission .Itsfunctionshall
be: '
(a)tofacilitate,withoutprejudicetotheprovisionsofArticles169and170
oftheTreaty,harmonisedapplicationoftheDirectivethroughregular
contactsdesignedtoconcertapproachestothepracticalproblemsconnected
withitsapplication,and,inparticular,withtheannexedSchedules,about
whichexchangesofviewsmighthedeemeduseful;
(b)tofacilitateaconcertedapproachasregardssupplementsand
improvements totheprospectuswhichitispermissiblefortheauthoritiesof
MemberStatestorequireorrecommendatpurelynationallevel;
18 S.8/72

(c)toaidtheCommission,ifnecessary,indrawingupnewproposalstothe
Councilwithaviewtosupplementing oramendingtheDirective.
2.TheContactGroupshallbecomposedofrepresentatives oftheMember
Statesando£theCommission .TheCommission'sservicesshallprovidethe
'Secretariat .
SectionV:Finalprovisions
Article20
1.MemberStatesshallputintoeffect,withintwelvemonthsofnotification
tothemofthepresentDirective,allmeasuresnecessaryforcomplyingwithits
provisionsandshallinformtheCommissionimmediatelyofsuchmeasures.
2.TheMemberStatesshallcommunicate totheCommissionthetextsof
theessentialprovisionsofnationallawwhichtheyadoptintheareascovered
bythepresentDirective.
Article21 -
ThepresentDirectiveisaddressedtotheMemberStates.
S.8/72 19

SCHEDULE A
Schemeofpresentationforprospectuses
fortheadmissionofsharestostockexchangequotation
Chapter1.Personsorbodiesassumingresponsibilityfortheprospectus ■
11.Namearidfunctionofthenaturalpersons,nameandregisteredofficeof
thebodiescorporateassumingresponsibilityfortheprospectusor,asthecase
maybe,forcertainpartsofit.Shouldtheyassumeresponsibilityforcertain
partsoftheprospectusonly,mentiontheseparts.
12.Declarationbythesignatoriesoftheprospectusthat,tothebestoftheir
knowledge,thedataappearinginthatpartoftheprospectusforwhichthey
assumeresponsibilityareinaccordancewiththefactsandthatthereareno
omissionslikelytoaffectthebearingoftheinformation .
13.Statementspecifyingwhetherornottheaccountshavebeencheckedby
internaloroutsideauditing/accountingexperts(e.g.accountants,sindaci,
Wirtschaftspriifer ,etc.).Thecapacity(organestablishedunderthe"Statutes"1
orexternalbody)inwhichtheverificationswerecarriedoutshouldbe
specified,aswellaspossiblereservations .Thesameruleshallapplytothe
consolidatedaccountscontainedintheprospectus.>
Chapter2.Informationconcerningadmissiontoquotationandthesecurities
forwhichapplicationisbeingmade .•
21.Natureoftheoperation(e.g.,admissiontoquotationofsecurities
alreadymarketed;admissiontoquotationwithaviewtostockexchange
marketing).
22.Informationconcerningthesecuritiestobeadmittedtoquotation.
221.Indicationoftheresolutions,authorizations andapprovalsby
virtueofwhichthesecuritieswerecreated:typeofoperationand
amountthereof.Numberofsecuritiescreated,ifpredetermined .
i .1 ,
•222.Concisedescriptionoftherightsattachingtothesecurities,inter
aliaextentofthevotingrights,entitlementtoshareintheprofitsandto
theliquidationsurplus,anyprivileges.Time-limitafterwhichdividends
lapseandindicationofthepartyinwhosefavourthisprovision
operates.
InthecaseofaU.K.companythistermcorrespondstotheMemorandum andArticles
ofAssociation (Translater'snote).
20 S.8/72

223.Arrangementsfortransferofthesecuritiesandanyrestrictionson
theirfreenegotiability (e.g.,clauseestablishingapprovalrequirement).
224.Datefromwhichdividendsbecomepayable.'
-225.Thestockexchangeorexchangestowhichadmissionisormaybe
appliedfor.
226.Theinstitutionswhich,atthetimeofadmission,arethepaying
agentsofthecompanyinthecountrywheretheadmissionoccurs.
23.Informationconcerningissueandplacingofsecurities:shouldanissue
prospectusnothavebeenpublishedandwhentheissueandtheadmissionto
quotationoccuratthesametime,orwhentheissueprecededadmissionto
quotationbylessthanthreemonths,thefollowingitemsofinformationshall
appearinthe'admissionprospectus.Theinformationprovidedforin
point23,sofarasapplicable,shallalsobesuppliedforprivatelyissued
securitiesatthetimeoftheiradmissiontostockexchangequotation.
230.Forthesecuritiesreferredtoinpoint22,indicationofany
preferentialrightsorexclusionofpreferentialrightsforexisting
shareholders .Inthelattercase,thereasonsfortheexclusionand,inthe
caseofanissueforcash,forthechoiceoftheissuepriceofthe
securities,withindicationofthebeneficiariesoftheexclusion.
231.Thetotalamountonoffertothepublicandthenumberof
securitiesoffered,whereapplicablebycategory..
232.Ifthepublicofferisbeingorhasbeenmadesimultaneously on
severalmarketsandifatrancheis-beingorhasbeenreservedforcertain
ofthese,indicatethetranches.
233.Theissueorsubscriptionprice,distinguishing theparvalueorthe
amountplacedtocapital,theissuepremiumandtheamountofany
expensesexplicitlychargedtothepurchaserorsubscriber;themethods
ofpaymentoftheprice,interaliaasregardsthepaying-upofsecurities
whicharenotfullypaid-up.
234.Theprocedure'forexerciseofthepreferentialrights,the
negotiabilityofsubscriptionrights;whathappenstounexercisedrights.
235.Periodduringwhichtheissueisorwasopenandindicationofthe
financialinstitutionsresponsibleforreceivingthepublic'ssubscriptions .
236.Methodsandtime-limitsfordeliveryofthesecurities,possible
creationofscrip. v
237.Indicationofthepersonsunderwritingorguaranteeingtheissue
fortheissuingcompany.Iftheissueisbeingguaranteedprivatelyby
naturalpersons,thisfactistobeindicatedwithoutmentioningthemby
name.Wherenotalloftheissueisunderwrittenorguaranteed,the
portionnotcoveredistobementioned.
S.8/72 21

238.Estimateoftheoverallamountand/oramountpersecurityofthe
chargesrelatingtotheissueoperation,makingadistinctionatleast
betweenthelegalandadministrative expensesontheonehand,andthe
overallremuneration ofthefinancialintermediaries ontheother
(includingtheunderwriting commissionormargin,guarantee
commission,placingcommission).
239.Netproceedsaccruingtothecompanyfromtheissueandplanned
appropriation oftheseproceeds(e.g.,financingoftheinvestment
programmeorreinforcement ofthecompany'sfinancialsituation).
24.Informationconcerningadmissiontoquotation.
241.Descriptionofthesecuritiestheadmissionofwhichisappliedfor
and,interalia,numberoroverallparvalue,exactdesignationor
category,serialnumbers,couponsattached,etc.
242.Ifthesecuritiesaretobeplacedbyintroductiononthestock
exchange,thenumberofsecuritiesmadeavailabletothemarketand/or
theoverallparvalueand,whereapplicable,theminimumsaleprice.
243.Ifknown,thedateonwhichthenewsecuritieswillbelisted.
244.Ifsecuritiesofthesamecategoryarealreadylistedononeormore
stockexchanges,mentionistobemadeofthisorthesestockexchanges
and,insofarasthedatamentionedbelowareavailable,forthelast
fivefinancialyearsandforthecurrentfinancialyearasregardsthe
principalstockexchangeorstockexchanges:
2441.Thenumberofsecuritieslistedortheiroverallparvalue.
2442.Thevolumeoftransactionsbynumberofthesecurities
and/ortheirmarketvalue.
2443.Theadjustedhighestandlowestprices,i.e.,rendered
comparablesoastotakeaccountofoperationsthathaveoccurred
inrespectofthecapital(increase,decrease,splitting,
rearrangement ).Theadjustmentformulaeutilisedaretobe
indicated.
2444.Theadjustedprofitpershareandtheadjusteddividendper
share,i.e.,renderedcomparablesoastotakeaccountof
operationsthathaveoccurredinrespectofthecapital(increase,
decrease,splitting,rearrangement ).Theadjustmentformulae
utilisedaretobeindicated.
245.Ifsecuritiesofthesamecategoryarenotyetadmittedtoquotation
butaredealtinonmarketsotherthanthatofofficialquotation,the
mostrecentpricesonthosemarketsinsofarassuchpublicityis
permitted;themarketonwhichthesepriceswererecordedandthe
sourcefromwhichtheyweretaken.Thedatareferredtoaboveare
givenonlyifthemarketforthesecuritiesissufficientlywide.
22 S.8/72

246.Publictake-overbidsorexchangeoffersinvolvingthecompany's
sharesandpublicexchangeofferswhichhavebeenmadebythe
company -duringthelastfinancialyearandthecurrentfinancialyear,
mentioningtheconditionsoftheofferanditsresult.
25.If,simultaneously oralmostsimultaneously withthecreationofsecurities
forwhichadmissiontoquotationisbeingsought,securitiesofthesamenature
are-subscribedorplacedprivatelyorifsecuritiesofothercategoriesare
createdwithaviewtotheirpublicorprivateplacing,detailsaretobegiven
ofthenatureoftheseoperationsandofthenumberandcharacteristics ofthe
securitiestowhichtheyrelate.
Chapter3.Informationofageneralcharacteraboutthecompany
31.Statusofthecompany.
311.Nameorstyle,registeredofficeand,whereappropriate,principal
administrative establishment ,ifthelatterisdifferentfromtheregistered
office.
312.Dateofincorporation and,ifthelifeofthecompanyislimited,
thedateofitsexpiration. ■
313.Legislationunderwhichthecompanyoperatesandlegalform
whichithasadoptedintheframeworkofthislegislation.
314.Indicationofthecompany'sobjectsandreferencetotheArticleof
the"Statutes"inwhichtheyaredescribed.
315.Indicationsoftheplaceswhereitispossibletoconsultthe
coordinated"Statutes",balancesheetsandreports,decisionsconcerning
theappointmentanddismissalofmembersofthecompany'sorgans,as
wellasanyotherdocumentquotedintheprospectusandaccessibleto
thepublic,andoftheplacewherethedispatchofthelatestcompany
reportmaybeappliedfor.•Placeswheretheprospectusesrelatingtothe
operationsinrespectofissueoradmissiontoquotationperformedby
thecompanyinthecourseofthepastfiveyearsmaybeconsultedbythe
public.
316.Time-limitsforandwaysofcallinggeneralmeetings.Dateand
placeofthenextGeneralMeeting,iftheseareknown.
32.Capital. •
321.Theamountofthecapitalsubscribedanditscomposition ;thepart
ofthesubscribedcapitalstilltobepaidup,withindicationofthe
number(ortheoverallparvalue)andnatureofthesecuritiesnotyet-
fullypaid-up,brokendown,whereapplicable,accordingtothedegree
towhichtheyhavebeenpaidup.
S.8/72 23

322.Whenthereisanauthorisedcapitalorauthorityforacontingent
capitalincrease,interaliainconnectionwithconvertiblebondsissuedor
subscriptionoptionsgranted,indicate:
(i)theamountofthisauthorisedor"contingent"capitaland,where
appropriate ,thedurationoftheauthorisation ;
(ii)thecategorieshavingapreferentialrightofsubscriptionforthese
additionalportionsofcapital;
(iii)thetermsandarrangementsfortheshareissuecorresponding to
theseportions.
323.Ifthereexistseveralcategoriesofsecurities,whetherrepresenting
thecapitalornot,mentiontheirprincipalcharacteristicsandthenumber
ofsharesor"parts"1issued.
324.Conditionsgoverningchangesinthecapitalandintherespective
rightsofthevariouscategoriesofsecurities,insofarastheydepart
fromthegenerallaw.
325.Outlinetableofchangesinthecapitalcoverning,inprinciple,at
leastthelastfiveyears,aswellasthemostimportanteventspriorto
thatperiod.Dateandconcisedescriptionofthesuccessiveoperations
changingthecapitaloritscomposition (mentioningpremiumsonissues
orassetsbroughtin).
326.Indicationofanypersonwhodirectlyorindirectly,aloneor
jointlywithothershareholders ,controlsthecompany,mentioningthe
amountofhisparticipationandinanycase,insofarasitisknownto
thecompany,anyholdingof25%ormoreofthesubscribedcapital.
Mentionmustalsobemadeoftheportionsof10%ormoreheld
directlyorindirectlyinthecompanybyothernaturalpersonsorbodies
corporate,wheneverthisholdingiscommonknowledge.
Byjointcontrolmustbeunderstoodthecontrolexercisedbyseveral
companiesorseveralpersonswhentheyhaveconcludedamong
themselvesanagreementwhichmayleadthemtoadoptacommon
policyvis-a-visthecompanyinquestion.
327.Iftheprospectus-publishing companybelongstoagroupof
enterprises,adescriptionofthegroupandoftheplaceitoccupies
therein.
328.Bookvalueandparvalue(oraccountingparvalue)ofitsown
securitiesrepurchasedorheldbythecompanyifthesesecuritiesarenot
isolatedinthebalancesheet;originandobjectofthisrepurchase .
"Parts"giveprofit-sharing rightsbutdonotrepresentanycapitalvalue(Translater's
note).
24 S.8/72

Chapter4.Informationconcerningthecompany'sactivity
41.Principalactivitiesofthecompany.
Inthesectionswherethedescriptionofthecompany'sactivityisrequiredonly
forthecurrentfinancialyearandthelastfinancialyearandifitisconsidered
thatthisperiodistooshorttoreflectmeaningfully thecompany's
development,itisadvisabletoaddindicationsaboutthepreviousfinancial
years.Insofarasthecompany'sdevelopmentwithinthereferenceperiodhas
beeninfluencedbyexceptionalevents,e.g.,animportantmerger,theseevents
aretobeindicated.Ifpossible,thedatashouldbepresentedinsuchawayas
toenableacomparisontobemadeofthetrendfromonefinancialyearto
another. .
411.Descriptionofthecompany'sprincipalactivities,mentioningthe
maincategoriesofproductsmanufactured andsoldand/orservices
performed.Indicateimportantnewproductsand,asfaraspossible,the
proportionoftheturnoverattributabletonewproductsdeveloped
withinthelastfiveyears.
412.Theabovedescriptionmaycontainindicationsconcerningthe
developmentofthecompany'srelativepositioninitsprincipalbranches
ofactivities,iftheseindicationscanbebased,astotheirsignificanceand
comparability ,onfiguresemanatingfromqualifiedinstitutions,andthe
sourcegiven.
413.Breakdown,byprincipalbranchesofactivities,ofthenetamount
oftheturnoverinthecourseofthepastfivefinancialyearsand,ifthese
figuresaresignificant,theproductionvolumes "oftheprincipalproducts.
.Anyrelativelyhomogeneous activitywhichcontributesmorethan15%
totheturnoverisconsideredabranchofactivity.
414.Informationonthestructureofmarketsandsuppliesforthelast
financialyear,andforthecurrentfinancialyearandtheirtrend(with,if
possible,breakdownofthenetamountoftheturnoverbyprincipal
geographicaloreconomiczones,insofarasthisinformationmay
influenceassessmentofthenetworth,financialpositionorresults).
415.Locationandimportanceofthecompany'sprincipalestablishments
;and,ifnecessary,theirdevelopmentinthecourseofrecentfinancial
yearsandthecurrentfinancialyear,andinformationaboutthereal
estateowned.Anyestablishmentwhichaccountsformorethan10%of
turnoverorproductionisconsideredtobeaprincipalestablishment .
416.Formining,-extractionofhydrocarbons ,quarrying,etc.,
descriptionofthedeposits,estimateoftheeconomicallyexploitable
reservesandexpectedperiodforwhichtheywillbeexploited,indication
oftheperiodandprincipalconditionsoftheconcessionsandthe
economicconditionsoftheirexploitation,indicatingthestateofprogress
oftheactualexploitation .
S.8/72 25

42.Showclearly,ifapplicable,thecompany'sdependencewithrespecttothe
grant,useorexpirationofpatentsandlicences,totheconclusion,maintenance
orexpirationofindustrial,commercialandfinancialcontracts,andtonew
manufacturing processeswhenthesefactorshavegreatimportanceforthe
activityorprofitabilityofthecompany.
Ifthisisthecase,allthatwillberequiredistogiveindicationsaboutthe
degreeofdependence,todescribeconcisely,andwithoutdivulgingindustrial
secrets,thefactorsinquestionwhichhaveaparticularimportance,andto.
indicate,iftheyaresignificantinthisrespect,thedatesofconclusion,
obtainingorexpirationofcontracts,licencesandpatents.
43.;Amountoftheexpenditureeffectedinthecourseofthepastfive
financialyearsforresearchanddevelopmentofnewproducts.
44.Indicationsoflawsuitsandfactorsinterruptingactivities(e.g.:strikes,
accidents)whichhavehadormighthaveasignificantimpactonthenet
worth,financialpositionorresultsofthecompany.
45.Averagenumbersemployedandtheirtrendinthecourseofthepastfive
financialyears(ifthistrendissignificant)with,ifpossible,abreakdownof
personsemployedbyprincipalbranches.
46.Investments .
«
/
461.Description,withfigures,oftheprincipalinvestments ,including
tradeinvestmentsacquired,inthecourseofthepastfivefinancialyears.
■462.Generalindicationsconcerningtheinvestmentprogrammein
courseofimplementation ,includingitsoverallcost,itsmethodsof
financing,thenatureoftheinvestments ,insofar-astheseindicationsare
necessaryforassessingtheuseofthefundscollectedinrelationtothe
programmeasawhole.Byinvestmentprogrammeincourseof
implementation ismeantnotonlytheprojectswhoseexecutionhas
alreadystartedbut,morewidely,thewholebodyofinvestmentprojects
whichareinter-linkedtoanextentsuchthatthecommissioning or
profitabilityoftheinvestmentsalreadyeffectedorincourseofexecution
dependsontheimplementation ofalltheinvestmentprojectsconstituting
theprogramme.
463.Atableshowingthesourcesandutilisationoffundsmustbe
•supplied,relatingtothepastfivefinancialyearsandthecurrent
financialyear.
26 S.8/72

Chapter5.Informationconcerningthenetworth,financialsituationand
resultsofthecompany
51.Generalrules. \-
511.Comparativetablesummarisingtheannualaccountsrelatingtothe
pastfivefinancialyearssoastobringouttheessentialfactors,ensuring
howeverthattherearrangement ofthepublishedaccountsdoesnot
affecttheirinformativevalue. "
512.Theannualaccountsrelatingtothelasttwocompletedfinancial
yearsasapprovedbythegeneralmeetingpfshareholdersmustbe
appended.
Ifmorethanninemonthshaveelapsedsincethedateonwhichthelast
financialyearwasclosed,arecentprovisionalfinancialstatement
(whichmaybesubmittedwithouthavingbeencheckedbychartered
accountants )mustbeinsertedintheprospectus,orappendedtoit..
513.Shouldtheannualaccountsnotbedrawnupinconformitywith
theprovisionsofCouncilDirectiveNo....of...,*andshouldtheynot
giveasufficientlydetailedandpreciseviewofthenetworth,financial
situationandresultsofthecompany,theymustbeaccompanied by
explanatorynotes;^adcomments;moredetaileddisclosureinthe
prospectusmaybecalledforandexplicitmentionmustbemadeof
correctionsandamendmentsinrelationtothepublishedaccounts.
514.Ifthecompanydrawsupconsolidatedaccounts,theinformation
providedforinitems511,512and513shall,ifpossible,begivenonthe
basisoftheconsolidated accountsaswell.
52.Individualdetailsrelatingtotheenterprisesinwhichthe
prospectus-publishing companyholdsatleast10%ofthecapital:
521.Name,registeredoffice.
522.Proportionofcapitalheld.
523.Capitalsubscribed.
524.Reserves.
525.Resultofthelastfinancialyear.
Thesedetailsshallbepresented,ifpossibleintheformofasynoptic
tableintheprospectus,unlesstheyalreadyappearintheannual
accountsappendedtoit. ■
53.Individualdetailsrelatingtothecompaniesinwhichthe
prospectus-publishing companyhasasubstantialholdinglikelytoinfluence
assessmentofitsnetworth,financialsituationorresults.
1OJC7of28.1.1972.
S.8/72 27

ThoseJi'tnilsmustbegiven,interalia,forthecompaniesinwhichthe
prospectus-publishing companydirectlyorindirectlyholdsatleast25%ofthe
capital,orwhenthevalueofthisholdingrepresent*atlcnBt10%ofthe
paid-upcapitaloftheprospectus-publishing company,orwhenthisholding
accountsforatleast10%ofthelattercompany'searnings.
However,forholdingsincompaniesbelongingtothirdcountries,thedetails
providedforinitems531to535neednotbegiveninanindividualmanner
butmaybeamalgamatedwiththedetailsprovidedforinitem54.
Inadditiontothedetailsmentionedinitems521to525,thefollowing
indicationsmustbegiven:
531.Fieldofactivity.
532.Bookvalueofthesharesor"parts"held.
533.Amountstilltobepaiduponthesesharesor"parts"held.
534.Netturnoverinthecourseofthelastfinancialyear.
535.Amountofdividendsreceivedinthecourseofthelastfinancial
yearinrespectofsharesor"parts"held.
536.Amountoftheprospectus-publishing company'sclaimsonthe
(companyinwhichithasasubstantialholding.
537.Amountoftheprospectus-publishing company'sdebtstothe
companyinwhichithasasubstantialholding.
538.Amountforwhichtheprospectus-publishing companyguarantees,
endorsesorsecuresthecommitmentsofthecompanyinwhichithasa
substantialholding.
54.Overallinformationrelatingtoalltheenterprisestakentogetherin
whichtheprospectus-publishing companyholdsatleast10%ofthecapital
andwhicharenotreferredtoinitem53: '
Samedetailsasthoseprovidedforinitems532to538butpresentedinoverall
formandbrokendownasbetweencompaniesofthecountry,companiesof
othermembercountriesandcompaniesofthirdcountries.
55.Whentheprospectuscomprisesconsolidatedaccounts,thereshallbe
indicatedinanannex:
551.Theconsolidation principlesappliedand,ifapplicable,any
exceptionstoanddeviationsfromtheseprinciples.
Thefollowingdetailsaretobeindicated,interalia:
(i)theselectioncriteriaforthecompaniesincludedinthe
consolidation ; :
28 S.8/72

(ii)themethod(s)ofconsolidation utilised:overallorproportional
integration,placingonanequivalentfooting;
(iii)theratesofexchangeusedfortheconsolidation oftheforeign
companies;
(iv)themethodsofeliminatingprofitsresultingfromtransactions
amongthecompaniesofthegroup;
(v)thewayinwhichthestockswereintegrated;inparticular,
explanationsmustbeprovidedintheeventofthenon-elimination
oftheintra-groupprofit;
(vi)ifappropriate,thedetailsrelatingtotheunderlyingfiscalsituation
ofthegroup,takingaccountoftimingdifferencesinthepayment
ofcorporationtax;
(vii)thedefinitionoftheconsolidatedturnover;
(viii)thescopeoftheconsolidationoftheresults(total,partialor
simplifiedconsolidation );"
(ix)thechangeswhichhaveoccurred,inrelationtotheaccounts
publishedforthepreviousfinancialyear,intheprinciplessetforth
above.
552.Listofcompaniesincludedintheconsolidation ,nameand
registeredoffice.Itmaybesufficienttodistinguishthembyasignin
thelistofcompaniesforwhichdetailsareprovidedforinitem52.
553.Foreachofthecompaniesincludedintheconsolidation ,other
thantheprospectus-publishing company:
(i)theproportionofthird-partyinterests,iftheaccountsofthis
companyareconsolidatedglobally;
(ii)theproportionoftheconsolidationcalculatedonthebasisofthe
interests,ifconsolidationhasbeeneffectedonaproratabasis.
56.Whenthecompanyperformsasignificantproportionofitsactivities
throughtheintermediaryofcompaniescontrolledbyitandmanagedasa
singleunit,thedetailsconcerningtheactivityofthecompany(Chapter4),its
recentdevelopmentanditsprospects (Chapter7)mustbeprovidedforthe
wholeunitinadditiontoconcisedetailsfortheprospectus-publishing
companyindividually .
■Chapter6.Administration ,Management,Supervision
61.Name,firstname,placeofresidenceandfunctioninthecompanyofthe
followingpersons,mentioningtheprincipalactivitiesperformedbythem
outsidethecompanywhentheyaresignificantinrelationtothe
S.8/72 29

prospectus-publishing company(interalia,themostsignificantdirectorships
andimportantfunctionsinothercompanies)..Theactivitiesofsignificance
forthecompanyperformedbythesesamepersonsinthecourseofthepast
fiveyearsiftheyjoinedthecompanylessthanfiveyearsago. -
611.Membersoftheadministrative ,directingorsupervisoryorgans,as
wellastheotherpersonswhoassumethemanagementofthecompany
atthehighestlevel.
612.Generalpartnersinthecaseofapartnershiplimitedbyshares.
613.Founders,ifthecompanyhasbeenestablishedforlessthanfive
years.,
62.Interestsofthedirectors,etc.,inthecompany..
621.Remuneration paidforthelastcompletedfinancialyearunderany
headingwhatsoever,asachargetooverheadsortheprofit
•appropriation account,totheadministrative ,directingorsupervisory
organs.Overallamountforeachcategoryoforgan.Inaddition,the
totalremuneration paidtothemembersoftheseorgansofthe
prospectus-publishing companybyallthecompaniescontrolledbyitand
managedasasingleunitmustbeindicated.
622.Optionsgrantedtothemembersoftheadministrative ,directingor
supervisoryorgansandtotheotherpersonsreferredtoinpoint611,
withrespecttosecuritiesofthecompany:termsandconditionsofthese
options.
623.Informationaboutthenatureandextentofthedirectorindirect
interestsofthedirectorsandmanagersorofthepersonstheyrepresent
intransactionswhichareunusualbytheircharacterortheirconditions,
effectedbythecompany(suchaspurchasesoutsidethenormalactivity,
acquisitionordisposaloffixedassetitems,leasecontractswith
subsidiariesorpersonsmentionedabove)inthecourseofthelast
financialyearandduringthecurrentfinancialyear.Whensuch
unusualtransactionswereconcludedinthecourseofpreviousfinancial
yearsandtheireffectsarestillbeingfelt,informationonthese
transactionsmustalsobegiven..:
624.Overallindicationofalltheloansgrantedbythecompanytothe
personsreferredtoinpoint611,aswellasoftheguaranteesconstituted
bythecompanyintheirfavour.:,
•63.-Staffbeneirits.
631.Briefdescriptionofthepolicyfollowedwithregardtostaff
benefitsandmoreparticularlywithregardtoprofit-sharingcontractsor
supplementary retirementpensioncontracts;asregardsthelatterpoint,
stepstakentoensureprovisionforthem.
30 S.8/72

Descriptionofthespecialbenefitsofacontractualcharacterwhenthe
.probabletrendofthechargetheyrepresentislikelytoexertamarked
influenceonthiscategoryofexpenditure .
632.Optionsgrantedtothestaffonsharesinthecompany.
633.Overallindicationofalltheloansgrantedbythecompanytothe
staffandoftheguaranteesconstitutedintheirfavour.
64.Name,address,capacityandoccupationofthepersonsresponsiblefor
checkingtheaccounts(e.g.:commissairesauxcomptes,reviseursd'entreprises ,
Wirtschaftspriifer ,sindaci,etc.).
Chapter7..Recentdevelopmentandprospectsofthecompany '
71.Generalindicationsconcerningthetrendinthecompany'sbusinesssince
theendofthelastfinancialyearandcomparisonwiththecorresponding
periodofthepreviousfinancialyear.Whenthisinformation isalready
availableininterimreports,itwillsufficetoappendthesaidreportstothe
prospectusmadeavailabletothepublic.Thefollowingdataaretobe
supplied,interalia:
■711.Thenetturnoversincethebeginningofthefinancialyear.
712.Adescriptionofthemostsignificantrecenttrendsinproduction
andstocks.
713.Adescriptionofrecenttrendsincostsandsellingprices.
714.Thestateoftheorderbook.
72.-Companyprospects.'
Theprospectusmustclearlybringoutthefactthatthispartconsistsof
estimatesorintentionswhichmightnotmaterialise .
721.Briefindicationsontheprojectedinvestmentprogrammeinsofar
asthecompanyhasalreadymadefirmdecisionsonthisorhasprepared
thegroundbyrecentfinancialoperationsandwheretheprogrammeis
likelytoexertanimportantinfluenceonthecompany'sfuturefinancial .
policy,particularlyitsself-financingpolicy.
722.Anestimateconcerningthecompany'scommercialandfinancial
prospectsmaybeinsertedintheprospectus,providedthatitisbacked
byfigures(concerning,forexample,thetrendofbusinessconditions,of
themarketsandoftheorderbook,theinfluenceofcapitalspendingby
thecompanyanditscompetitors )andbypointersthatarehighlylikely
toproveaccurate.
S.8/72 31

723.Ifpossible,generalindicationsconcerningtheprofitdistribution
andretentionpolicieswhichthecompanycontemplatesfollowingor
proposingtodiemeetingofshareholdersandparticularly,ifapplicable,
concerningthepolicyontheissueofsecuritiesinconnectionwith
capitalisationofallorpartofthereservesorincreasesinvalue,and
concerningtheoperationofanydividendequalisationreserve.
S.8/72

SCHEDULE B
Schemeofpresentationforprospectusesfortheadmission
tostockexchangequotationofdebenturesissued
byindustrialorcommercialundertakings
Chapter1.Personsorbodiesassumingresponsibilityfortheprospectus
11.Nameandfunctionofthenaturalpersons,nameandregisteredofficeof
thebodiescorporateassumingresponsibilityfortheprospectusor,asthecase
maybe,forcertainpartsofit.Shouldtheyassumeresponsibilityforcertain
partsoftheprospectusonly,mentiontheseparts.
•12.Declarationbythesignatoriesoftheprospectusthat,tothebestoftheir
knowledge,thedataappearinginthatpartoftheprospectusforwhichthey
assumeresponsibility areinaccordancewiththefactsandthatthereareno
omissionslikelytoaffectthebearingoftheinformation .
13.Statementspecifyingwhetherornottheaccountshavebeencheckedby
internaloroutsideauditing/accountingexperts(e.g.accountants,sindaci,
Wirtschaftspriifer ,etc.).Thecapacity(organestablishedunderthe"Statutes"1
orexternalbody)inwhichtheverificationswerecarriedoutshouldbe
specified,aswellaspossiblereservations.Thesameruleshallapplytothe
consolidatedaccountscontainedintheprospectus.
«
Chapter2.Informationconcerningtheoperation
21.Conditionsoftheloan.
211.Thenominalamountoftheloan;thenatureandtheamountof
thedenominations availableand,whereappropriate,theirnumberand
numbering.
212.Theissueandredemptionpricesandthenominalinterestrate;if
severalinterestratesareprovidedfor,anindicationoftheconditionsfor
changesintherate.Intheeventofthesecuritiesbeingissued
.continuouslyatavariablepricefollowingthetrendofthemarkets,
informationistobegivenconcerningthelimitissuepricesapplied.
213.Theproceduresforallocationofanyotherfinancialadvantagesof
whichaccountcannotbetakenintheyield,forexampleprizes,sharein
profits,indexing,etc.and,whereapplicable,thebasisofcalculationof
thevariablefactorsandthepublicitygiventothese;theprobable
incidenceonyieldofavariationoftheparameter.
1InthecaseofaU.K.companythistermcorrespondstotheMemorandum andArticles
orAssociation(Translater'snote).
S.8/72 33

214.Taxwithheldatsourceontheincomefromsecuritiesinthe
countryoforiginand/orthecountryofquotation.Indicationasto
whethe?theissuittge&mpanyasaumesjespongibilityforthewithholding
oftaxatsource.
215.Amortization .
2151.Theamortizationplanfortheloanwithanypossibilitiesof
earlyredemptionattheoptionoftheissuerand/orsubscriberand
thewayinwhichearlyredemptionsorstockexchangeor
over-the-counterbuying-inwillaffectthe*amortization plan;
methodofoperationofanysinkingfund.
2152.Amortizationprocedure:techniqueofdrawingbylotand
publicitytherefor,repurchaseonthestockexchange,repurchaseby
mutualagreement.
216.Thefinancialinstitutionswhich,atthetimeofadmission,arethe
payingagentsofthecompanyinthecountrywheretheadmissiontakes
place.
217.Currencyoftheloan.Iftheloanisdenominated inunitsof
account,thecontractualstatusofthese;currencyoption.
218.Timelimits.
2181.Periodoftheloanandanyinterimduedates.
2182.Thedatefromwhichinterestbecomespayableandthedue
datesforinterest.
*
2183.Thetimelimitonthevalidityofclaimstointerestand
repaymentofprincipal.
2184.Theproceduresandtimelimitsforthedeliveryofthe
securitiesandthecreationofscrip,whereapplicable.
219.Anyotherfactornecessaryforthecalculationoftheyieldorfor
theassessmentofthevalueofthesecurities.Themethodofcalculating
theyieldistobespecified.
22.Légalinformation .
221.Referencetotheresolutions,authorizations andapprovalsby
virtueofwhichthesecuritieswerecreatedorwhichconstituteaprior,
conditionforissueor.admissiontoquotation.
222.Natureandscopeoftheguarantees,suretiesandcommitments
intendedtoensurethattheloanwillbedulyservicedasregardsboth
interestandcapitalrepayment.Thetextsofthecontractsrelatingto
suchguarantees,suretiesandcommitmentsshouldbeaccessibletothe
public.Whentherearenosuchsureties,guaranteesorcommitments
thisfactmustbementioned .
34 S.8/72

223.Organizationofrepresentation forthebodyofdebentureholders
ortrusteeships;nameordenomination andheadofficeofthe
representative ofthedebentureholders,themainconditionsofsuch
representation andparticularlytheconditionsunderwhichthe
representative maybereplaced.Thetextsofthecontractsrelatingto
theseformsofrepresentationmustbeaccessibletothepublic.
224.Mentionofclausessubordinatingtheloantootherdebtsofthe
companyalreadycontractedortobecontractedinthefuture.
225.Thelegislationapplicabletothesecuritiesandthecourts
competentintheeventoflitigation.
226.Arrangements fortransferofthesecurities,registeredorbearer,
andanyrestrictionsontheirnegotiability .
23.Informationconcerningadmissionofthedebenturestoquotation.
231.Thestockexchangeorexchangesonwhichquotationisorwillbe
appliedfor.
232.Indicationofthepersonsunderwritingorguaranteeingtheissue
fortheissuingcompanyandtheextentoftheircommitments .Ifthe
issueisbeingguaranteedprivatelybynaturalpersonsthisfactistobe
indicatedwithoutmentioningwhotheyare.Wherenotalloftheissue
isunderwritten orguaranteed,theportionnotcoveredistobe
mentioned. ■_ ••
233.Thenumberorglobalnominal 1valueofthesecuritiesforwhichquotationissought.
234.Ifthepublicoffer,issueoradmissiontoquotationtakesplace
simultaneously onthemarketsofseveralcountriesandatrancheis
reservedforcertainofthesemarkets,anindicationofthesetranches.
235.If,simultaneously oralmostsimultaneously withthecreationof
thesecuritieswhicharethesubjectofthepublicissueorofthe
admissiontoquotation,securitiesofthesamenaturearesubscribedor
placedprivatelyorsecuritiesofothercategoriesarecreatedwithaview
totheirpublicorprivateplacing,mentionistobemadeofthenatureof
theseoperationsandofthenumberandcharacteristics ofthesecurities
concerned.
236.Ifthesamedebenturesarealreadyquotedononeorseveralstock
exchanges,thefollowingmustbementioned:
2361.Thestockexchangeorexchangesonwhichtheyarequoted.
2362.Thelatestpriceknown.
S.8/72 35

237.Ifthesecuritiesarenotyetadmittedtoquotation,butaredealtin
onmarketsotherthanthatofofficialquotation,themostrecentprices
onthosemarketsinsofarasthesepricesaremeaningful;themarketon
whichthesepriceswererecordedandthesourcefromwhichtheyhave
,becomeknown.
24.Informationconcerningtheissue,inthecaseofaprospectuspublishedat
thetimeofissue,oriftheissueisconcomitantwithadmissiontoquotationor
ifithastakenplacewithinthethreemonthsprecedingsuchadmission:
241.Anypreferentialrightsandtheprocedureforexercisingthem:the
negotiabilityoftherightsandwhathappenstorightsnottakenup.
242.Theamountofthesubscriptionchargeswhichareaddedtothe
purchaseorsubscriptionpriceandbornebythesubscriber.
243.Theprocedureforpaymentofthepurchaseorsubscriptionprice.
244.Theperiodduringwhichtheissueisorwasopenandan
indicationofanypossibilitiesofearlyclosure.
245.Anindicationofthefinancialestablishments instructedtoreceive
subscriptions fromthepublicandofthepersonsresponsiblefor
allotment,whereapplicable,oftheloan.
246.Indicationofthenetamountoftheissueproceeds.
247.Purposeoftheissueandallocationofitsproceeds.
»
Chapter3.Informationofageneralcharacteraboutthecompany'
31.Statusofthecompany.
311.Nameorstyle,registeredofficeand,whereappropriate,principal
administrative establishment ,ifthelatterisdifferentfromtheregistered
office.
312.Date(jfincorporation and,if,thelifeofthecompanyislimited,
thedateofitsexpiration.
313.Legislationunderwhichthecompanyoperatesandlegalform
whichithasadoptedintheframeworkofthislegislation.
314.Indicationofthecompany'sobjectsandreferencetotheArticleof
the"Statutes"inwhichtheyaredescribed.
315.Indicationsoftheplaceswhereitispossibletoconsultthe
coordinated"Statutes",balancesheetsandreports,decisionsconcerning
theappointmentanddismissalofmembersofthecompany'sorgans,as
wellasanyotherdocumentquotedintheprospectusandaccessibleto
■thepublic,andoftheplacewherethedispatchofthelatestcompany
36 S.8/72

reportmaybeappliedfor.Placeswheretheprospectusesrelatingtothe
operationsinrespectofissueoradmissiontoquotationperformedby
thecompanyinthecourseofthepastfiveyearsmaybeconsultedbythe
public.
32.Capital.
321.Theamountofthecapitalsubscribedanditscomposition ;thepart
ofthesubscribedcapitalstilltobepaid-up,withindicationofthe
number(ortheoverallparvalue)andnatureofthesecuritiesnotyet
fullypaid-up,brokendown,whereapplicable,accordingtothedegree
towhichtheyhavebeenpaid-up.
322.Inthecaseofaconvertibleloanoraloanwithwarrantsattached
andwhenthereisanauthorisedcapitalorauthorityforacontingent
capitalincrease,indicate:
(i)theamountofthisauthorisedor"contingent"capitaland,where
appropriate,thedurationoftheauthorisation ;
(ii)thecategorieshavingapreferentialrightofsubscriptionforthese
additionalportionsofcapital;
(iii)thetermsandarrangementsfortheshareissuecorresponding to
theseportions.
323.Indicationofanypersonwhodirectlyorindirectly,aloneor
jointlywithothershareholders ,controlsthecompany,mentioningthe
amountofhisparticipationandinanycase,insofarasitisknownto
thecompany,anyholdingof25%ormoreofthesubscribedcapital.
Mentionmustalsobemadeoftheportionsof10%ormoreheld
directlyorindirectlyinthecompanybyothernaturalpersonsorbodies
corporate,wheneverthisholdingiscommonknowledge.
Byjointcontrolmustbeunderstoodthecontrolexercisedbyseveral
companiesorseveralpersonswhentheyhaveconcludedamong
themselvesanagreementwhichmayleadthemtoadoptacommon
policyvis-a-visthecompanyinquestion.
324.Iftheprospectus-publishing companybelongstoagroupof
enterprises,adescriptionofthegroupandoftheplaceitoccupies
therein.
325.Bookvalueandparvalue(oraccountingparvalue)ofitsown
securitiesrepurchasedorheldbythecompanyifthesesecuritiesarenot
isolatedinthebalancesheet;originandobjectofthisrepurchase.
5.8/72 37

Chapter4.Informationconcerningthecompany'sactivity
41.Principalactivitiesofthecompany.
Inthesectionswherethedescriptionofthecompany'sactivityis-requiredonly
forthecurrentfinancialyearandthelastfinancialyearandifitisconsidered
thatthisperiodistooshorttoreflectmeaningfully thecompany's
development ,itisadvisabletoaddindicationsaboutthepreviousfinancial
years.Insofarasthecompany'sdevelopmentwithinthereferenceperiodhas
beeninfluencedbyexceptionalevents,e.g.,animportantmerger,theseevents
aretobeindicated.Ifpossible,thedatashouldbepresentedinsuchawayas
toenablea.comparisontobemadeofthetrendfromonefinancialyearto
another.
411.Descriptionofthecompany'sprincipalactivities,mentioningthe
maincategoriesofproductsmanufactured andsojdand/orservices
performed.Indicateimportantnewproductsand,asfaraspossible,the
proportionoftheturnoverattributabletonewproductsdeveloped
withinthelastfiveyears.
-412.Theabovedescriptionmaycontainindicationsconcerningthe
developmentofthecompany'srelativepositioninitsprincipalbranches
ofactivities,iftheseindications'canbebased,astotheirsignificanceand
comparability ,onfiguresemanatingfromqualifiedinstitutions,andthe
sourcegiven.
413.Breakdown,byprincipalbranchesofactivities,ofthenetamount
oftheturnoverinthecourseofthepastfivefinancialyearsand,ifthese
figuresaresignificant,theproductionvolumesoftheprincipalproducts.
Anyrelativelyhomogeneous activitywhichcontributesmorethan15%
totheturnoverisconsideredabranchofactivity.
414.Informationonthestructureofmarketsandsuppliesforthelast
financialyearandforthecurrentfinancialyearandtheirtrend(with,if
possible,breakdownofthenetamountoftheturnoverbyprincipal
geographicaloreconomiczones,insofara£thisinformationmay
influenceassessmentofthenetworth,financialpositionorresults).
415;Locationandimportanceofthecompany'sprincipalestablishments
and,ifnecessary,theirdevelopmentinthe.courseofrecentfinancial
yearsandthecurrentfinancialyear,andinformationaboutthereal
estateowned.Anyestablishmentwhichaccountsformorethan10%of
turnoverorproductionisconsideredtobeaprincipalestablishment .
416.Formining,extractionofhydrocarbons ,quarrying,etc.,
'descriptionofthedeposits,estimateoftheeconomicallyexploitable
reservesandexpectedperiodforwhich.theywillbeexploited,indication
oftheperiodandprincipalconditionsoftheconcessionsandthe
economicconditionsoftheirexploitation,indicatingthestateofprogress
oftheactualexploitation .
38 S.8/72

42.Showclearly,ifapplicable,thecompany'sdependencewithrespecttothe
grant,viseorexpirationofpatentsandlicences,totheconclusion,maintenance
orexpirationofindustrial,commercialandfinancialcontracts,andtonew
manufacturing processeswhenthesefactorshavegreatimportanceforthe
activityorprofitabilityofthecompany.
Ifthisisthecase,allthatwillberequiredistogiveindicationsaboutthe
degreeofdependence,todescribeconcisely,andwithoutdivulgingindustrial
secrets,thefactorsinquestionwhichhaveaparticularimportance,andto
indicate,iftheyaresignificantinthisrespect,thedatesofconclusion,
obtainingorexpirationofcontracts,licencesandpatents.
43.Amountoftheexpenditureeffectedinthecourseofthepastfive
financialyearsforresearchanddevelopmentofnewproducts.
44.Indicationsoflawsuitsandfactorsinterruptingactivities(e.g.:strikes,
accidents)whichhavehadormighthaveasignificantimpactonthenet
worth,financialpositionorresultsofthecompany.
45.Averagenumbersemployedandtheirtrendinthecourseofthepastfive
financialyears(ifthistrendissignificant)with,ifpossible,abreakdownof
personsemployedbyprincipalbranches.
46.Investments .
461.Description,withfigures,oftheprincipalinvestments,including
tradeinvestmentsacquired,inthecourseofthepastfivefinancialyears.
*
462.Generalindicationsconcerningtheinvestmentprogramme 'in
courseofimplementation ,including .itsoverallcost,itsmethodsof
financing,thenatureoftheinvestments,insofarastheseindicationsare
necessaryforassessingtheuseofthefundscollectedinrelationtothe
programmeasawhole.Byinvestmentprogrammeincourseof
implementation ismeantnotonlytheprojectswhoseexecutionhas
alreadystartedbut,morewidely,thewholebodyofinvestmentprojects
whichareinter-linkedtoanextentsuchthatthecommissioning or
profitabilityoftheinvestmentsalreadyeffectedorincourseofexecution
dependsontheimplementation ofalltheinvestmentprojectsconstituting
theprogramme .
463.Atableshowingthesourcesandutilisationoffundsmustbe
supplied,relatingtothepastfivefinancialyearsandthecurrent
financialyear.
Chapter5.Informationconcerningthenetworth,financialsituationand,
resultsofthecompany
51.Generalrules.
S.8/72 39

511.Comparativetablesummarisingtheannualaccountsrelatingtothe
pastfivefinancialyearssoastobringouttheessentialfactors,ensuring
howeverthattherearrangement ofthepublishedaccountsdoesnot
affecttheirinformativevalue. (
512.Theannualaccountsrelatingtothelastcompletedfinancialyear
asapprovedbythegeneralmeetingofshareholdersmustbeappended.
Ifmorethanninemonthshaveelapsedsincethedateonwhichthelast
financialyearwasclosed,arecentprovisionalfinancialstatement
(whichmaybesubmittedwithouthavingbeencheckedbychartered
accountants )mustbeinsertedintheprospectus,orappendedtoit.
513.Shouldtheannualaccountsnotbedrawnupinconformitywith
theprovisionsofCouncilDirectiveNo....of..-,1andshouldtheynot
giveasufficientlydetailedandpreciseviewofthenetworth,financial
situationandresultsofthecompany,theymustbeaccompaniedby
explanatorynotesandcomments;moredetaileddisclosureinthe
prospectusmaybecalledforandexplicitmentionmustbemadeof
correctionsandamendmentsinrelationtothepublishedaccounts.
514.Ifthecompanydrawsupconsolidatedaccounts,theinformation
providedforinitems511,512and513shall,ifpossible,begivenonthe
basisoftheconsolidated accountsaswell.
52.Individualdetailsrelatingtotheenterprisesinwhichthe
prospectus-publishing companyhasasubstantialholdinglikelytoinfluence
assessmentofitsnetworth,financialsituationorresults.)
Thesedetailsmustbegiven,.interalia,forenterprisesin'whichthe
prospectus-publishing companydirectlyorindirectlyholdsatleast25%ofthe
capital,orwhenthevalueofthisholdingrepresentsatleast10%ofthe
paid-upcapitaloftheprospectus-publishing company,orwhenthisholding
accountsforatleast10%ofthelattercompany'searnings.
Thesedetailsmustbesubmittedifpossibleintheformofasynoptictablein
theprospectusunlesstheyalreadyappearintheannualaccountsannexedtoit.
.521.Name,registeredoffice.
522.Portionofcapitalheld.
523.Capitalsubscribed.
524.Reserves.
525.Resuitofthelastfinancialyear.
1OJC7of28.1.1972.
40 S.8/72

53.Additionalindividualdetailsregardingsubsidiariesandindirect
subsidiaries .Bysubsidiaryismeantanenterpriseinwhichthe
prospectus-publishing companyholdssharesor"parts"whichrepresentover
halfthatenterprise'ssubscribedcapitalortowhichisattachedavotingpower
ofover50%.Byindirectsubsidiaryismeantanenterpriseinwhichthe
prospectus-publishing companyholdsdirectlyorthroughoneormore
subsidiariesorindirectsubsidiariessharesor"parts"whichrepresentoverhalf
thatenterprise'ssubscribedcapitalortowhichisattachedavotingpowerof
over50%.However,forsubsidiariesandindirectsubsidiarieslocatedinthird
countriesthedetailsprovidedforinitems531to538neednotbegiveninan
individualmannerbutmaybeamalgamatedwiththedetailsprovidedforin
item54.
Inadditiontothedetailsmentionedinitems521to525,thefollowing
indicationsaretobegiven:
531.Fieldofactivity.
532.Bookvalueofthesharesor"parts"held.
533.Amountstilltobepaid-uponthesesharesor"parts"held.
534.Netturnoverinthecourseofthelastfinancialyear.
535.Amountofdividendsreceivedinthecourse'ofthelastfinancial
yearinrespectofsharesor"parts"held.
536.Amountoftheprospectus-publishing company'sclaimsonthe
subsidiaryorindirectsubsidiary.■
537.Amountoftheprospectus-publishing company'sdebtstothe
subsidiaryorindirectsubsidiary.,
«
538.Amountforwhichtheprospectus-publishing companyguarantees,
.endorsesorsecuresthecommitments ofthesubsidiaryorindirect
subsidiary.
54.Overallinformationrelatingtoallenterprisesreferredtoinitem52and
notreferredtoinitem53:
Samedetailsasthoseprovidedforinitems532to538butpresentedinoverall
formandbrokendownasbetweencompaniesofthecountry,companiesof'•
othermembercountriesandcompaniesofthirdcountries.
55.Whentheprospectuscomprisesconsolidatedaccounts,thereshallbe
indicatedinanannex:
551.Theconsolidation principlesappliedand,ifapplicable,any
exceptionstoanddeviationsfromtheseprinciples.
S.8/72 41

Thefollowingdetailsaretobeindicated,interalia:
(i)theselectioncriteriaforthecompaniesincludedinthe
consolidation ;
(ii)themethod(s)ofconsolidation utilised:overallorproportional
integration,placingonanequivalentfooting;
(iii)theratesofexchangeusedfortheconsolidation oftheforeign
companies;
(iv)themethodsofeliminatingprofitsresultingfromtransactions
amongthecompaniesofthegroup;
(v)thewayinwhichthestockswereintegrated;inparticular,
explanationsmustbeprovidedintheeventofthenon-elimination
oftheintra-groupprofit;
(vi)ifappropriate,thedetailsrelatingtotheunderlyingfiscalsituation
ofthegroup,takingaccountoftimingdifferencesinthepayment
ofcorporationtax;
(vii)thedefinitionoftheconsolidatedturnover;
(viii)thescopeoftheconsolidation oftheresults(total,partialor
simplifiedconsolidation); '
(ix)thechangeswhichhaveoccurred,inrelationtotheaccounts
publishedforthepreviousfinancialyear,intheprinciplessetforth
above.
552.Listofcompaniesincludedintheconsolidation ,nameand
■registeredoffice.Itmaybesufficienttodistinguishthembyasignin
thelistofcompaniesforwhichdetailsareprovidedforinitem52!
553.Foreachofthecompaniesincludedintheconsolidation ,other
thantheprospectus-publishing company:
(i)theproportionofthirdpartyinterests,iftheaccountsofthis
companyareconsolidatedglobally;
(ii)theproportionoftheconsolidationcalculatedonthebasisofthe
interests,ifconsolidationhasbeeneffectedonaproratabasis.
56.Whenthecompanyperformsasignificantproportionofitsactivities
throughtheintermediaryofcompaniescontrolledbyitandmanagedasa
singleunit,thedetailsconcerningtheactivityofthecompany(Chapter4),its
recentdevelopmentanditsprospects(Chapter7)mustbeprovidedforthe
wholeunitinadditiontoconcisedetailsfortheprospectus-publishing
companyindividually ..''
Chapter6.Administration ,Management,Supervision
61.Name,firstname,placeofresidenceandfunctioninthecompanyofthe
followingpersons,mentioningtheprincipalactivitiesperformedbythem
42 S.8/72

outsidethecompanywhentheyaresignificantinrelationtothe
prospectus-publishing company(interalia,themostsignificantdirectorships
findimportantfunctionsinothercompanies).Theactivitiesofsignificance
forthecompanyperformedbythesesamepersonsinthecourseofthepast
fiveyearsiftheyjoinedthecompanylessthanfiveyearsago.
6sll.Membersoftheadministrative ,directingorsupervisoryorgans,as
wellastheotherpersonswhoassumethemanagementofthecompany
atthehighestlevel.
612.Generalpartnersinthecaseofapartnershiplimitedbyshares.
613.Founders,ifthecompanyhasbeenestablishedforlessthanfive
years.
62.Interestsofthedirectors,etc.,inthecompany..
621.Remuneration paidforthelastcompletedfinancialyearunderany
headingwhatsoever,asachargetooverheadsortheprofit
appropriation account,totheadministrative ,directingorsupervisory
organs.Overallamountforeachcategoryoforgan.Inaddition,the
totalremuneration paidtothemembersoftheseorgansofthe
prospectus-publishing companybyallthecompaniescontrolledbyitand
managedasasingleunitmustbeindicated.
'622.Informationaboutthenatureandextentofthedirectorindirect
interestsofthedirectorsandmanagersorofthepersonstheyrepresent
intransactionswhichareunusualbytheircharacterortheirconditions,
effectedbythecompany(suchaspurchasesoutsidethenormalictivity,
acquisitionordisposaloffixedassetitems,leasecontractswith
subsidiariesorpersonsmentioned ;above)inthecourseofthelast
financialyearandduringthecurrentfinancialyear.Whensuch.
unusualtransactionswereconcludedinthecourseofpreviousfinancial
yearsandtheireffectsarestillbeingfelt,informationonthese
transactionsmustalsobegiven. .
-623.Overallindicationofalltheloansgrantedbythecompanytothe
personsreferredtoinpoint611,aswellasoftheguaranteesconstituted
bythecompanyintheirfavour.
63.Staffbenefits.
631.Briefdescriptionofthepolicyfollowedwithregardto.staff
benefitsandmoreparticularlywithregardtoprofit-sharingcontractsor
supplementary retirementpensioncontracts;asregardsthelatterpoint,
stepstakentoensureprovisionforthem.
Descriptionofthespecialbenefitsofacontractualcharacterwhen"the
probabletrendofthechargetheyrepresentislikelytoexertamarked
influenceonthiscategoryofexpenditure .
S.8/72 43

632.Overallindicationofalltheloansgrantedbythecompanytothe
staffandoftheguaranteesconstitutedintheirfavour.
64.Naine,address,capacityandoccupationofthepcrsonsresponsiblefor
checkingtheaccounts(e.g.:commissairesauxcomptes,réviseursd'entreprises,
Wirtschaftspriifer ,sindaci,etc.).
Chapter7.Recentdevelopmentandprospectsofthecompany
71.Generalindicationsconcerningthetrendinthecompany'sbusinesssince
theendofthelastfinancialyearandcomparisonwiththecorresponding
periodofthepreviousfinancialyear.Whenthisinformation isalready
availableininterimreports,itwillsufficetoappendthesaidreportstothe
prospectusmadeavailabletothepublic.Thefollowingdataaretobe
supplied,interalia:
711.Thenetturnoversincethebeginningofthefinancialyear.
712.Adescriptionofthemostsignificantrecenttrendsinproduction
andstocks.
713.Adescriptionofrecenttrendsincostsandsellingprices.
714.Thestateoftheorderbook.
72.Companyprospects.
Theprospectusmustclearlybringoutthefact-thatthispartconsistsof
estimatesorintentionswhichmightnotmaterialise.
721.Briefindicationsontheprojectedinvestmentprogrammeinsofar
asthecompanyhasalreadymadefirmdecisionsonthisorhasprepared
thegroundbyrecentfinancialoperationsandwheretheprogrammeis
likelytoexertanimportantinfluenceonthecompany'sfuturefinancial
policy,particularlyitsself-financingpolicy.
722.Anestimateconcerningthecompany'scommercialandfinancial
prospectsmaybeinsertedintheprospectus,providedthatitisbacked
byfigures(concerning,forexample,thetrendofbusinessconditions,of
themarketsandoftheorderbook,theinfluenceofcapitalspendingby
■thecompanyanditscompetitors )andbypointersthatarehighlylikely
toproveaccurate.
723.Ifpossible,generalindicationsconcerningtheprofitdistribution
andretentionpolicieswhichthecompanycontemplatesfollowingor
proposingtothemeetingofshareholdersandparticularly,ifapplicable,
concerningthepolicyontheissueofsecuritiesinconnectionwith
capitalisationofallorpartofthereservesorincreasesinvalue,and
concerningtheoperationofanydividendequalisationreserve.
44 S.8/72

SCHEDULE C
Schemeofpresentationforprospectusesfortheadmission
tostockexchangequotation.ofcertificatesrepresentingshares
Chapter.1.Informationontheissuerofthecertificates
11.Nameorstyle,registeredofficeand,whereappropriate,principal
establishmentifthisisdifferentfromtheregisteredoffice.
12.Dateofincorporationand,ifthelifeofthecompanyislimited,dateof
itsexpiration.
13.Legislationunderwhichthecompanyoperatesandlegalformwhichit
hasadoptedintheframeworkofthislegislation.
14.Theamountoftheauthorizedcapital,ifappropriate,andtheamountof
thecapitalsubscribedanditscomposition ;thepartofthesubscribedcapital
stilltobepaid-upwithanindicationofthenumber(ortheoverallparvalue)
andnatureofthesecuritiesnotyetfullypaid-up,brokendown,where
applicable,accordingtothedegreetowhichtheyhavebeenpaid-up.
15.Indicationofthechiefholdersofthecapital.
«
16.Name,firstname,placeofresidenceandfunctioninthecompanyofthe
membersoftheadministrative ,directingorsupervisoryorgansaswellasof
theotherpersonswhoassumethemanagementofthecompanyatthehighest
levelandofthepersonsentrustedwithcheckingtheaccounts.
17.Objectsofthecompany.Iftheissueofcertificatesrepresentingsharesis
nottheonlyobjectofthecompany,thefeaturesofitsotheractivitiesmustbe
setout,thosehavingapurelytrusteecharacterbeingdealtwithseparately.
18.Annualaccountsforthelastcompletedfinancialyear.Commitmentby
theissuertopublishanyinformationrequiredbylaw,inparticularany
amendmentstothe"Statutes",theannualaccountsandpublicationsforthe
informationofsecurityholders,andtheplaceswheresuchpublicationwillbe
made.
Chapter2.Informationonthecertificatesthemselves
t
21.Legalstatus.Theissuetermsmustbe-insertedintheprospectus,with
mentionofthedateandplaceoftheirpublication.
S.8/72 45

211.Exerciseandbenefitoftherightsattachingtotheoriginal
securities,particularlyasregardsvotingrights–conditionsonwhichthe
companyissuingthecertificatesmayexercisetheserights,andmeasures
envisagedtoobtaintheinstructionsofthecertificateholders–andthe
righttoshareintheprofitandliquidationsurplus.
212.Bankorotherguaranteesattachedtothecertificatesandintended'
tounderwritetheissuer'sobligations,possibilityofobtainingthe
conversionofthecertificatesintooriginalsecuritiesandprocedurefor
suchconversion .
22.Theamountofthecommissionandcoststobebornebytheholderof
thesecuritiesinconnectionwith:
221.theissueofthecertificatesor"parts",1
222.thepaymentofthecoupons,
223.thecreationofadditionalcertificates,
[224.theexchangeofthecertificatesfororiginalsecurities.
23.Negotiabilityofthesecurities:
231.Stockexchangesonwhichquotationisorwillbeappliedfor.If
itisindicatedthatothermarketswillbeorganized,specifyonwhose
initiativeandresponsibility .
232.Anyrestrictionsonthefreenegotiabilityofthesecurities.
24.Supplementary informationforadmissiontoquotation:
241.Ifthesecuritiesaretobeplacedbyintroductiononastock
exchange:thenumberofsecuritiesmadeavailabletothemarketand/or
theoverallparvalue;theminimumsaleprice,ifsuchapriceisfixed.
242.Dateonwhichthenewsecuritieswillbequotedifthisisknown.
25.Indications&fthetaxarrangementswithregardtoanyimpostsand
taxestobebornebytheholdersandleviedinthecountrieswherethe
certificatesareissued.:•^ v'
26.Competentcourtsintheeventoflitigation.. -.
1"Parts"giveprofit-sharing rightsbutdonotrepresentanycapitalvalue(Translater's
note).
46 S.8/72

EXPLANATORY MEMORANDUM
Introduction
1.Atpresent.therequirementstoprovideinformationwhensecuritiesare
admittedtostockexchangequotationsometimesdifferconsiderablyincontent
andinlegalbasisfromoneMemberStatetoanother.Consequently ,issuers
provideinformationwhichvariesmarkedlybothinqualityandquantityand
theprotectionaffordedtotheinvestorinthisrespectisnoteverywherethe
same. -
Thedegreeoffreedomofmovementforcapitalalreadyachievedasaresultof
thefirsttwoDirectivesissuedpursuanttoArticle67oftheTreaty,which
allowstheacquisitionofsecuritiesofallkindsquotedinanotherMember
State,makesitnecessarytore-examineforthwith,fromaCommunity
standpoint,theproblemsofinformingandprotectingtheholdersofsecurities.
Itappearstobenecessarytoestablishminimumrequirementsforthe
informationtobeprovidedatthetimeofagrantofquotationinorderto
avoidunderminingtheconfidenceofholdersofvariousEuropeansecuritiesby
differinginformationandtoprovideeffectiveprotectionforholders
irrespectiveofwherethesecurityisquoted.
2.'Theincompleteanddifferingnatureoftheinformationwhichthepublic
receivesconcerningsecuritiesconstitutesa"secondbarrier"tothemovement
ofcapitalbetweenMemberStatesandpreventsfulladvantagebeingtaken,in
theoperationofthecapitalmarkets,oftheabolitionofexchangerestrictions
whichhasalresdytakenplace.
(a)Improvement oftheinformationavailabletothepublicconcerning
securitiesquotedonthestockexchangesoftheCommunitycouldmakethem
moreattractivetothepublicandconsequentlyaffectboththesupplyof
savingsinthesemarketsandthewayinwhichtheyfunction.Indeed,the
opacityofthemarketsisoftenseenasabasicreasonfortheirnarrownessand
instability.
Forlackofsufficientinformationontheoperationsandprospectsof
companies,investors,whoaremakingincreasinguseoffinancialanalysis,are
cautiousintheirattitudetothemarketsoftheCommunity ,preferringtodirect
theirinvestmentstowardsleadinginternationalsecuritiesforwhichample
information isavailable.
Forthesamereasonsth'eyattachdisproportionate importancetopoliticaland
fiscalfactors,whichhelpstoexplaintheexaggeratednatureofcertain
reactionsonthemarketsandtheunjustifiedpricelevelsforcertainsecurities.
(b)Improvementoftheinformationavailableshouldalsoleadtoanincrease
inthetransactionsinsecuritieseffectedbynon-residents ineachoftheMember
States.Itiscertainthatthedifficultiesingatheringthenecessaryinformation
S.8/72 47

tomakeinvestmentsinsecuritiesareconsiderablygreateronforeignmarkets
andespeciallywithintheCommunity .Thissituationhelpstoexplainwhy
investmentsbymembercountriesineachother'smarketarelessdeveloped
thantheirinvestmentsinthemarketsofcertainnon-member countrieswhere
informationonsecuritiesismoreextensive.
3.Thefactthattherequirementswhichfaceissuersapplyingforagrantof
quotationaredifferentincharacterandintheirdegreeofstringencyinthe
variousMemberStatescan:
(i)distorttheirchoiceofstockexchangestowhichtheyapplyfora
quotationoftheirsecurities,
(ii)discouragethemfromapplyingforagrantofquotationonthestock
exchangesofotherMemberStates.
Therequirementtopublishthesameminimuminformationwillclearlynot
leadtocompleteharmonization oftherulesgoverninginformationinthe
variousmarketsbutitwillgosomewaytowardsbringingthemmoreintoline
withoneanother,andinthiswaywillreducethedifficultiesmentionedabove.
AsaresultoftheDirective,Europeanissuerswillprobablyinsomecaseshave
topublishcertaininformationwhichpreviouslytheywerenotobligedto
disclose.However,onthewhole,decidedlystricterinformationrequirements
applytoapplicationsforadmissiontoquotationonthestockexchangesin
LondonorNewYork.Experienceinthesecountrieshasshownthatthese
issuershavesufferednoilleffectsfromtheneedtopublishextensive
,informationbutthat,onthecontrary,theyhavebenefitedfromitasregards
bothsourcesoffinanceandtheirrelationswiththegeneralpublic.
4.ThedraftDirectivehasitslegalbasisinArticle54paragraph3(g)ofthe
EECTreaty,whichestablishestheobligationtocoordinatethesafeguards
which,fortheprotectionoftheinterestsofmembersandoutsiders,arerequired
byMemberStatesofcompaniesorfirmswithinthemeaningofArticle58
withaviewtomakingsuchsafeguardsequivalentthroughouttheCommunity .
TheaimoftheDirectiveistocoordinatetheinformationpublishedinthe
MemberStatesbycompaniesapplyingfortheadmissionorintroductionof
securitiesforstockexchangequotationandtoimprovethegeneralqualityof
thisinformationinorderthatpresentorpotentialholdersofsecurities,i.e.the
companymembersandthirdpartieswhoareinvitedtosubscribe,mayenjoy,
equivalentsafeguardsinalltheMemberStates.Therulesthusprovidedfor,
takingintoaccounttheirnatureasacodeofmarketconductofterritorial
application,willnecessarilyhavetoextendtoenterprisesinthirdcountries.
TheDirectivewillalsohelptofacilitatethesimultaneousorconsecutive
admissionoftheirsecuritiestothestockexchangesoftheMemberStates,to
strengthenthecapitalmarketsoftheCommunityandtoreducetheobstacles
inthewayofinterpenetration . ■:
48 S.8/72

_SectionI:Generalrulesandfieldofapplication
Article1:Requirementofissuingaprospectus
1.Aprospectuscheckedbyanauthorityappointedforthispurposemustbe
publishedbeforesecuritiesareadmittedtoorintroducedforofficialquotation
onastockexchange.
(a)Thelinkingofthisruletoanofficiallistingonastockexchange,rather
thantotheissueofsecurities,isbasedonthefollowingconsiderations :
Inordertoensurethatsatisfactoryinformationandprotectionareaffordedto
subscribersandtoimprovethequalityandattractiveness ofthesecurities
market,itwoulddoubtlessbedesirabletoimposerequirementsonissuersof
securitiestoprovideinformationatthetimeofissue,sinceinmostofthe
MemberStatestheissueandtheoffertothepublicoccurbeforeadmissionto
quotation .Itwouldalsobedesirablenottoimposestricterrequirementson
companiesatthetimeofadmissiontoquotation,sincethiscoulddeterthem
fromapplying.
Nevertheless ,therequirementtoprovideinformationatthetimeofissueexists
atpresentonlyinBelgium,inFranceandinLuxembourg .InotherMember
Statessuchinformationisnotasyetobligatory,althoughinpracticeitisquite
frequentlyprovided.Thus:
(i)intheNetherlandsapublicissueisnearlyalwaysaccompanied bya
grantofquotation,sothatinpractivethedistinctionisofnointerest;
(ii)inGermanytheCommitteeofexpertsonstockexchangereform
attachedtothefederalMinistryfortheEconomyandFinancehas
recommended tobankswhicharemembersofnewissuesyndicatesthat,
atleastwhereforeigndebenturesoranincreaseofcapitalareinvolved,
theypublishtheadmissionprospectusatthetimeofissueandbefore
offertothepublic. . '■
Ontheotherhand,itisalreadyobligatoryinthesefiveMemberStatesto
publishaprospectusatthetimeofadmissiontostockexchangequotation.
Initiallyatleastitthereforeseemspreferabletoharmonizetherequirementsin
theMemberStateswheretheyalreadyexistratherthanimposenewonesin
severalStatesatoneandthesametime.
Furthermore ,thesefiveMemberStatesalreadypossessauthoritieswhichcheck
theprospectusesdrawnupinaccordancewithnationalrulesandthese
authoritiescould,withoutmajordifficulties,dolikewiseforthosedrawnupin
accordancewiththeruleslaiddowninthepresentDirective.Hence,ithas
seemedpreferabletorelyontheexistinginfrastructure inordertoimprove
andharmonizethequalityoftheinformationinashorterspaceoftimethan
S.8/72 49

wouldhavebeenrequiredtoestablishsupervisionatthetimeofissueinthose
countrieswhereitdoesnotyetexist.
(b)TherequirementsarisingfromtheDirectiveorelimitedtoadmissionto
officialquotation.Althoughitisrealizedthatsuchlimitationcancause
problems,itwasfelttobedifficultatthepresenttimetoestablishCommunity
rulesforadmissiontomarketsotherthantheofficialmarket,bearinginmind
especialytheverydifferentcircumstances inthevariousMemberStates.
Nevertheless ,itwouldbepossibleforMemberStatestoimposesimilar
regulationsinthecaseofadmissiontotheseothermarkets.
Theregulationsgoverninginformationapplytoeveryissuerofsecurities
applyingforastockmarketquotationirrespectiveoftheissuer'sdomicileand
legalstatusandthenatureofthesecurities,except,ontheonehand,securities
issuedbyopen-endinvestmentcompaniesandunittrusts,and,ontheother
hand,securitiesissuedbytheStatesandlocalauthorities.
2.Itwasfeltpreferable,inspiteoftheimportanceandurgentneedfor
progressinthisfield,thattheDirectiveshouldnotapplytosecuritiesissuedby
open-endcompaniesandunittrusts,i.e.organisations whosesecuritiesare
issuedcontinuouslyorincloselyspacedtranchesand/orareboughtbackor
redeemeddirectlyorindirectlyattherequestoftheholderoutoftheirassets.
Indeed,becauseofthecontinuousprocessofissuingandrepurchasingthe
securitiesoftheseconcernsandthefrequentpracticeofplacingbycanvassing
techniques,regulationsgoverningtheprovisionofinformationapplicableonly
atthetimeofintroducingsuchsecuritiestothestockmarketwduldbe
unsuitableasameansofgivingsubscriberssatisfactoryinformationand
protection.Moreover,informationrulesspecificallyfortheseconcernsareat
presentunderpreparation .
Ontheotherhand,securitiesissuedbyinvestmentcompaniesandcollective
investmentfundsotherthanoftheopen-endtypearesubject,atthetimeof
theirmarketintroduction ,tothesamerulesassecuritiesissuedbythefinancial
institutionsreferredtoinArticle6ofthepresentDirective.
3.SecuritiesissuedbytheStatesortheirlocalauthoritiesareexcludedfrom
thefieldofapplicationofthisDirective.Theyare,however,beingcoveredin
aproposedCouncilRecommendation ,takingaccountofthespecial
characteristics ofthesesecuritiesandissuers.
Article2:Contentsoftheprospectus
Thegeneralprinciplestowhichtheprospectusmustconforminorderto
achievetheobjectivesofthepresentDirectivearestatedinArticle2.
50 S.8/72

ThisestablishesrhestandardstowhichtheauthoritiesofMemberStatesmust
referinjudgingtheacceptabilityofaprospectusandtheadmissibilityof
certainexceptions .
Inconsideringtheinformationtheyrequiretobesupplied,theauthoritiesmust
takeintoaccountthespecialcharacteristics oftheissuer.Theprospectusmust
containalltheinformationlikelytoaffectanevaluationofthesecurity.The-
prospectusmustnotbelimitedtobriefparticularsdesignedsolelytobe
understoodbythegeneralpublic.Itmustalsoprovidesuchdetailsastoallow
professionalstohavefullknowledgeofthefactswhenadvisingthepublicor
takinginvestmentdecisionsonitsbehalf. '
Article3:Obligationtofollowtheschemesofpresentationsetoutinthe
Schedules
1.Itwasfeltnecessarynotonlytoestablishthegeneralrequirementto
achievetheobjectives'assetoutintheprecedingArticlebutalsotospecifythe
meansofachievingthembyindicatingintheappendedSchedulesthe
informationwhichshouldbecontainedintheprospectus.Withoutsuch
Schedulesitisdoubtfulwhethertherequirementssetbythevariousauthorities
couldbeharmonizedtoasatisfactorydegree,letalonemadeequivalent.Such
equivalenceisessentialifthepublicistohaveequalconfidenceinprospectuses
publishedinthevariousMemberStates.
However,certainMemberStatesalreadyrequireinformationwhich,incertain
respects,goesbeyondthatspecifiedintheSchedules.Itwasnotfeltdesirable
atthisjuncturetoaligntheCommunityrequirementsimmediatelywiththe
moststringentoftheregulationsobtaininginoneorotheroftheMember
States.Nordiditappearjustifiabletorestrict,forthesakeofharmonization ,'
therangeofinformationrequiredbythestrictestoftherulesobtainingin
certainMemberStates.
2.TheannexedSchedulessetouttheminimuminformation whichitis
requiredtopublish.AlltheparticularsmentionedintheSchedulesmustbe
publishedexceptincases'comingunderArticles4and5ofthepresent
Directive.
3.Ontheotherhand,theauthoritiesoftheMemberStatescan,if
necessary,supplementtherequirementsoftheSchedules,sinceitwasclearly
impossibletomakeexhaustiveandpreciseprovisionintheseSchedulesforthe
coverageofeveryfactorwhichcouldaffectevaluationofthesecurities.
4.TheSchedulesdonotlaydownoneparticularformofpresentationfor
prospectuses .Iftheauthoritiesconsideritdesirable,thepresentationmaybe
adaptedinordertomakeprospectuseseasiertoread.Inthisrespect,itis
indeedthedutyoftheauthoritiestoensurethatthepresentationof
prospectusesmakesthemeasytounderstand .
S.8/72 51

5.Articles6to12indicatethewaysofadaptingtheschemesof
presentationandtheirtermsofapplicationinordertotakeaccountofthe
characteristics ofcertainissuers(publicbodies,financialinstitutions),of'certain
kindsofissue(continuousorrepeated),of.certainsecurities(guaranteed,
convertibleorwithwarrants,certificatesrepresentingshares)ortheparticular
circumstances whichoccasionedtheissue(mergers,transfersofassets,the
splittingupofcompaniesorpublicoffersofexchange).
Inallthesecasestheannexedschemesofpresentationaretobeappliedinpart
orincombinationonewithanotherandmustbefollowedwithinthelimits
statedinthecorresponding Articles. -
6.Sincetheschemesofpresentationweredrawnupforthemostgeneral
caseofajointstockcompanyoperatingintheindustrialorcommercialfields,
therequirementtopublishcertainparticularsmayproveinappropriatetothe
particular .legalstatusoreconomicactivityofcertainissuers.Inorder
neverthelesstokeepthepublicsufficientlywellinformedinthesecasesandto
subjectallissuerstoequivalentrequirements ,itwasfeltnecessarytoallowthe
competentnationalauthoritiesfreedomtoadapttheschemeinquestiononthis
limitednumberofpointssoastobringout^theparticularcharacteristics ofthe
issuersinthemostsuitableway.Itneednotbestressedherethattheuseof
thisrightmustnotleadtoawideningofthenarrowrangeofexceptionsto
theSchedules-setoutinArticles4and5-butthatitssolepurposeisto
enablethecompetentnationalauthoritiestogiveabetterdefinitionofthe
informationtobegiventothepublicandthatitappliesonlyinthosecases
wheresomeitemsoftheannexedScheduleswouldbeinappropriate ..
Article4:Righttowaivepublicationofaprospectusorcertainofitsheadings
ItwasconsideredunnecessaryinthecasessetoutinArticle4torequire
publicationofaprospectusconformingwiththeSchedules.
1.Inseveralofthesecasestheinformationisalreadyavailabletothepublic
atlargeortothe'limitedcircleofoperatorsinvolvedinthetransaction .In
othercasesadmissiontoquotationinvolvesaverysmallamountofsecurities,
sothatitcanbeconsideredthatthetransactionisofinterestonlytoalimited
circleofoperators,thatitmakesnomajorchangeinthebasisforevaluation
ofthesecuritiesorthatitdoesnotjustifytheformalitiesandcostsinvolvedin
thepublicationofanewprospectus .Lastly,insomeofthecasesspecifield,itis
impossibletomeetthepublic'sneedsforcontinuousinformationina
satisfactorywaybymeansofaprospectus ."
2.Ratherthanprovidefortheblanketexclusionofallthecasesmentioned
fromthescopeoftheDirectiveitwasthoughtpreferabletoempowerthe
MemberStarestoestablishtheappropriateconditionsforexemption.
52 S.8/72

Theintention011thepartofanyMemberStatetomakeuseofthisfacilitymust,
however,benotifiedtotheCommissionatthelatestbytheexpiryofthe
time-limitsetinArticle20(1),sothattheCommissioncanknowpreciselythe
presentDirective'sfieldofapplication.Moreover,therulesetoutinArticle2
wouldremainapplicablewherethecertainMemberStatesnevertheless
requiredaprospectus .Hence,wherethecircumstances ofthecasemakeit
necessarytogivethepubliccertainfacts,theissuercannotbeexemptedfrom
publishingaprospectuscomprisingatleastthesefacts.
Article5:Dispensationfromtheprovisionsofcertainsectionsoftheannexed
Schedules ;
WhereasthepreviousArticlesetsoutcertaincircumstances inwhich,inthe
lastanalysis,theauthoritiescangranttheissuerablanketdispensationfrom
publishingaprospectus,Article5.definestheconditionsunderwhichthese
authoritiescan,inindividualcases,dispensetheissueronlyfrompublishing
certaininformationspecifiedintheannexedSchedules.
1.Exemptionispossibleinthefirstinstanceforinformationwhich,inthe
caseofindividualissuers,isofnegligibleimportanceandunlikelyto*affect
assessmentofthesecurities. >■
Although,inprinciple,theinformationspecifiedintheannexedSchedulesis
necessaryandmust,therefore,bepublished,itwasfeltadvisabletogivethe
authoritiesthepossibilityofallowingtheomissionorabbreviationofcertain
particularswhich,incertaindefinedcases,wouldgivethepublicnoadditional
aidtoassessmentbutwhich,onthecontrary,woulddetractfromtheclarityof
theprospectus .
Theseprovisionswouldnotallowtheauthoritiestogiveallissuersblanketor
systematicexemptionfromtheobligationtopublishcertaininformation .
2.Provisionhasalsobeenmadeforexemptionfromtheobligationto
publishinformationrequiredbytheSchedulesincertaincaseswhere
publicationcouldbecontraryto"thepublicinterest"orcouldbe"seriously
detrimentaltotheissuer".
Theexemptionclausescouldonlybeusedinexceptionalcases.Thus,the
authoritiescouldnotgrantblanketdispensationordispensationinthemajority
ofcasesinsuchfashionaswould,in.pratice,restrictthescopeofthe
obligationsarisingfromtheDirective.Theuseoftheexceptionsislimitedby
thefactthatexemptionfrompublishingthiskindofinformationmustnotbe
liabletomisleadthepublic.Hence,forinstance,anissuingcompanymustnot
beexemptedfrompublishingdetailsofitsfinancialsituationwhenthisis
unsatisfactory ,evenifpublicationcouldhavegraveconsequences .
S.8/72 53

Theconceptof"seriousdetrimenttotheissuer"mustnotberestrictedtothat
ofdetrimenttotheinterestsofcertaincompanymembers.
Theconceptof"thepublicinterest"couldbeinvoked,forinstance,incases
wherepublicationoftheinformationwouldendangernationaldefenceorthe
country'scommercialpolicy.
Section^1:Contentoftheprospectusinspecialcases
Article6:Financialinstitutions '_
1.TheannexedSchedulesweredrawnupforapplicationtothegreat
majorityofcompanies,thatis,thoseengagedinindustrialorcommercial
activities.
Nevertheless,Chapters1,2,3,5,and6couldbeappliedwithoutmuchchange
toallconcernsirrespectiveoftheirbusinessandtheirlegal,status.
2.Ontheotherhand,Chapters4and7,relatingtothebusinessofthe
companyanditsprospects,areunsuitableintheirpresentformforconcernsof
afinancialnature.
Ontheonehand,certainconceptssuchasturnoverortheorderbookhaveno
meaningforsuchconcernsand,viceversa,themostsignificantdetailsforthese
concerns,suchasminimumreservesortheliquidityratio,arenotcoveredin
theSchedules.Itfollowsthatspecialschemesofpresentationcoveringthese
chapterswouldbenecessaryforenterprisesinthefinancialsector.
Ontheotherhandrulesgoverningtheinformationtobesuppliedbyentreprises
inthissector,suchasbanks,savingsbanks,insurancecompanies,pensionfunds,
areaimednotonlyatprovidinginformationandprotectionforshareholders
butalso,andevenmore,forcustomersandaffiliatedmembersofthe
institutions .Theseinstitutionsareofgreatcomplexityanddiversity,makingit
difficulttoestablishCommunityschemesofpresentationimmediately .
Itthereforeseemsnecessaryatthisstagetoentrusttheauthoritiesinthe
MemberStateswiththetaskofadaptingChapters4and7tosuitthe
characteristics ofentreprisesinthefinancialsectorinsuchawaythat
equivalenceisachievedintheinformationsupplied.
3.TheMemberStatesarefreetodefinefinancialinstitutionsandthusto
specifythecasesinwhichChapters4and7oftheannexedScheduleswillnot
beapplicableintheirpresentfrom. 1
Sincesuchdefinitioncouldbedifficultinthecaseofholdingcompanies,itis
necessarywhenlayingdownrulesthemtotakeintoaccountnottheirstyle
andlegalstatusbuttheirbusinessactivities.Thedefinitionandlegalstatusof
54 S.8/72

"holdingcompanies"variesconsiderablyfromonecountrytoanother.In
practice,thisstylecancoverdifferentfunctionsexercisedbythefollowing
compagnies ;
(i)investmentcompaniesandcollectiveinvestmentfundsoftheopenor
closed-endtype;
(ii)"pure"financecompanies,i.e.thoseengaginginnootheractivitiesthan
assemblingcapitaltomakeitavailabletotheparentcompanyortoa
companydirectlyorindirectlyaffiliatedtoit;
(iii)"pure"holdingcompanies,i.e.thosethatdonotengage,inany.other
activitythanmanagingaportfoliooftransferablesecurities,trade
investments,licencesorpatents;
(iv)"mixed"companies,i.e.carryingonindustrialorcommercialactivitiesin
additiontooneoftheactivitiesoutlinedabove. .
Thesystemapplicabletoinvestmentcompaniesandcollectiveinvestments
fundsissetoutinArticle1,paragraph2.Thatfor"pure"financecompanies
issetoutinArticle8,sofarasguaranteedloansareconcerned,andin
Article9forconvertibleloansandloanswithwarrantsattachedwhichthey
issue. •
Withregardtothesharesthattheyissue,"pure"financecompaniesand
"pure",holdingcompaniescanbeplacedonthesamefootingasfinancial
institutionsandmadesubjecttothesamesetofrules.
"Mixed"holdingcompanieswillbesubjecttothegeneralsystemlaiddown
forindustrialandcommercialcompagnies . *
Article7:Continentsofrepeatedloanissuesbyfinancialinstitutions
1.Ithasnotseemednecessarytorequirepublicationofacomplete
prospectusateachadmissiontoquotationforsecuritiesissuedcontinuouslyor
forrepeatedloans(issuedonaverageatleasttwiceyearly)inthecaseof
banks,savingsbanks,creditinstitutionsandmortagecompanieswhichpublish
theiraccountsregularlyandwhichwithintheCommunityarecorporationsof
public-lawstatusorsubjecttopublicsupervisiondesignedtoprotectsavings.
Infact,theinstitutionsdescribedintheDirectivethatmakesuchissuesare
sufficientlywellknownandthefactthatwithintheCommunitytheyare
corporationsofpublic-lawstatutsorsubjecttopublicsupervisiondesignedto
protectsavingsprovidessufficientsafeguardsforsubscribers ._
Furthermore ,torequireaprospectustobepublishedseveral'timesayear
wouldbeexpensiveaswellasunnecessary ,sinceonmostoccasionslittlenew
informationwouldemerge.Hence,itissufficienttorequirethepublicationof
acompleteprospectusonlyeverythreeyears.
S.8/72 55

2.Thisbeingthecase,itseemedpreferabletolimittherequirementto
publishatthetimeofeachadmissiontothevariablefactors:thetermsofthe
loanandconditionsofthetransaction,thelatestannualaccountsifthesehave
notbeenpublishedduringtheyear,particularsofeventsofsignificancefor
assessmentofthesecuritiesthathaveoccurredsincepublicationofthelatest
annualaccounts.
Article8:Guaranteedloans
1.Whereaguaranteeotherthanintheformofmaterialsecurityisgranted
byonecompanyforaloanissuedbyanother,thefullprospectusmustcontain,
forthetwocompanies,theinformationlaiddownintheSchedulefor
debentures,sincethemeetingoftheborrower'sobligationsdependsonthe
profitabilityandsolvencyoftheissuingcompanyandofthecompagnyacting
asguarantor .
(2.Whereloansareissuedbyafinancecompanyonbehalfofitsparent
companyandareguaranteedbythelatter,itcanbeconsideredthatthe
servicingoftheloandependsaboveallonthecompanyactingasguarantor,
sincetheissuingcompanydoesnotoperateonitsownaccountandisnot
economicallyindependent .Theinformationrequiredconcerningtheissuing
companyshould,therefore,besimplifiedanddetailedparticularsgivenforthe
,companyactingasguarantor.
Wherethereismorethanoneguarantor,theauthoritiescanallowless
informationtobegiventomaketheprospectuseasiertoread.
♦
3.Forgrouploans,areductionintheinformationrequiredforeach
companymayprovenecessaryinordertokeeptheprospectusreadable.Such
reductionsshallbemadeaccordingtoinstructionsissuedbytheauthoritiesin
keepingwiththeprinciplesoutlinedinArticle2andtakingintoaccountthe
shareofthevariouscompaniesintheguarantee.
4.Asasourceofinformation,theguaranteecontractisgenerallyan
importantdocumentandmustbeannexedtotheprospectus.However,itis
oftenverybulkyanddrawnupinalegalformdifficultfordiepublicto
understand .Ifsuchbethecase,itisnecessarytorequirepublicationof
abridgedparticularsofthecontractin;theprospectusbutnotpublicationof
thefulltext,whichshouldsimplybemadeavailabletoanyinterestedpersons
atthepremisesofthebanks.
Article9:Convertibleloansorloanswithwarrantsattached
1.Whenapplicationforadmissionisfordebenturesconvertibleintoshares
oftheissuingcompanyorfordebenturescarryingwarrantsgivingtherightto
subscribeforaspecificnumberofsharesofthecompanyataspecificprice,
56 S.8/72

theissuingcompanymustpublishalltheparticularssetoutintheshares
ScheduleaswellasthoseinChapter2ofthedebenturesScheduleconcerning
thetermsoftheloan.
Thepublicmusthavealltheinformationconcerningthetermsoftheloan
and,inaddition,informationaboutthesecuritiesitwilleventuallybeableto
acquireasaresultofexercisingitsrights.Thepublicmustbeableto
determinewhethertheconversiontermsareadvantageous ,bearinginmindthe
company'sprospectsandthelowerratesofinterestgenerallyappliedtosuch
securities.
2.Wheretherightattachingtothedebenturesappliestosharesofacompany
otherthanthecompanyissuingthedebentures,thepublicmust,forthesame
reasons,havecompleteinformationinbothcompanies,i.e.theparticularsset
outinthesharesSchedulefortheoneandthoseinthedebenturesSchedulefor
theother.
However,forreasonsexplainedaboveinconnectionwithArticle8,ithas
seemednecessarytorelaxtherequirementsofthedebenturesScheduleswhen
thecompanyissuingthedebentureisa"pure"financecompanyi.e.acompany
engaginginnootheractivitythanassemblingcapitaltomakeitavailableto
theparentcompanyortoacompanydirectlyorindirectlyaffiliatedtoit.
3.Casesinwhichtheconvertibledebenturesandthesharesare
denominated indifferentcurrenciesarerareatpresentbutcouldbemore
commoninthefuture.Theconsequencesthatanychangesintheexchange
raterelationshipbetweenthecurrencieswouldhaveontheconversiontermsof
thesecuritiesmustbestated. '
Article10:Admissiontostockexchangequotationofsecuritiesissuedin
connectionwiththemergingorsplittingofcompanies,thetransferofassetsor
apublicexchangeoffer •i'
1.Inthecaseoftheadmissiontostockexchangequotationofsecurities
issuedatthetimeofmergersbetweencompanies,thesplittingupof
companies,thetransferofassetsorapublicexchangeoffer,theshareholders ,
whomustgivetheir,priorconsenteitherindividuallyoratageneralmeeting,
shallreceiveinformationaboutthevariouscompaniesinvolvedinthe
operationsotheycanevaluatetheproposedconversiontermsforthe
securities.Thesameinformationisrequiredifsecuritiesresultingfromsuch
anoperationareadmittedtoquotationwithinthreeyearsofitsoccurrence
sinceingeneraltheoperationcontinuestoaffecttheprofitabilityandprospects
ofthecompanyoverthisperiodoftime."
Theinformationisnolongeraddressedtothepreviousshareholders ,sincethe
operationiscompletedonintroductionofthesecuritiestostockexchange
dealing,butisintendedforpotentialbuyersofthesecuritieswhohavethe
righttothesameparticulars .
S.8/72 57

However,toavoidmakingtheprospectustoobulky,theinformationcanbe
abridgedifitreferstocompaniesalreadyquotedandforwhichanadmission
prospectushasbeenpublished.
2.Moreover,theinformationrequirementscanberelaxedbythecompetent
authoritiesiftheoperationhasoccurredlessthansixmonthsbeforeadmission
tostockexchangequotationandifatthattimeverifiedinformationequivalent
tothatwhichshouldappearinaprospectuswaspublished.Indiese
circumstances ,itissufficientforthisinformationtobemadeavailabletothe
publicwithoutthepublicationofaspecialprospectusbeingrequired.
Article11:Certificatesrepresentingshares
1.Theinformation -specifiedintheScheduleforcertificatesrepresenting
sharesmustbepublishedinadditiontothatspecifiedinthesharesSchedule
whencertificatesrepresentingsharesareadmittedtoquotation.
2.Thisisoftenthecasewithadmissiontoquotationofforeignsecurities
notconformingtotherequirementsorpracticesoftheplaceofquotation,and
especially:
(i)whentheforeignsecuritiesareregisteredand,bylaworbypractice,
onlybearersecuritiescanbequoted,sothatbearercertificateshaveto
beissued;
(ii)whentheforeignsecuritiesarebearerandonlyregisteredsec.uritiescan
bequotedordelivered,sothatregisteredcertificateshavetobeissued;
(iii)whenthedeliverytimefor.the;originalsecuritiesistoolongorthe
deliverycostsaretoohighandcertificatesrepresentingthemareinfact,
circulating;
(iv)whenthedenominations oftheoriginalsecuritiesareintoosmallortoo
largeunitsandcertificatesrepresentingmultiplesorfractionsofthese
unitsarequoted.
Hence,itfrequentlyoccursthatabankorotherfinancialinstitutioninthe
countryofthestockmarketactsasanintermediary,retainingtheoriginal
securitiesandissuingcertificatestorepresentthem.
3.'ThesameistrueofdomesticsecuritiesintheNetherlands .Theseare
oftendepositedwithtrusteeswhoinreturnissuecertificatesinrespectof
whichaquotationisappliedforandwhichcirculateinplaceoforalongside
theoriginalsecurities.
4.Inthesecases,itisnecessarytoinformthepublicnotonlyaboutthe
originalsecuritiesbymeansofaprospectuscontainingtheparticularsspecified
inthesharesSchedulebutalsoabouttheissuerofthecertificatesandthe
58 S.8/72

termsofissueinaccordancewiththeannexedcertificatesSchedule.The
concernissuingthecertificatescanbeheldlegallyliableforanylosstothe
holderscausedbyitsdishonestyorbyseriousnegligence.Holdersmust,
therefore,beaffordedtheopportunitytosatisfythemselvesastothesolvency
andthefinancialstandingoftheissuerofthecertificates.
5.•However,whentheissueofcertificatesisundertakenbybanks,savings
banks,creditinstitutionsormortgagecompanieswhicharequotedonthe
stockexchange,publishtheiraccountsregularlyandwhichwithinthe
Communityarecorporationsofpublic-lawstatusorsubjecttopublic
supervisiondesignedtoprotectsavings,orbyinter-professional associationsfor
thetransferofsecurities(Kassenverein ,SICOVAMetc.)orbytrusteeoffices
(administratiekantoren )subjecttothestrictrulesimposedbytheDutchstock
exchangeauthoritiesinrespectofthedepositoftheoriginalsecurities,the
competentauthoritiesmayexempttheissuersofcertificatesfrompublishing
theirfinancialsituation.
Article12:Issuersinthepublicsector
1.Therequirementtosubjectcorporatebodiesunderpublic-lawwhose
businessisofanindustrial,commercialorfinancialnaturetothesamerules
governinginformationasapplytoprivatecompanieswithcomparablebusiness
activitiesisjustifiedprimarilybytheneedtoavoiddistortingcompetition
betweenthesebodiesandprivatecompanieswiththesamebusinessactivities
withintheCommunity,andbytheadvisabilityofsubmittingthesebodies,to
thedisciplineofgoodmanagementusuallylinkedwiththerequirementto
informthepublic. .
2.However,asfarasprotectionofthesaverisconcerned,suchinformation
isnolongeressentialwhentheseorganizations ortheirdebenturesare
unconditionally andirrevocablyguaranteedbyaMemberState.
Insuchcase,itseemsthatthecompetentauthoritiesshouldbeempoweredto
simplifytheprospectus.However,itistobehopedthat,forthereasons
explainedabove,theseauthoritieswillendeavourtolimittheuseofthis
concession .
SectionIII:Arrangementsforenforcingtheprospectusrequirementsandfor
makingitpubliclyavailable
Article13:Enforcementoftheprospectusrequirements
1.Inorderthatthesameconfidencecanbefelteverywhereinthequality
ofinformationpublishedonsecuritiesquotedonthestockexchangesofthe
variousMemberStates,itseemsnecessarythatprospectusesshouldcontainnot
S.8/72 59

onlysimilarinformationbutthattheyshouldbescrutinizedwiththesame
efficacity.
TothisendtheMemberStatesshallentrustimplementation oftheDirectiveto
nationalauthoritiesalreadyexistingorcreatedforthispurpose.Thetaskcan
beassignedtooneorseveralauthoritiesandtheirresponsibilities mustbe
clearlydefined.
ItislefttotheMemberStatestodeterminethecharacteristics ofthese
audiorities,betheypublicorprivate,andtheirrelationswithgovernment
departmentsoncondition,nevertheless,that-theybeendowedwiththe
competenceandpowersofsupervisionnecessaryforthe'accomplishment of
theirtask.
2.Itwasfeltnecessarytoprohibitprospectusesfrombeingpublishedor
madeavailabletothepublicbeforeauthorizationbythecompetentauthority.
However,theMemberStatesarefreetodeterminethemostappropriate
methodofauthorization ,bethisintheformofpositiveapproval -orthatofa
"nihilobstat"whichmayormaynotberecordedbymeansofanofficial
stamp.Consequently ,themerepublicationoftheprospectusallowsthepublic
inallcasestobeawareoftheabsenceofobjectiononthepartofthe
competentauthotity.
3.Thetaskofthecompetentauthoritiesimpliesthattheywillreferbothto
thegeneralprinciplesexpoundedinArticles1,2and3andtotheannexed
Schedulesapplicabletotheissuersandsecuritiesinquestion.Thecompetent
authorityis,therefore,obligedtocheckthattheprospectuscontainsallthe•
particularsrequiredbytherelativeSchedulesornecessaryforobservanceof
thegeneralprinciples;-thattheparticularsareconsistent,thattheyare_
comparablewithinformationreleasedorpublishedpreviously,andthatthey
containallthenecessaryexplanationsforanycontradictions withthelatteror
withotherinformationinthepossessionoftheauthorities.
Inmakingchecks,especiallyonthenetworthandfinancialpositionofthe
issuer,thecompetentauthoritywillbeabletodrawonauditsindertakenby
professionalaccountants,financialinstitutionsorotherreliableexpertsand
mayconfineitselftorequiringevidenceofsuchaudits.
Hence,theauthorityisnotobligedtoverifythattheinformationpublishedis
materiallyaccurateandcomplete.However,ithastherightandeventheduty
torequestthecommunication andpublicationoffurtherdetails,aswellas
possiblespecificchecks,whenithasdoubtsaboutcertainitemsofinformation ..
4.Theareaofcompetenceandsupervisorypowersofthecompetent
authoritycanbedeterminedbytheMemberStateseitherinageneralorina
precisefashionaccordingtotheirconstitutionalrulesandcommonpractice.
60 S.8/72

Theymustbesufficientinallcasestoallowtheauthoritytorequire
publication,notonlyoftheparticularsprovidedfor.intheannexedSchedules,
butalsootherinformationconsiderednecessarytoensureobservanceofthe
generalprinciplesandtoallowittomakethechecksnecessaryforthe
accomplishment ofitstask.
Article14:Methodsofpublishbigtheprospectus
1.Thereareonlytwomethodsofpublishingaprospectuswhichsatisfythe
publicationrequirement ,namelyinsertioninthepressorapamphletmade
availabletothepublic.
Thesetwomethodscanbeconsideredsufficientifthepressmediumchosen
doesinfactreachasufficientlywidepublicintheareaofthestockexchange
inquestion,andifthepamphletsareinfactmadeavailabletothepublicat
thepremisesofallintermediaries likelytoreceivesubscriptionsorordersfor
buyingonthestockexchange.
MemberStatesmust,therefore,enforcetheuseofoneorotherofthese
methods;theoptionaluseofothermethodscannotbeheldtobesufficient.
2.However,becauseoftheexpenseandproblemsoflegibilityofthe
documentwhenpublishedinthepress,acombinationofthetwomethodsis
permitted.
*
ProspectusesdrawnupinaccordancewiththeruleslaiddownintheDirective 1
willcontainmoreinformationthanatpresentandhencewillbemorebulky
thanacurrentprospectus .Sincepublicationinpaperswithawidecirculation
isalreadyeverywheremoreexpensivethanthepublicationofpamphlets,a
requirementforfull-publicationinthepressofprospectusesdrawnupin
accordancewiththeDirectivewouldcauseasignificant .increase*incosts
creatinganadditionalobstacletostockexchangelisting.
Moreover,membersofthegeneralpublicaregenerallyneithersufficiently
knowledgable norinterestedtoanalysealltheinformationtobecontainedin
theprospectus,thisinformationbeingofrathermoreusetotheirfinancial
advisers.Henceitdoesnotseemessentialtomakepublicationofthe
completedocumentinthepressobligatoryifitismadeavailableto,all
interestedparties.Observanceofthevariousconditionssetoutabovewill
ensurethis. ;
Furthermore ,thedecisionastowhichparticularstopublishinthepressmust
betakeninaccordancewiththeruleslaiddownbythecompetentauthority,
andunderitssupervision,toensurethatthisincompletedocumentdoesnot
misleadthepublic. i
S.S/72 61

3.•Itseemednecessarytomakeitcompulsoryto.lodgeadmission
prospectusesinplaceswheretheywouldbepermanentlyaccessibletoany
memberofthepublicinterestedsothattheycanbeconsulted,evenaftera
lapseoftime,whentheyarenolongeravailableoverthecountersofthe
financialintermediaries .TheselocationswillbefreelychosenbyMember
States.Theycouldwellbe,forexample,atthestockexchangegranting
quotation,attheofficesofthecontrollingauthority,orattheofficesofthe
financialestablishments assistingtheundertakinginmakingtheissueor
introducingittoastockexchange.
Article15:Deadlinesforpublishingtheprospectus
1..Twosometimescontradictoryrequirementsmustbemetwhensettingthe
deadlineforpublishingprospectuses .
Theperiodoftimebetweenpublicationoftheprospectusandtheopeningof
dealingsrecordedintheofficiallistmustbe:
(i)longenoughforthepublictotakeintheinformationcontainedinthe
-prospectus ;
(ii)shortenoughtoremovethetemptationforprofessionalstocreatean
unofficialmarketmeanwhile .
Thedeadlineschosen–aminimumofeightdaysbeforehandforsharesand
threedaysfordebentures–reflectthemostgeneralcurrentpracticeandtake
accountofthenatureofthesecuritiesinquestion,thefactorstobeconsidered
beingmorecomplexforsharesthanfordebentures .Asregardsfconvertible
debenturesordebentureswithwarrantsitwasconsideredsuitabletochoosea
minimumrequirementofeightdayswhentheissueofthistypeofsecurity
carriessubscriptionrightstocurrentshareholders ,andofthreedaysonlywhen
thisisnott;hecase.
2.Threedays'clearancehasalsobeenprescribedforthepublicationofthe
prospectusbeforetheopeningofofficialdealingsinsubscriptionrights.This
emergedasthebestcompromisebetweenthecontradictory requirements
mentionedabove;italsotakesaccountofthedifferentdeadlinesatpresent
obtaininginvariousmarkets.
3.Whentheadmissionofdebenturestoquotationissimultaneouswith
theirpublicissue,theneedtofinalizepreciselycertaintermsoftheissue,such
astheissuepriceortherateofinterest,sometimesmeansthatthesetermsare
notfinallysettleduntilthedaybeforeissuetakesplace.Insuchcasesit
seemedadvisabletoaliowtheMemberStatestoauthoriseuseofthe
prospectus-publishing techniqueadoptedontheinternationalmarket.This
involvespublication,bythesetdeadline,ofaprovisionalprospectuscontaining
alltheinformationrequiredexceptforlast-minuteloantermssettledand
publishednotlaterthanthedaybeforedealingscommence.
62 S.8/72

Thusinpracticeitispossibletoprintadocumentleavingtwootthreespaces
forparticularsthatwillnotbesettleduntilthe.lastminute.Prospectusesthat
areincompleteinthisrespectonlyandhavebeencheckedbythecompetent
authoritycanbepublishedwiththenormalminimumclearanceofthreedays.
Whenthefinaltermsoftheloanarefixed,thepublicmustbenotifiedof
themeitherbyinsertingtheinformationinthepamphletsinstockorby
issuinganaddendumsheetsoastotransformtheprovisionaldocumentintoa
completeprospectusandbytheneitherdistributingthissheettoallthe
recipientsoftheprovisionaldocumentorpublishinganoticeinthepress
referringtothecompleteprospectusandindicatingwhereitmaybeobtained.
Article16:Publicationofdocumentsotherthantheprospectus
Inorderthattheprospectusshallbeofthegreatestpossibleserviceandshall
reallybethemainsourceofinformation,itisnecessarynotonlytoestablish
requirementsforitsdraftingandvettingbutalsotolaydownrulestoensure
ontheonehandthatinformationreleasedbytheissuerinadditiontothatin
theprospectus,beingoftenmoreaccessibletothepublicandconsequently
morelikelytoinfluenceit,doesnotdistortassessmentofthesecurities,andon
theotherhand,drawstheattentionofthepublictotheexistenceofthe
prospectus .Tothisend:
1.Ithasbeenlaiddownthatanydocumentpublishedbytheissuerinthe
periodbetweenpublicationoftheprospectusandtheopeningofofficial
dealingsshallrefertotheprospectusandindicatehowitcanbeobtaine4by
thepublic. ' .
2.Furthermore ,itwasfeltnecessarytosubmittothecompetentauthority
forcheckinganydocumentation publishedbytheissuercontainingmore
detailedinformationthanasimpleannouncement oftheissueoritsadmission
toquotationandthebasiccharacteristics ofthesecurities,inparticular,the
partialorabridgedprospectus.Thepurposeofthischeckingistoensurethat
suchinformation,althoughincomplete,doesnotdistorttheimpressiongiven
bythecompleteprospectus.
3.TheDirectivedoesnotrequirealldocumentstobecheckedbutonly
thosewhicharepublishedbytheissueroronhisbehalfandwhicharenot
confinedtotheannouncement oftheoperationandthebasiccharacteristics of
thesecurities.
Nordoesitrequireanabridgedorpartialprospectustobepreparedforthe
benefitofthegeneralpublic;whereoneexists,itmerelyprovidesforittobe
checkedbytheauthorities.
MemberStatesare,nevertheless ,recommendedtoencouragethepublicationof
abridgedprospectusespresentedinawaywhichisclear,comprehensible tothe
S.8/72 63

■generalpublicandyetobjective,anddraftedinaccordancewiththe
regulationsandunderthesupervisionofthecompetentauthority.
Suchaprospectuswouldseemtobeusefulforthefollowingreasons:■
(i)itwouldenablethegeneralpublictolearnatleastthemostimportant
factsaboutcompanieswhenitwasneithersufficientlyknowledgablenor
interestedtoreadthecompleteprospectus;
(ii)itwouldfacilitatetherapidprovisionofinformationtoamore
sophisticatedpublicandenableittodiscriminateamongthelarge
numberofsecuritiesofferedbeforeundertakingananalysisingreater
depthonthebasisofcompleteprospectuses ;
(iii)itwouldstimulateinterestinsecuritiesandaccustomthepublictotake
accountofmorerationalfactorswhenreachinginvestmentdecisions;
(iv)itwouldcontributegenerallytoraisingthestandardofeconomic
informationandknowledgeaboutcompanies.
4.Finally,provisionismadetoforbidcompaniesandfinancial
intermediaries actingontheirbehalfinnewissueworkorinanadmissionto
quotationtouseinformationnotcontainedintheprospectusinorderthatthe
lattershallreallybethemostcompletedocumentandthatunchecked
particularsshallnotbeusedtothedetrimentofthepublic.
Article17:Newfactors
»
Therequirementtopublishanyimportantnewfactorsemergingbetweenthe.
timethatthecontentsoftheprospectusarefinalisedandstockexchange
dealingsopenisjustifiedbythenecessityforthepublictohaveanuptodate
andcompleteinformationdocumentatitsdisposal.However,onlyfactors'
likelytoinfluencethepublic'sevaluationofthesecuritiesinquestionshouldbe
consideredimportant.'
Themethodofcheckingsuchsupplementstotheprospectuswillbethesame
asfortheprospectusitself. .
Inprinciple,themethodsofpublicationwillalsobethesamebuttheymaybe
decidedcasebycasebythecompetentauthority.
SectionIV:ProceduresforcooperationbetweenMemberStatesinthe
implementation oftheDirective
Article18:TransactionsaffectingseveralMemberStates
Implementation oftheDirectivewillresultinaconsiderabledegreeof
alignmentintheregulationsandpracticesconcerninginformationatthetime
64 S.8/72

ofadmissiontostockexchangequotationinthevariousMemberStates.
However,itwillnotleadtoidenticalrequirementsforissuers,sinceMember
Stateswillbefreetogobeyondtheminimumstandardslaiddowninthe
Directiveandthecompetentauthoritieswillhave,inaddition,somelatitudeof
interpretationevenofcertainidenticalrules.
TheDirectiveshouldnotonlyimprovetheprocessofinformingandprotecting
thesaveratnationallevelbutshouldalsofacilitatequotationonseveralstock
exchangeswithintheCommunitybysimplifyingtheformalitiestowhichthe
issuerissubject.Tothisend,itwasfeltadvisabletoprovideforvarious
waysofcoordinatingtherequirementsimposedbytheauthoritieswithout,
however,challengingtheirautonomyindecision-making .
1.Itwasfeltadvisabletorequirethattheauthoritiescoordinateasfaras
possibletheir-prospectusrequirements forissuersseekingquotation
simultaneously onthestockexchangesofseveralMemberStatesinorderto
arriveatasingletextforthegreaterpartoftheprospectus.Thiscouldbe
achievedbyanappropriateuseofthepowersoftheauthorities.
2.Itwasthoughtdesirablethatasimilarresultshouldbeachievedwhere
admissionstoquotation,thoughnotsimultaneous ,takeplaceatanintervalof
lessthansixmonths.
3.Finally,itisrecommendedthat,bycooperatingwitheachother,the
authoritiesofMemberStatesonwhosestockexchangesthe-^amesecurityis
quotedshouldalsoensurethatinformationmadeavailableinonemarket
whichmightinfluenceassessmentofthemeritsofthesecurityismadeavailable
atoraroundthesametimeinallcentres.
Artide19:ContactGroup
1.Implementation oftheDirectiveandespeciallythatoftheprospectus
Scheduleswillprobablyraiseproblemsofinterpretation .Itisimpossibleto
predictallthepracticaldifficultieswhichcouldariseinindividualcases.
Sincethecompetentauthorities–whointhelastanalysiswillhaveto
implementtheDirective–willtakedecisionsindependently ofoneanother,it
isnecessarytoinstituteregularconsultationbearingonthepracticalproblems
ofimplementing theDirectiveandespeciallytheSchedulesbetween
representatives oftheseauthoritiesandtheCommissioninordertofacilitate
uniformimplementation oftheDirective.
Whilethecreationofacontactgroupwillmakepossibleacommon
interpretationoftheDirective,itwillnotbeprejudicialtotheprerogatives
investedbytheTreatyintheCommunityinstitutions–especiallythepowerof
interpretation possessedbytheCourtofJustice–andthedutyofthe
Commissiontoseetotheimplementation ofCommunityprovisions.
S.8/72 65

Norwillthecontactgrouphavethepowertoinstitutefurtherrequirements
forthecompetentauthoritiesorforthosesubjecttotheircontrol;however,it
willbeabletobringadministrative practicesclosertogetherandassureas
uniformanimplementation aspossibleoftheCommunityprovisions.
2.Moreover,experienceinallcountrieswherepublicationandapprovalof
prospectusesarerequiredhasshowntheneedforgradualimprovements and
additionstothese.Suchimprovements andadditionsmaybecomeessentialin
ordertotakeaccountofnewsituationscreatedby,forinstance,developments
inlaw,financialtechniquesortheeconomicandmonetarysituationsinboth
Memberand.non-MemberStatesinwhichissuersseekingastockmarket
quotationfortheirsecuritiesaredomiciled.
Itwillbeimpossibletomakesuchadditionsandimprovements bindingat
Communitylevelwithoutfurtherdirectives.However,takingintoaccount
thegeneraldutyincumbentonthecompetentauthoritiestoensurethatthe
prospectusgivesacorrectimpressionoftheissuer'sposition,insofarasthese
authoritiesareentitledtorequireinformationadditionaltothatstipulatedin
theSchedulesannexedtothepresentDirective,andinsofarastheirpowers
enablethemtorequireorrecommendsuchadditionswithoutamendingtheir
nationallaw,itwillbehelpfulfortherepresentatives oftheseauthoritiesto
agreealsoontheextentofadditionalinformationwhich"theywillrequireor
recommendwithintheirowncountries..Thisconcertingofaction,already
practisedonabilateralbasis,canbetterbeachievedatmultilaterallevel
withinthecontactgroup.
3.Finally,thisgroupwillhaveaconsultativefunctionandwillassistthe
Commission,ifnecessary,inanynewinitiativesitmayconsiderappropriatein
thisfield.
66 S.S/72

DRAFTRECOMMENDATION OFTHECOUNCIL

TheCounciloftheEuropeanCommunities,
"Whereas,inordertocontributetointerpenetration ofcapitalmarketsandat
thesametimeensureadequateprotectionforsavings,itisappropriateto
ensurethatinformationwhichissufficientandasobjectiveaspossibleis
providedforpresentandpotentialholdersofthesecuritiesissuedbytheStates
ortheirlocalauthoritieswhenthesesecuritiesareadmittedforquotationon
theOfficialListofastockexchange;andwhereasbetterinformationforthe
publicconcerningthesesecuritiesisatthesametimecalculatedtostimulateits
interestinthem,andthustofacilitatethefinancingofthesepublicissuers;
Whereas,forthispurpose,itwouldbedesirablethattheMemberStatesshould
voluntarilyintroduceforsecuritiesissuedbythemselves,byanotherState,or
byalocalauthorityaprospectussimilartotheonewhichisrequiredof
companieswithinthemeaningofArticle58(2)oftheTreatybyCouncil
DirectiveNo.of..
Recommends theMemberStatestomakeitaconditionoftransferable
securitiesissuedbyaStateorbyalocalauthoritybeingadmittedor
introducedtotheOfficialListofanystockexchangesituatedwithintheir
territorythataprospectusispublishedormadeavailabletothepublicwhich
comprisesinformationconcerningtheprospectussignatoriesandtheoperation
similartothatspecifiedinChapters1and2ofthe"debentures"ScheduleB
annexedtoCouncilDirectiveNo....of...andwhichcontainsinformation
ontheeconomicandfinancialsituationoftheissuer.
S.8/72 69