Proposal for a Directive of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading
Date: 2001-05-30
Institutions: European Commission
Subjects: approximation of laws, financial institution, public awareness campaign, securities, takeover bid

C 240 E/272

EN

Official Journal of the European Communities

28.8.2001

Proposal for a Directive of the European Parliament and of the Council on the prospectus to be
published when securities are offered to the public or admitted to trading

(2001/C 240 E/33)

COM(2001) 280 final (cid:151) 2001/0117(COD)

(Submitted by the Commission on 1 June 2001)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular Articles 44 and 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) Council Directive 80/390/EEC of 17 March 1980 co-ordi-
nating the requirements for the drawing up, scrutiny and
distribution for the listing particulars to be published for
the admission of securities to official stock exchange
listing (1) and Council Directive 89/298/EEC of 17 April
1989 co-ordinating the requirements for the drawing up,
scrutiny and distribution of
to be
published when transferable securities are offered to the
public (2) have been adopted several years ago introducing
a partial and complex mutual recognition mechanism
which is unable to ensure the objective of
the single
passport
should be upgraded,
said Directives
updated and grouped together into a single text.

the prospectus

the

the internal market as set out

(2) This Directive constitutes an instrument essential to the
in a
achievement of
timetable
from the
form in the Communication
Commission (cid:151) Risk Capital Action Plan (3) and the
Communication from the Commission (cid:151) Implementing
the framework for financial market: action Plan (4) facili-
tating the widest possible access to investment capital on
an EU-wide basis, including for small and medium size
enterprises (SMEs) and start-ups, by means of a (cid:145)single
passport(cid:146) for issuers.

(3) On 17 July 2000, the Council set up the Committee of
Wise Men on the regulation of European securities
markets. In its initial report the Committee stresses the
lack of an agreed definition of public offer of securities,

(1) OJ L 100, 17.4.1980, p. 1. Directive as last amended by European
Parliament and Council Directive 94/18/EC (OJ L 135, 31.5.1994,
p. 1).

(2) OJ L 124, 5.5.1989, p. 8.
(3) SEC(1998) 552 final.
(4) COM(1999) 232 final.

with the results that the same operation is analysed as a
in some Member States and not in
private placement
others;
from
the
raising capital on an European wide basis and therefore
from having real access to a large, liquid and integrated
financial market.

system discourages

current

firms

level

approach, namely

(4) In its final report the Committee of Wise Men proposed
the introduction of new legislative techniques based on a
four
framework principles,
implementing measures, co-operation and enforcement.
the Directive, should confine itself
Level 1,
to broad
general
(cid:145)framework(cid:146) principles while Level 2 should
contain technical implementing measures to be adopted
by the Commission with the assistance of a committee.

(5) The Stockholm European Council Resolution endorsed the
final report of
the Committee of Wise Men and the
proposed four level approach to make the regulatory
process
legislation more
efficient and transparent.

for Community

securities

(6) According to the Stockholm European Council Level 2
implementing measures should be used more frequently,
to ensure that technical provisions can be kept up to date
with market and supervisory developments and deadlines
should be set for all stages of Level 2 work.

(7) Implementing measures adopted pursuant to this Directive
should aim to ensure investor protection and market
integrity,
in accordance with high regulatory standards
adopted in the relevant international fora.

(8) Full coverage of equity and debt securities admitted to
trading on regulated markets as defined by Council
Directive 93/22/EEC of 10 May 1993 on investment
services in the securities field (5) and not only securities
which have been admitted to the official
list of stock
exchanges is also needed to ensure the protection of
in this
investors. The wide definition of
Directive is valid only for this Directive and consequently
in no way affects the various definitions of
financial
legislation for other
instruments used in national
negotiable
It
taxation.
such
purposes
instruments only.

securities

covers

as

(5) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive
2000/64/EC of the European Parliament and of the Council (OJ L
290, 17.11.2000, p. 27).

28.8.2001

EN

Official Journal of the European Communities

C 240 E/273

(9) The grant of a single passport

to the issuer valid
throughout the Community and the application of the
principles of home Member State supervision requires
the identification of the home Member State as the one
best placed to regulate the issuer for the purposes of this
Directive.

(15) Fast track procedures for issuers admitted to trading on
regulated market and frequently raising capital on the
markets require the introduction at Community level of
a registration document system. The system is based on a
separate
new format of prospectus
documents. Issuers whose securities are not admitted to
trading on regulated markets may wish to draft
the
prospectus as a single document.

composed of

(10) One of

the objective of

investors and their

this Directive is to protect
investors. It is therefore appropriate to take account of
the different requirements for protection of the various
categories of
level of expertise.
Disclosure provided by the prospectus is not required
for offers limited to the same categories as far as securities
have been bought for one’s own account. Any resale to
the public or public trading through admission to trading
on a regulated market
requires the publication of a
prospectus.

(11) The provision of full, appropriate information concerning
securities and issuers of such securities promotes the
protection of
investors. Moreover, such information is
an effective mean of increasing confidence in securities
and thus of contributing to the proper functioning and
development of securities markets. The form in which this
information is
the
prospectus.

the publication of

required is

like

any other

in securities,
form of
(12) Investment
investment,
involves risk. Safeguards for the protection
of the interests of the actual and potential investors are
required in all Member States in order to put them in a
position to make a correct assessment of such risks so as
to be able to take investment decisions in full knowledge
of the facts.

(13) Such information, which needs to be sufficient and as
objective as possible concerning the financial circum-
stances of
the issuer and the right attaching to the
securities, should be provided in an easy analysable and
comprehensible
the
The
information contained in the prospectus should provide
equivalent protection for investors at Community level.

harmonisation

form.

of

(14) Best practices have been adopted at international level in
order to allow multinational offerings to be made using a
single set of disclosure standards by the International
Organisation
the
Securities Commissions
IOSCO disclosure standards (1) will upgrade information
available for the markets and investors and, at the same
time will simplify the procedure for European issuers
wishing to raise capital in third countries.

(IOSCO);

(16) Investors are protected by ensuring publication of reliable
information. The companies admitted to trading on a
regulated market are subject to ongoing disclosure obli-
to publish updated information in a
gation and not
coherent and aggregate format;
the yearly update of
their registration document is a suitable way to ensure
the publication of consistent and easily understandable
issuer. To simplify and avoid
information on the
excessive burden for issuers, they should be allowed to
use
reporting
document
requirements laid down by the Fourth Council Directive
78/660/EEC of 25 July 1978 based on Article 54(3)(g) of
the Treaty on the annual accounts of certain types of
companies (2)
Seventh Council Directive
83/349/EEC of 13 June 1983 based on the Article
54(3)(g) of the Treaty on consolidated accounts (3).

registration

and

the

the

the

for

(17) The opportunity of allowing issuers to incorporate by
reference documents containing the information to be
disclosed under prospectus provided that the documents
incorporated by reference have been previously filed and
accepted by the competent authority should facilitate the
procedure of drawing a prospectus and lower the costs for
the issuers without endangering investor protection.

(18) Differences regarding the efficacy, methods and timing of
the check of the information given therein are not only to
make it more difficult for undertakings to raise capital or
to obtain admission to trading in several Member States
but also to hinder the acquisition by investors residing in
one Member State of securities offered by an issuer estab-
lished in another Member State or traded in another
Member State. These differences should be eliminated by
harmonising the rules and regulations in order to achieve
an adequate degree of equivalence of
the safeguards
required in each member States to ensure the provision
information which is sufficient and as objective as
of
possible for actual or potential securities holders.

(19) To facilitate the circulation of

the prospectus,

the various documents
electronic
use
of
composing
communication facilities
should be
internet
encouraged. The prospectus should be always delivered
in paper form free of charge to investors on request.

the
such as

(1) International Disclosure Standards for cross-border offering and
initial listings by foreign issuers, Part I International Organisation
of Securities Commissions, September 1998.

(2) OJ L 222, 14.8.1978, p. 11. Directive as last amended by Directive

1999/60/EC (OJ L 162, 26.6.1999, p. 65).

(3) OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive

90/605/EEC (OJ L 317, 16.11.1990, p. 60).

C 240 E/274

EN

Official Journal of the European Communities

28.8.2001

(20) It

is also necessary,

in
in order
Community legislation which would undermine public
confidence and therefore prejudice the proper functioning
of
to harmonise procedures under
which advertising can take place.

to avoid loopholes

financial markets,

intervened after

(21) Any new fact liable to influence the assessment of the
the
investment
prospectus but before the closing of
the offer or the
starting of the trading on a regulated market should be
properly evaluated by investors and therefore requires the
approval
of
information.

the publication of

dissemination

supplement

and

of

a

(22) The obligation for an issuer to translate the full prospectus
into all the relevant national languages discourages cross-
border offerings or multiple trading. To facilitate cross-
border offers, where the prospectus is drawn up in a
language that is customary in the sphere of finance and
accepted by the competent authority, the host country
should only be entitled to require a summary in its
domestic language.

(23) The competent authority of the host Member State should
be entitled to receive a certificate from the competent
authority of the home Member State which states that
the prospectus has been drafted in accordance with this
Directive. In order to ensure that the purposes of this
it is also necessary to
Directive will be fully achieved,
include within its
issued by issuers
governed by the laws of third countries.

scope securities

(24) A variety of competent authorities in Member States,
having different responsibilities, creates unnecessary costs
and overlapping of responsibilities without providing any
additional benefit. The private for-profit nature of certain
entities may raise conflicts of interest and is unsuitable for
ensuring protection of the markets and investors. In each
Member State a competent authority should be designated
to approve prospectuses. It should be established as an
administrative authority and in such a form that its inde-
pendence
is guaranteed and
conflicts of interests are avoided.

from economic

actors

(25) A common minimum set of powers for the competent
authorities will guarantee the effectiveness of their super-
vision. Flow of information to the markets required by
Council Directive 79/279/EEC of 5 March 1979 co-ordi-
nating the conditions for the admission of securities to
official stock exchange listing (1) has to be ensured and
action against breaches taken by competent authorities.

(26) For the purposes of carrying out their duties, co-operation

between competent authorities is required.

(27) Since the measures necessary for the implementation of
this Directive are measures of general scope within the
meaning of Article 2 of Council Decision 1999/468/EC of
28 June 1999 laying down the procedures for the exercise
of implementing powers conferred on the Commission (2),

they should be adopted by use of
procedures provided for in Article 5 of that Decision.

regulatory

the

(28) The Member States should lay down rules on penalties,
to
applicable
including
infringements of
this Directive and
the provisions of
ensure that they are implemented. Those penalties must
be effective, proportionate and dissuasive.

administrative

sanctions,

(29) Provision should be made for the right to apply to the
Courts against decisions by the competent national auth-
orities in respect of the application of this Directive.

(30) In accordance with the principle of proportionality, it is
necessary and appropriate for the achievement of
the
basic objective of ensuring the completion of a single
securities market to lay down rules on a single passport
for
is
necessary in order to achieve the objectives pursued in
accordance with the third paragraph of Article 5 of the
Treaty.

issuers. This Directive confines

to what

itself

(31) This Directive

respects

and
the
observes the principles recognised in particular by the
Charter of
the European
Union.

the Fundamental Rights of

fundamental

rights

(32) Directives 80/390/EEC and 9/298/EEC should be repealed

accordingly,

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter and scope

of

The purpose

1.
to harmonise
requirements for the drawing up, scrutiny and distribution of
the prospectus to be published when securities are offered to
the public or admitted to trading.

this Directive

is

2.

This Directive shall apply to securities which:

(a) are offered to the public in one or more Member States, or

(b) are admitted to, or are the subject of a procedure for
admission to, trading on a regulated market situated or
operating within a Member State.

3.

This Directive shall not apply to:

(1) OJ L 66, 16.3.1979, p. 21.
(2) OJ L 184, 17.7.1999, p. 23.

(a) units issued by collective investment undertakings other

than the close-end type,

28.8.2001

EN

Official Journal of the European Communities

C 240 E/275

(b) securities issued by a Member State or by one of a Member
State’s regional or local authorities, by public international
bodies of which one or more Member States are members
or by the European Central Bank.

(i)

(cid:145)collective
close-end type(cid:146) means unit
companies:

investment undertaking other

than the
trusts and investment

Article 2

Definitions

(cid:151) the object of which is the collective investment of
capital provided by the public, and which operate on
the principle of the risk spreading, and

1. For the purposes of this Directive, the following definitions

shall apply:

(cid:151) the units of which are, at the holder’s request, repur-
chased or redeemed, directly or indirectly, out of the
assets of these undertakings;

(a)

b)

(c)

(cid:145)securities(cid:146) means any shares in companies and other
transferable securities equivalent to shares in companies,
bonds and other forms of securitized debt which are
negotiable on a regulated market and any other trans-
ferable securities normally dealt in giving the right to
acquire any such transferable securities by subscription
or exchange or giving rise to cash settlement;

(cid:145)offer of securities to the public(cid:146) means an offer, invi-
tation or promotional message, in any form, addressed
to the public, whose objective is the sale or subscription
of securities including by placing securities through
financial intermediaries;

(cid:145)qualified investors(cid:146) means credit institutions, investment
firms, other authorised or
insti-
investment
insurance
tutions,
schemes and their management companies, pension
funds and retirement funds, supranational
institutions,
government and central administrative authorities;

regulated financial
collective

companies,

(d)

(cid:145)issuer(cid:146) means a person who issues or proposes to issue
securities;

(e)

(cid:145)person making an offer(cid:146) (or (cid:145)offeror(cid:146)) means a person
who intends to offer securities to the public;

(f)

(cid:145)regulated market(cid:146) means a market as defined by Article
1(13) of Directive 93/22/EEC;

(g)

(cid:145)home Member State(cid:146) of an issuer means:

(j)

(cid:145)units of a collective investment undertaking(cid:146) means
securities issued by a collective investment undertaking
representing rights of the participants in such an under-
taking over its assets.

2. The definitions referred to in paragraph 1 shall in order to
take account of technical developments on financial markets
and to ensure uniform application in the Community of this
Directive be clarified and adapted by the Commission in
accordance with the procedure referred to in Article 22(2).

Article 3

Conditions for offer of securities to the public

1. Member States shall ensure that any offer of securities to
the public within their territories is subject to the publication
of a prospectus by the person making the offer.

This obligation shall not apply to the following types of

2.
offer, excluding any subsequent resale to the public:

(a) where the securities are offered to qualified investors for

their own account;

(b) where the offer

is addressed to a restricted circle of
persons, the number of which is below 150 per Member
State or below 1 500 in the case of a multinational offer;

(c) where the securities offered can be acquired only for a

consideration of at least EUR 150 000 per investor.

(cid:151) the Member State where an issuer has its registered

office;

The obligation provided for in paragraph 1 shall not

3.
apply to the offer of securities of the following types:

(cid:151) in the case of an issuer incorporated in a third
securities

country,
the Member State where its
have been admitted to trading for the first time;

(a) shares issued in substitution for shares already traded on
the same regulated market if the issuing of such new shares
does not involve any increase in the issued capital;

(h) (cid:145)host Member State(cid:146) means the State where an offer to
the public is made or admission to trading is sought
when different from the home Member State;

(b) securities offered in connection with a take over provided
that a document containing information which is regarded
by the competent authority as equivalent to that of the
prospectus is available;

C 240 E/276

EN

Official Journal of the European Communities

28.8.2001

(c) securities offered in connection with a merger provided
that
information which is
containing
regarded by the competent authority as equivalent to that
of the prospectus is available;

document

a

(d) shares offered in exchange with no overall

increase of
capital to existing shareholders or allotted free of charge;

(e) securities offered or

former
employees upon condition that it is not in exchange for
any form of payment or consideration;

allotted to existing or

(f)

shares resulting from the conversion of convertible debt
securities or from the exercise of the rights conferred by
warrants or shares offered in exchange for exchangeable
debt securities, provided that a prospectus relating to
those convertible or exchangeable debt securities or those
warrants was available;

(g) securities issued, with a view to their obtaining the means
necessary to achieve their objectives, by associations with
legal status or non-profiting making bodies, recognised by
the State.

4.
The terminology and the exemptions provided for in
paragraphs 2 and 3 shall in order to take account of devel-
opment on financial markets in the application of this Directive
be clarified and adapted by the Commission in accordance with
the procedure referred to in Article 22(2).

Article 4

Conditions for admission of securities to trading on
regulated market

Member States shall ensure that any admission of securities to
trading on a regulated market situated or operated within their
territories is subject to the availability of a prospectus.

That obligation is deemed to be satisfied when the issuer has
filed with home competent authority the registration document
and, where necessary,
the
requirements set out in Article 9 of updating annually the
registration document.

the securities note, and fulfils

CHAPTER II

DRAWING UP OF THE PROSPECTUS

Article 5

The prospectus

and prospects of the issuer and of the rights attaching to such
securities.

The information provided for in paragraph 1 shall be
2.
presented in an easy analysable and comprehensible form
and shall be made available by means of publication of a
single or separate documents.

The prospectus published as a single document shall

3.
include at least the information referred to in Annex I.

4.
The prospectus composed of separate documents shall
include a registration document, a securities note and a
summary note. The registration document shall
include at
least the information referred to in Annex II. The securities
the information referred to in
note shall
Annex III. The summary note shall
the
include at
information referred to in Annex IV.

include at

least

least

5. Member States shall ensure that the obligation provided
for in paragraph 1 is incumbent upon the administrative,
management or supervisory bodies of the issuers, the offeror
and the guarantor as the case may be.

Article 6

Minimum information

1.
Detailed rules regarding the specific information which
must be included in the prospectus according to Article 5(3)
and (4),
type of
in the form of models for the different
securities and of issuers shall be adopted by the Commission
in accordance with the procedure referred to in Article 22(2).
These rules shall be adopted within 180 days after the entry
into force of this Directive.

The rules

2.
referred to in paragraph 1 shall be in
accordance with the information requirements set out by the
International Organisation of Securities Commissions and
namely in Part I of the International Disclosure Standards for
cross-border offering and initial listings.

3. Member States shall ensure that where the final offering
price and amount of securities which will be allotted to the
public cannot be included in the prospectus, the prospectus
shall contain the criteria, and/or the conditions according to
which, the above elements will be determined. The final terms
the home
shall be filed with the competent authority of
Member State and made available according to the modalities
provided for in Article 12(2).

1.
The prospectus shall contain all the information which,
according to the particular nature of the issuer and of the
securities offered to the public or admitted to trading,
is
necessary to enable investors to make an informed assessment
of the assets and liabilities, financial position, profit and losses,

Detailed rules on modalities of

4.
the offer in order to
ensure uniform application of this Directive shall be adopted
by the Commission in accordance with the procedure referred
to in Article 22(2). These rules shall be adopted within 180
days after the entry into force of this Directive.

28.8.2001

EN

Official Journal of the European Communities

C 240 E/277

Article 7

Language and format of the prospectus

competent authority of the home Member State, pursuant to
Article 19.

The prospectus shall be drawn up in a language accepted

1.
by the competent authority in the home Member State.

2.
Issuers whose securities are admitted or are the subject of
a procedure for admission to trading on regulated markets shall
publish a prospectus comprising the separate documents
provided for in Article 5(4).

Issuers whose securities are not admitted to trading and
3.
are not the subject of a procedure for admission to trading on
a regulated market may decide to draw up the prospectus as a
single document, including at least the information referred to
in Annex I.

Article 8

Use of a registration document, securities note and
summary note

1.
An issuer who has already filed with the competent
authority the registration document shall be required to draw
up only the securities note and the summary note when
securities are publicly offered or admitted to trading.

In any case, in addition to the information items required
2.
under Article 5(4), the securities note shall provide information
that would normally be provided in the registration document
if there has been a material change or recent development
since the registration document was published.

Article 9

Annual updating of the registration document

1.
Subsequent to the first filing the registration document
shall be updated on a regular basis by the issuer each year after
the approval of
the financial statements according to the
requirements applicable to the issuer in the home Member
State. The registration document
shall be filed with and
scrutinised by competent authority of the home Member State.

2. Member States may allow the issuer to use the regis-
tration document
for the purpose of complying with the
requirement laid down in Article 46 of Directive 78/660/EEC
and Article 36 of Directive 83/349/EEC.

Article 10

Incorporation by a reference

1. Member States shall allow information to be incorporated
in the prospectus by referring to one or more documents,
which have been filed and published in accordance with this
approved by the
Directive. Such information shall be

2. When information is incorporated by reference, a cross-
reference list must be provided in order to enable investors to
easily identify specific items of information.

Detailed rules concerning the information to be incor-
3.
porated by a reference in order to ensure uniform application
in the Community of this Directive shall be adopted by the
Commission in accordance with the procedure referred to in
Article 22(2). These rules shall be adopted within 180 days
after the entry into force of this Directive.

CHAPTER III

ARRANGEMENTS FOR THE SCRUTINY AND DISTRIBUTION
OF THE PROSPECTUS

Article 11

Approval and publication of the prospectus

No prospectus

1.
it has been
approved by the competent authority of the home Member
State.

shall be published until

The competent authority of the home Member State shall
2.
notify the issuer or the offeror of its decision regarding the
approval of the prospectus within 15 days of the submission of
the draft prospectus or, should the competent authority verify
that
require any further
the issuer’s supplying the
information, within 15 days of
required information.

the submission is incomplete or

3.
The time limit referred to in paragraph 2 shall be reduced
is required for the securities note
to 7 days if the approval
only. It shall be extended to 40 days if public offer involves
securities that are not already admitted to trading.

4.
If the competent authority of the home Member State
fails to give a decision within the time limit laid down in
paragraphs 2 and 3, this shall be deemed to be a rejection
of the application, such rejection shall give right to apply to
the courts.

5.
This Directive shall not affect the competent authority’s
liability, which shall continue to be governed solely by the
national law.

Detailed technical rules concerning the scrutiny of the
6.
to take
prospectus and adaptation of deadlines
account of developments on financial markets and to ensure
uniform application of this Directive shall be adopted by the
Commission in accordance with the procedure referred to in
Article 22(2). These rules shall be adopted within 180 days
after the entry into force of this Directive.

in order

C 240 E/278

EN

Official Journal of the European Communities

28.8.2001

Article 12

Availability of the prospectus

1.
The prospectus once approved shall be filed with the
competent authority of the home Member State in an elec-
tronic format and must be made available to the public
immediately by the issuer or the offeror.

The prospectus shall be deemed available to the public by

2.
the issuer or the offeror when published either:

(a) by insertion in one or more newspapers

circulated
throughout the Member States in which the offer is made
or the admission to trading is sought, or widely circulated
therein, or

(b) in the form of a brochure to be made available, free of
charge, to the public at the offices of the market on which
the securities are being admitted to trading, or at
the
registered offices of the issuer and at the offices of the
financial intermediaries placing or selling the securities,

State which shall check them before publication against the
principles contained in this Article. Those documents shall
state that a prospectus will be published and indicate where
investors will be able to obtain it.

Advertising shall be clearly recognisable as such. The
2.
information contained in an advertisement
shall be fair,
accurate and consistent with that contained in the prospectus.

3.
In any case, the information concerning the offer or the
admission to trading divulged in an oral form, even if not for
advertising purposes, shall be consistent with that contained in
the prospectus.

4.
Information addressed to qualified investors or special
categories of investors, including information disclosed in the
context of meetings, shall also be disclosed to the public.

(c)

form on the

in electronic
if
applicable, on the web-site of the financial intermediaries
placing the securities.

issuer’s web-site

and,

3.
In any case, the approved prospectus shall be available for
consultation on the web-site of the competent authority of the
home Member State.

In the case of a prospectus drawn up according to Article
4.
the documents composing the prospectus may be
5(4),
published and circulated separately as
the said
documents are made available, free of charge, to the public,
according to the arrangements established in paragraph 2.

long as

5.
The text and the format of the prospectus, and/or the
supplements to the prospectus, published or made available
to the public, should at all times be identical to the original
version approved by and filed with the competent authority.

6. Where the prospectus is made available by publication in
electronic form, a paper copy must nevertheless, be delivered
free of charge to the investor on request.

Detailed technical rules on publication and availability of
7.
the prospectus
shall be adopted by the Commission in
accordance with the procedure referred to in Article 22(2).
These rules shall be adopted within 180 days after the entry
into force of this Directive.

Article 13

Advertising

1.
Advertisements, notices, posters shall be communicated
in advance to the competent authority of the home Member

5.
The dissemination of advertisements, notices, posters
announcing the intention to offer securities to the public or
the admission to trading, before the prospectus has been made
the
available
subscription shall also comply with technical rules laid down
in accordance with the procedure referred to in Article 22(2).
These technical rules shall be adopted by the Commission
within 180 days after the entry into force of this Directive.

to the public or before

the opening of

Article 14

Supplement to the prospectus

Every significant new factor capable of affecting assessment of
the securities which arises or is noted between the time when
the prospectus is approved and the definitive closure of the
offer or, if applicable, the time when trading begins shall be
mentioned in a supplement to the prospectus, scrutinised in
the same way and published and made available to the public
in accordance with at least the same arrangements as were
applied when the original prospectus was disseminated.

CHAPTER IV

MULTINATIONAL OFFERINGS AND ADMISSION TO TRADING

Article 15

Mutual recognition

1. Where an application has been made for an offer or
admission to trading on a regulated market in one or more
Member States and the securities have been the subject of a
prospectus approved in the home Member State according to
Article 11, in the three months preceding the application, the
competent authority of the host Member State shall accept the
prospectus for public offer or admission to trading.

28.8.2001

EN

Official Journal of the European Communities

C 240 E/279

the competent authority of

If more than three months have elapsed since the
2.
approval of the prospectus by the competent authority of the
home Member State,
the host
Member State where the offer is made or the admission to
trading takes place may require for the publication of an
updated securities note
to be
in the case of a
approved as provided for in Article 11(1),
prospectus drawn up according to Article 5(4).
It may
require for a publication of an updated prospectus in the
case provided for in Article 5(3).

and summary document

the prospectus only if

3.
The competent authority of the host Member State may
refuse to accept
information items
the relevant host markets according to the
specific to all
rules referred to in Article 6 are not contained in the securities
note provided for in Article 5(4), or in the prospectus in the
case provided for in Article 5(3).

Article 16

Language regime

is

sought

in more than one Member State,

Where an offer is made or admission to trading on a regulated
market
the
prospectus or, where appropriate, the registration document
and the securities note shall also be made available in a
finance which is
language customary in the sphere of
generally accepted by the competent authority of
the host
Member State. In such case, the competent authority of the
host Member State may only require that the summary note
be translated into its domestic language.

Article 17

Notification

The competent authority of
the home Member State shall
provide the competent authority of the Member States where
the admission to trading is made with the
the offer or
prospectus and a certificate of approval attesting that
the
document has been drawn up in accordance with this
Directive.

Each Member State shall notify the Commission and the
Member States of the text of the rules applicable to issuers
in third countries and shall notify it without delay of any
subsequent amendment affecting them. If within two months
of Member States and the Commission having been so notified
an objection is raised by a Member State or the Commission
on the equivalence of such rules, the Commission shall subject
the matter to the procedure referred to in Article 22(2). The
Member
to
the
taken in accordance with that
implement
procedure.

shall
the decisions

appropriate measures

State

take

Each Member State shall forward to the Commission without
delay a list of the issuers incorporated in a third country whose
prospectuses have been approved. This list shall be updated
every six months.

In the case of offer or admission to trading of securities
2.
issued by an issuer incorporated in a third country in another
Member State the requirements set out under Articles 15, 16
and 17 shall apply.

3.
Technical rules to facilitate a concerted attitude between
the Member States and ensure an uniform application of
paragraphs 1 and 2 shall be adopted by the Commission in
accordance with the procedures referred to in Article 22(2).

4.
No later than three years after the entry into force of this
Directive, the Commission shall draw up a report taking into
account the experience acquired in applying this Article.

CHAPTER V

COMPETENT AUTHORITIES

Article 19

Powers

1.
Each Member State shall designate the competent admin-
istrative authority competent to carry out the duties provided
for in this Directive and to ensure that this Directive is applied.
They shall inform the Commission thereof.

Article 18

Issuers incorporated in third countries

The competent authority of

the home Member State,
1.
responsible for approving the prospectus of
issuers having
their registered office in a third country may allow the issuer
to use a prospectus drawn up for an offer or admission to
trading in a third country provided that

The competent authority must have all

2.
the powers
necessary for the performance of its functions. A competent
authority that has received an application for approving a
prospectus shall at least be empowered to:

(a) require issuers to include in the prospectus supplementary

information if necessary for investor protection;

(a) this prospectus has been drawn up according to the IOSCO

Disclosure Standards and

(b) require issuers, and the persons that control them or are
controlled by them to provide information and documents;

(b) the information requirements,

including information of
financial nature, are equivalent to the requirements under
this Directive.

(c) carry out on-site inspections;

(d) require auditors and managers to provide information;

C 240 E/280

EN

Official Journal of the European Communities

28.8.2001

(e) suspend a public offer for a maximum of 10 days if it has
grounds for suspecting that the provisions of this Directive
have been infringed;

(f) prohibit or suspend advertising for a maximum of 10 days
if it has grounds for suspecting that the provisions of this
Directive have been infringed;

(g) prohibit a public offer if it finds that the provisions of this

Directive have been infringed;

(h) suspend, or ask the relevant regulated markets to suspend,
the trading for a maximum of 10 days if it has grounds for
suspecting that the provisions of this Directive have been
infringed;

(i) prohibit

trading if
Directive have been infringed;

finds that

it

the provisions of

this

(j) make public the fact that an issuer is failing to comply with

its obligations.

3.
The competent authority shall, once the securities have
been offered to the public or admitted to trading on regulated
markets, have the power to:

(a) require the issuer to disclose all material information which
may have an effect on the assessment of the securities
offered to public or admitted to trading on regulated
markets in order to ensure investor protection or the
smooth operation of the market;

(b) suspend or ask the relevant regulated market to suspend
in its opinion, the issuer’s
to

trading would be detrimental

the securities from trading if,
situation is such that
investors’ interests;

(c) ensure that

the issuers whose securities are traded on
regulated markets comply with the obligations provided
for under Article 17 of Directive 79/279/EEC and that
and
equivalent
equivalent
to all
securities holders who are in the same position in all
Member States where the offer is made or the securities
are traded.

information is provided to investors
treatment

is granted by the issuer

Article 20

Professional secrecy

1. Member States shall ensure that all persons employed or
formerly employed by the competent authorities shall be
bound by the obligation of professional secrecy. Accordingly
information which they may receive in the
no confidential
course of
their duties may be divulged to any person or
authority, save in summary or aggregate form such that indi-
vidual
identified, without
prejudice to cases covered by criminal law.

issuers or markets

cannot be

confidential

information.

thus
exchanging
exchanged shall be covered by the obligation of professional
secrecy to which the persons employed or formerly employed
by the competent authorities receiving the information are
subject.

Information

Article 21

Precautionary measures

1. Where the competent authority of the host Member State
finds that irregularities have been committed by the issuer or
by the financial
the public offer
institutions in charge of
the issuer’s obligations, resulting
procedures or breaches of
from the fact that the securities are admitted to trading,
it
shall refer these findings to the competent authority of the
home Member State.

2.
If, despite the measures taken by the competent authority
of the home Member State or because such measures prove
inadequate, the issuer or the financial institution in charge of
the public offer procedures persist in violating the relevant
legal or regulatory provisions, the competent authority of the
host Member State, after informing the competent authority of
the home Member State shall take all the appropriate measures
in order
investors. The Commission shall be
informed of such measures at the earliest opportunity.

to protect

the Member
After consulting the competent authorities of
States concerned,
the
competent authority of the host Member State must amend
or abolish those measures.

the Commission may decide that

3.
Each decision taken by the competent authority of the
host Member State shall be properly justified and subject to the
right to apply to the courts in the Member State which adopted
it.

CHAPTER VI

IMPLEMENTING MEASURES

Article 22

Committee

The Commission shall be assisted by the European
instituted by Commission Decision

1.
Securities Committee,
(2001/. . ./EC) (1).

2. Where reference is made to this paragraph, the regulatory
procedure laid down in Article 5 of Decision 1999/468/EC
shall apply, in compliance with Article 7 and Article 8 thereof.

The competent authorities

2.
shall co-operate wherever
necessary for the purpose of carrying out their duties and
shall exchange any information required for that purpose.
Paragraph 1 shall not prevent the competent authorities from

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be three months.

(1) Commission Decision

establishing

the

European

Securities

Committee not yet adopted.

28.8.2001

EN

Official Journal of the European Communities

C 240 E/281

Article 23

Penalties

CHAPTER VII

TRANSITIONAL AND FINAL PROVISIONS

The Member States shall
lay down the rules on penalties,
including administrative sanctions, applicable to infringement
of the national provisions adopted pursuant to this Directive,
and shall take all measures necessary to ensure that they are
implemented. The penalties
sanctions
provided for must be effective, proportionate and dissuasive
in order to promote compliance with those measures. The
Member States shall notify those provisions to the Commission
by 31 December 2003 specified in Article 25 at the latest and
shall notify it without delay of any subsequent amendment
affecting them.

and administrative

Article 24

Right of appeal

Member States shall ensure that decisions taken under laws,
in
regulations
accordance with this Directive are subject
to
apply to the courts.

adopted
to the right

administrative

provisions

and

Article 25

Transposition

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by 31 December 2003, at the latest. When Member
States adopt those provisions they shall contain a reference to
this Directive or be accompanied by such a reference on the
occasion of
their official publication. Member States shall
determine how such reference is to be made.

Article 26

Repeal

Directives 80/390/EEC and 89/298/EEC shall be repealed with
effect from 31 December 2003.

Article 27

Transitional provisions

Issuers whose securities have already been admitted to trading
on a regulated market when the implementing measures
provided for under Article 6 (1) enter into force shall submit
to the competent authority of their home Member State the
registration document required by Article 5(4) on the occasion
of the first presentation of the annual accounts and reports
after that date.

Article 28

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 29

Addresses

This Directive is addressed to the Member States.

C 240 E/282

EN

Official Journal of the European Communities

28.8.2001

ANNEX I

PROSPECTUS

I. SUMMARY

The summary shall give in a few pages the most important information included in the prospectus, at least covering the
following items.

(cid:151) identity of directors, senior management, advisors and auditors

(cid:151) offer statistics and expected timetable

(cid:151) key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of

proceeds; risk factors.

(cid:151) information concerning the issuer

(cid:151) history and development of the issuer

(cid:151) business overview

(cid:151) operating and financial review and prospects

(cid:151) research and development, patents and licences, etc.

(cid:151) trend information

(cid:151) directors, senior management and employees

(cid:151) major shareholders and related party transactions

(cid:151) financial information

(cid:151) consolidated statement and other financial information

(cid:151) significant changes

(cid:151) the offer and admission to trading details

(cid:151) offer and admission to trading details

(cid:151) plan of distribution

(cid:151) markets

(cid:151) selling shareholders

(cid:151) dilution (shares)

(cid:151) expenses of the issue

(cid:151) Additional information

(cid:151) share capital

(cid:151) memorandum and articles of incorporation

(cid:151) documents on display

II. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT, ADVISERS AND AUDITORS

The purpose is to identify the company representatives and other individuals involved in the company’s offering or
admission to trading; these are the persons responsible for drafting the prospectus as required by Article 5 of the
Directive and those responsible for auditing the financial statements.

28.8.2001

EN

Official Journal of the European Communities

C 240 E/283

III. OFFER STATISTICS AND EXPECTED TIMETABLE

The purpose is to provide key information regarding the conduct of any offering and the identification of important
dates relating to that offering.

A. Offer Statistics

B. Method and Expected Timetable

IV. KEY INFORMATION

The purpose is to summarise key information about the company’s financial condition, capitalisation and risk factors. If
the financial statements included in the document are restated to reflect material changes in the company’s group
structure or accounting policies, the selected financial data must also be restated.

A. Selected Financial Data

B. Capitalisation and Indebtedness

C. Reasons for the offer and use of proceeds

D. Risk Factors

V. INFORMATION ON THE COMPANY

The purpose is to provide information about the company’s business operations, the products it makes or the services it
provides, and the factors which affect the business. It is also intended to provide information regarding the adequacy and
suitability of the company’s properties, plant and equipment, as well as its plans for future increases or decreases in such
capacity.

A. History and Development of the Company

B. Business Overview

C. Organisational Structure

D. Property, Plant and Equipment

VI. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The purpose is to provide management’s explanation of factors that have affected the company’s financial condition and
results of operations for the historical periods covered by the financial statements, and management’s assessment of
factors and trends which are anticipated to have a material effect on the company’s financial condition and results of
operations in future periods.

A. Operating Results

B. Liquidity and Capital Resources

C. Research and Development, Patents and Licences, etc.

D. Trend Information

VII. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The purpose is to provide information concerning the company’s directors and managers that will allow investors to
assess such individuals’ experience, qualifications and levels of compensation, as well as their relationship with the
company.

A. Directors and Senior Management

B. Compensation

C. Board Practices

D. Employees

E. Share Ownership

C 240 E/284

EN

Official Journal of the European Communities

28.8.2001

VIII. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The purpose is to provide information regarding the major shareholders and others that control or may control the
company. It also provides information regarding transactions the company has entered into with persons affiliated with
the company and whether the terms of such transactions are fair to the company.

A. Major Shareholders

B. Related Party Transactions

C.

Interests of Experts and Counsel

IX. FINANCIAL INFORMATION

The purpose is to specify which financial statements must be included in the document, as well as the periods to be
covered, the age of the financial statements and other information of a financial nature. The accounting and auditing
principles that will be accepted for use in preparation and audit of the financial statements will be determined according
to international accounting and auditing standards.

A. Consolidated Statements and Other Financial Information

B. Significant Changes

X. THE OFFER AND ADMISSION TO TRADING DETAILS

The purpose is to provide information regarding the offer and the admission to trading of securities, the plan for
distribution of the securities and related matters.

A. Offer and Admission to Trading

B. Plan of Distribution

C. Markets

D. Selling Securities Holders

E. Dilution (for equity securities only)

F. Expenses of the Issue

XI. ADDITIONAL INFORMATION

The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the
prospectus.

A. Share Capital

B. Memorandum and Articles of Association

C. Material Contracts

D. Exchange Controls

E. Taxation

F. Dividends and Paying Agents

G. Statement by Experts

H. Documents on Display

I. Subsidiary Information

28.8.2001

EN

Official Journal of the European Communities

C 240 E/285

ANNEX II

REGISTRATION DOCUMENT

I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT, ADVISERS AND AUDITORS

The purpose is to identify the company representatives and other individuals involved in the company’s offering or
admission to trading; these are the persons responsible for drafting the prospectus as required by Article 5 of the
Directive and those responsible for auditing the financial statements.

II. KEY INFORMATION ABOUT THE ISSUER

The purpose is to summarise key information about the company’s financial condition, capitalisation and risk factors. If
the financial statements included in the document are restated to reflect material changes in the company’s group
structure or accounting policies, the selected financial data also must be restated.

A. Selected Financial Data

B. Capitalisation and Indebtedness

C. Risk Factors

III. INFORMATION ON THE COMPANY

The purpose is to provide information about the company’s business operations, the products it makes or the services it
provides, and the factors which affect the business. It is also intended to provide information regarding the adequacy and
suitability of the company’s properties, plants and equipment, as well as its plans for future increases or decreases in
such capacity.

A. History and Development of the Company

B. Business Overview

C. Organisational Structure

D. Property, Plant and Equipment

IV. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The purpose is to provide management’s explanation of factors that have affected the company’s financial condition and
results of operations for the historical periods covered by the financial statements, and management’s assessment of
factors and trends which are anticipated to have a material effect on the company’s financial condition and results of
operations in future periods.

A. Operating Results

B. Liquidity and Capital Resources

C. Research and Development, Patents and Licenses, etc.

D. Trend Information

V. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The purpose is to provide information concerning the company’s directors and managers that will allow investors to
assess such individuals’ experience, qualifications and levels of compensation, as well as their relationship with the
company.

A. Directors and Senior Management

B. Compensation

C. Board Practices

D. Employees

E. Share Ownership

C 240 E/286

EN

Official Journal of the European Communities

28.8.2001

VI. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The purpose is to provide information regarding the major shareholders and others that control or may control the
company. It also provides information regarding transactions the company has entered into with persons affiliated with
the company and whether the terms of such transactions are fair to the company.

A. Major Shareholders

B. Related Party Transactions

C.

Interests of Experts and Counsel

VII. FINANCIAL INFORMATION

The purpose is to specify which financial statements must be included in the document, as well as the periods to be
covered, the age of the financial statements and other information of a financial nature. The accounting and auditing
principles that will be accepted for use in preparation and audit of the financial statements will be determined according
to international accounting and auditing standards.

A. Consolidated Statements and Other Financial Information

B. Significant Changes

VIII. ADDITIONAL INFORMATION

The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the
prospectus.

A. Share Capital

B. Memorandum and Articles of Association

C. Material Contracts

D. Statement by Experts

E. Documents on Display

F. Subsidiary Information

28.8.2001

EN

Official Journal of the European Communities

C 240 E/287

ANNEX III

SECURITIES NOTE

I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT, ADVISERS AND AUDITORS

The purpose is to identify the company representatives and other individuals involved in the company’s offering or
admission to trading; these are the persons responsible for drafting the prospectus as required by Article 5 of the
Directive and those responsible for auditing the financial statements.

II. OFFER STATISTICS AND EXPECTED TIMETABLE

The purpose is to provide key information regarding the conduct of any offering and the identification of important
dates relating to that offering.

A. Offer Statistics

B. Method and Expected Timetable

III. KEY INFORMATION ABOUT THE ISSUER

The purpose is to summarise key information about the company’s financial condition, capitalisation and risk factors. If
the financial statements included in the document are restated to reflect material changes in the company’s group
structure or accounting policies, the selected financial data also must be restated.

A. Capitalisation and Indebtedness

B. Reasons for the offer and use of proceeds

C. Risk Factors

IV. INTERESTS OF EXPERTS

The purpose is to provide information regarding transactions the company has entered into with experts or counsellors
employed on a contingent basis.

V. THE OFFER AND ADMISSION TO TRADING DETAILS

The purpose is to provide information regarding the offer and the admission to trading of securities, the plan for
distribution of the securities and related matters.

A. Offer and Admission to Trading

B. Plan of Distribution

C. Markets

D. Selling Securities Holders

E. Dilution (for equity securities only)

F. Expenses of the Issue

VI. ADDITIONAL INFORMATION

The purpose is to provide information, most of which is of a statutory nature, that is not covered elsewhere in the
prospectus.

A. Exchange Controls

B. Taxation

C. Dividends and Paying Agents

D. Statement by Experts

E. Documents on Display

C 240 E/288

EN

Official Journal of the European Communities

28.8.2001

ANNEX IV

SUMMARY NOTE

The summary should give in a few pages the most important information included in the prospectus, at least coming
from the following items.

(cid:151) identity of directors, senior management, advisors and auditors

(cid:151) offer statistics and expected timetable

(cid:151) key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of

proceeds; risk factors.

(cid:151) information concerning the issuer

(cid:151) history and development of the issuer

(cid:151) business overview

(cid:151) operating and financial review and prospects

(cid:151) research and developments, patents and licences, etc.

(cid:151) trend information

(cid:151) directors, senior management and employees

(cid:151) major shareholders and related party transactions

(cid:151) financial information

(cid:151) consolidated statement and other financial information

(cid:151) significant changes

(cid:151) the offer and admission to trading details

(cid:151) offer and admission to trading details

(cid:151) plan of distribution

(cid:151) markets

(cid:151) selling shareholders

(cid:151) dilution (shares)

(cid:151) expenses of the issue

(cid:151) Additional information

(cid:151) share capital

(cid:151) memorandum and articles of incorporation

(cid:151) documents on display