Amended 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 and amending Directive 2001/34/EC
Date: 2002-08-09
Institutions: European Commission
Subjects: EU publication, dissemination of information, financial institution, financial market, harmonisation of standards, information, securities, takeover bid

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Amended 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 and
amending Directive 2001/34/EC (1)

(2003/C 20 E/14)

(Text with EEA relevance)

COM(2002) 460 final — 2001/0117(COD)

(Submitted by the Commission on 9 August 2002)

EXPLANATORY MEMORANDUM

1. GENERAL COMMENTS

In the context of an integrated European capital market, the Commission attaches great importance to
improving the framework for investing and raising capital on an EU wide basis. A single financial market
will promote the competitiveness of the European economy, lowering the cost of raising capital for all
types of companies. It will bring major benefits for consumers and investors.

This objective also satisfies the Lisbon European Council's request to introduce a single passport for issuers
in the European Union.

Facilitating the widest possible access to capital markets, including for SMEs, requires a complete overhaul
of the Community provisions on prospectuses, the first of which are 20 years old (Directive 80/390/EEC of
17 March 1980 coordinating the requirements for the drawing up, scrutiny and distribution of the listing
particulars to be published for the admission of securities to official stock exchange listing (2) and Directive
89/298/EEC of 17 April 1989 coordinating the requirements for the drawing up, scrutiny and distribution
of the prospectus to be published when transferable securities are offered to the public).

The need to upgrade these Directives has been listed as a top priority in the Financial Services Action Plan
and the Risk Capital Action Plan.

In May 2000, FESCO (the Forum of European Securities Commissions) published for public consultation
the paper European Public Offer. Following that consultation, and as a result of the process, on 17 January
2001 it published a new paper A European Passport for Issuers — A report to the EU Commission, calling
also for an urgent overhaul of the existing rules and suggesting possible new approaches.

A proposal for a Directive on prospectuses was adopted by the Commission on 30 May 2001. This
legislative initiative was given a first reading by Parliament, which on 14 March 2002 amended the text
adopted by the Commission. At
the Council Working Party on Financial Services
(Prospectus) met on several occasions to try and reach agreement on the proposal.

the same time,

To speed up the legislative process and meet the expectations expressed at the Barcelona Council on the
early adoption of a directive on prospectuses, the Commission wishes to put forward an amended proposal
for a Directive that takes account of many of Parliament's and the Council's wishes and concerns. The
presentation of the proposal has been changed as regards form to make the text more understandable and
readable.

The amended proposal also includes new, flexible arrangements for firms that were not in the proposal
adopted by the Commission on 30 May 2001 while remaining consistent with the principles of protection
and sound information for investors.

(1) OJ C 240 E, 28.8.2001, p. 272.
(2) Directive repealed and since replaced by the consolidated Directive 2001/34/EC.

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The indications that the current Community instruments on prospectuses are not suited to the operation
of capital markets have not changed. There are currently many different practices and differing inter-
pretations based on distinct traditions within the European Union regarding the content and the layout of
prospectuses. The methods used and the time required for checking the information given therein are also
different. Unless reform is undertaken, inconsistencies will continue and the European financial market will
remain fragmented. Cross-border capital raising will therefore remain the exception, rather than the rule —
the antithesis of the logic of the single currency.

The current complex and partial mutual recognition mechanism is unable to ensure the objective of
providing a single passport for issuers. There is a need for modernisation and more flexibility. To
achieve this objective, harmonisation of the information contained in each prospectus, including those
relating to markets specially intended for professional investors, is necessary in order to provide equivalent
protection for investors at Community level.

The European passport for issuers is also a unique opportunity to simplify regulatory compliance for
issuers without their having to produce duplicative sets of documentation or respond to numerous
additional national requirements.

The main changes compared with the Commission's original proposal are:

— introduction of enhanced disclosure standards in line with international standards for the public offer

of securities and admission to trading;

— introduction of special Community rules for securities designed to be traded by professionals;

— introduction of new prospectus formats for frequent issuers, and the duty on firms whose securities are

listed on a regulated market to update the information on issuers at least once a year;

— possibility to offer or admit securities to trading on the basis of a simple notification of the prospectus

approved by the home competent authority;

— concentration of the responsibilities in the home administrative competent authority;

— extensive use of

following the Stockholm European Council's broad
endorsement of the Lamfalussy Report in the resolution adopted by Heads of State or Government
on more effective securities markets regulation in the European Union.

the committee system,

The need for enhanced European disclosure standards for publicly offered securities

Adequate and equivalent disclosure standards should be in place in all European Member States when
securities are offered to the public or traded on regulated markets.

This implies that the existing disclosure standards need to be aligned in order to introduce the same
standards for the public offer of securities and admission to trading throughout the Union, in accordance
with the principle of maximum harmonisation.

Clear and common definitions have to be agreed to clarify the scope of the Directive and ensure necessary
harmonisation at Community level. As recognised by the Preliminary Report of
the Wise Men
(15 November 2000), the introduction of a definition of public offer is a prerequisite for attaining the
objective and encouraging firms to raise capital on a European basis under similar rules. It aims at avoiding
loopholes at Community level and disparity in the treatment accorded to retail investors due to the fact
that the same operation is considered as a private placement in some Members States (for which no
prospectus has to be published) but not in others. A common definition of a public offer of securities
automatically entails harmonising the concept of private placement in the European Union.

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It is accompanied by new rules on exemptions, which will also assist the introduction of uniform standards
in all Member States.

The amended proposal extends the scope of the existing measures to ensure that harmonised disclosure
requirements are available for equity and debt securities traded on regulated markets. Directive 2001/34/EC
applies only to securities that have been admitted to an official stock exchange, i.e. one which was known
at the time the Directive was adopted. It is worth noting that start-ups and high tech companies are mainly
traded on regulated markets outside the official listing segment. At present, it is up to each Member State
to decide what information relating to these markets is required, and this has implications for the cross-
border offering of these securities.

Need to introduce special Community rules for securities, especially those intended to be traded between professionals

The operation of the wholesale capital markets at European level needs to be made more efficient in order
is therefore planned to establish
to improve the integration of
Community rules for these markets and no longer automatically leave them outside the Community's
scope as in the current Directives. It is planned to introduce special rules for those securities specially
intended to be traded between professionals, while still applying the common arrangements in the
European passport.

the European financial market.

It

The basis of these arrangements is that there is no need for a prospectus in the case of an offer to qualified
investors in the form of a private placing, the rules on advertising do not apply to this type of offer, and
the content of the prospectus in the event of admission to trading is adapted to trading for this type of
investor: in particular there is no obligation to provide a summary. Such issues are also not caught by the
traditional rule of determining the competent authority by reference to the issuer's registered office.

European regulated markets are distinguished by their lack of barriers to entry, which is consistent with
the functioning of the single market. Since wholesale and retail investors have free access to these stock-
markets, an objective criterion based on a high nominal value for the securities to be traded has been
introduced, in order to create an effective distinction between markets for professionals and the general
public. Thus the more flexible arrangements envisaged cannot be put into effect to the detriment of retail
investors.

A simple, effective notification system that will make it possible to use a single prospectus for a public offer or
admission to trading in two or more Member States

The introduction of a true single passport for issuers requires the replacement of the existing mutual
inter-
recognition system by a simple notification system, similar to the one present in the financial
mediaries Directives for the cross border provision of services.

Under the new system, host Member States will be deprived of the possibility of asking for additional
information to be included in the prospectus.

The operation of such a system requires a great degree of trust among competent authorities in charge of
approving the prospectus and supervising the information disseminated by issuers. The proposal therefore
specifies that
the competent administrative authority in the home Member State is responsible for
providing supervision that will ensure equivalent treatment of all investors as regards access to information
and the on-going disclosure of material information by the issuer.

Independent administrative authorities, i.e. authorities in charge of ensuring general good objectives, are
necessary for ensuring market and investor protection. The delegation of resources, but not of responsi-
bilities, to private bodies may be entertained, subject to an organisation being set up that has no conflict of
interest and does not impede competition between stockmarkets.

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Other measures are foreseen in order to improve the functioning of the existing Community legislation.
The requirement to fully translate the content of the prospectus does not encourage multinational offerings
or admission to trading in more than one country. The proposal provides for a new language regime: host
Member States' competent authorities may now require, if they so wish, only a translation of the summary
of the prospectus, provided that the full prospectus is drafted in a language which is customary in the
sphere of finance (normally English). These arrangements should facilitate cross-border arrangements, while
guaranteeing adequate protection for retail investors: the latter will always receive the key information in
summary form in their own domestic language. The purpose of the summary is to provide, in particular to
retail investors, immediate, succinct information on the most relevant aspects relating to the issuer and the
proposed operation.

The need for best practice concerning the content of financial disclosure

The disclosure requirements provided for by Directive 2001/34/EC are no longer sufficient to meet the
needs of investors in modern global financial markets. Increasingly, investors want to make decisions on
the basis of a continuum of standardised company financial and non-financial information. The current
requirements need to be replaced by new European disclosure standards. Fostering best practice will
enhance market confidence and attract capital. The upgrade of EU disclosure standards shall be in
accordance with the International Disclosure Standards approved in 1998 by IOSCO (International Organi-
sation of Securities Commissions). This new approach is designed to provide key information on certain
topics such as risk factors, related-party transactions, corporate governance or management's discussion
and analysis that are not currently dealt with at EU level.

To hasten the completion of the single market in securities and improve the comparability of information,
the Commission has updated the Community accounting rules by adopting a new regulation: all
companies in the European Union whose securities are traded on a regulated market will have to
prepare their consolidated accounts in accordance with a single set of accounting rules, namely the
International Accounting Standards (IAS). This requirement should enter into effect in 2005 at the
latest. Thus it will be possible to trade the securities of the companies concerned on EU and international
financial markets on the basis of a single set of accounting standards.

Need to improve the ways of presenting the prospectus and ensure that information is easily available and regularly
updated

The proposal introduces several new formats for the Community prospectus, leaving each issuer to choose
which is most suitable. The issuer implements the policy described above, aiming at increasing the quality
It is the
and the quantity of the information to be put at the disposal of
investors and markets.
Commission's firm belief that increasing investor confidence will deliver significant benefits,
lowering
the cost of raising capital and ultimately improving job creation and the overall dynamism of the
European economy.

The prospectus may consist of one or more documents. In all cases, a summary of the documentation is
required. For frequent issuers such as credit institutions that issue in a continuous or repeated manner, the
system proposed is a basic document plus supplements. A similar system is planned for issuers that
programme their offers.

Another new format is also proposed, in which the prospectus consists of two parts: the registration
document, containing information about the issuer, and the securities note, containing information about
the securities (as explained in detail below). A summary of the two parts is provided in an ad hoc
summary note. This system introduces a fast-track procedure for new issues, under which only the
information related to the securities offered or admitted to trading has to be given, plus any updating
of the information in the registration document. The competent supervisory authority will be required to
approve only the securities note, and therefore the time for approval will be reduced. The introduction of
the new system therefore meets an increasing demand from multinational issuers (i.e. issuers frequently
raising capital on European and world markets).

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In addition, incorporation by reference will be allowed. This means that information to be disclosed in a
prospectus may be incorporated into that document by reference to another document, previously filed
and approved by the home competent authority. This will save time and money for companies frequently
raising capital on the market. The issuer will be allowed to use a document or prospectus that have already
been approved, and red tape will therefore be reduced.

To ensure the long-term protection of, and reliable information for, holders of securities, it is planned that
information about issuers whose securities are traded on regulated markets should be updated at least
annually. The updating may be based on all the current disclosure requirements in other Community
legislation, such as the Company Law Directives, the Directive on information to be published on a regular
basis by listed companies (see. Directive 2001/34/EC), and the Regulation on International Accounting
Standards. In order not to overload certain companies, the updating system is not compulsory for those
that have offered securities which are not being traded on a regulated market. For small and medium-sized
enterprises, the minimum requirement of an annual updating is limited to the filing of their financial
statements.

The rapid development of information and communication technology is changing the way financial
information is disseminated. To facilitate the circulation of prospectuses (and the various documents
composing a prospectus) the use of electronic means such as the Internet is encouraged. This will be
less costly for companies than current requirements but may also have a number of advantages. Investors
would have effective and free access to information on a real-time basis, as the issuer is now able to
publish the prospectus in electronic format.

Need for an extensive use of committee procedures (comitology) to keep up with developments in the financial sphere

Member States' securities markets are facing dramatic changes and increasing consolidation, driven by new
technologies, globalisation and the effect of the euro. Standard setting is also evolving rapidly. Competition
between securities markets calls for best practice taking new financial techniques and new products into
account. On the other hand, consumer protection and confidence has to be maintained at Community
level. It is important to ensure that any new measures adopted do not leave consumers wishing to invest in
innovative products without proper protection and remedies or vulnerable to differentiated treatment
depending on each Member State's interpretation.

To meet the challenge of regulating modern financial markets, new legislative techniques have to be
introduced. On 17 July 2000, the Council set up the Committee of Wise Men on the Regulation of
European Securities Markets. In its final report, the Committee called for each Directive to be a split
between framework principles and ‘non-essential’ technical implementing measures to be adopted by the
Commission under the Union's committee procedures.
In its resolution on more effective securities
markets regulation in the European Union, the Stockholm European Council welcomed the Commission's
intention to establish a Securities Committee. The Securities Committee, acting in its advisory capacity,
should be consulted on policy issues, in particular for the kind of measures the Commission might propose
at the level of framework principles. In its resolution, the European Council added that, subject to specific
legislative acts proposed by the Commission and adopted by the European Parliament and the Council, the
Securities Committee should function as a regulatory committee in accordance with the 1999 Decision on
comitology to assist the Commission when it takes decisions on implementing measures under Article 202
of the EC Treaty. This Directive follows the guidelines laid down by the Stockholm European Council and
the European Parliament.

The amended proposal identifies the second-tier implementing arrangements that will have to be decided
by the Commission by the committee procedure — for example, adaptation and clarification of the
definitions and exemptions set out in the Directive in order to ensure uniform application and compati-
bility with developments on financial markets. Adaptation of disclosure standards and deadlines, and
clarification of the rules on publication of the prospectus and the technical arrangements for adver-
tisements of a promotional and marketing nature will also be dealt with by the Commission under
committee procedure. The areas have been selected in order to ensure a prompt response to fast-changing
reality and to ensure the proper functioning of the internal market (in accordance with the home country
principle) and adequate protection for retail investors.

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2. DESCRIPTION OF ARTICLES

The main formal changes made to the proposal for a Directive adopted by the Commission on 30 May
2001 are as follows:

Paragraphs 1 and 2 of Article 1 of the original proposal have been merged for the sake of clarity and
simplicity.

Article 3 has been replaced by a description of the situations where there is an obligation to publish a
prospectus, the original paragraph 2 having been incorporated in the definition of a public offer of
securities in Article 2, while the original paragraph 3 has been moved to Article 4 — Exemptions
from the obligation to publish a prospectus.

Article 4 now deals with the conditions for exemption from the obligation to publish a prospectus.

The amended proposal includes a new Article 6, which deals with responsibility for the content of a
prospectus.

Article 7 corresponds to the former Article 6 on the information to be included in a prospectus.

The amended proposal includes a new Article 8, which deals with the omission of information from a
prospectus and in particular incorporates paragraph 3 of the former Article 6.

The amended proposal includes a new Article 9, which deals with the period of validity of the various
types of prospectus.

includes a new Article 10, which deals with the obligation to update all the
The amended proposal
information on issuers whose securities are admitted to trading on a regulated market and replaces
Article 9 on the annual update of the registration document.

The arrangement of the articles in Chapter III has not been changed. The former Chapter IV, however, has
been split into two, so as to deal separately with the practical arrangements for the ‘European passport’ for
issuers, while a new Chapter V concerns the language regime and the arrangements for prospectuses
drawn up under the rules in force in third countries.

Lastly, the articles containing the transitional and final provisions have been rearranged.

The main substantive changes are as follows:

In Article 1, issues of securities by non-profit-making organisations and certificates of deposit issued by
credit institutions have been withdrawn from the scope of the Directive. Sovereign issuers may fall within
the scope of the Directive and thus qualify for the European passport.

In Article 2, the definition of securities has been aligned on that in the Investment Services Directive and
clarified with regard to the rules for money market instruments with a fixed maturity. The definition of
qualified investors has been expanded to include more legal persons and, subject to certain conditions,
natural persons. A definition of small and medium-sized enterprises (SMEs) has been included, as has a
definition of credit institutions. Definitions of ‘offering programme’, ‘securities issued in a continuous or
repeated manner’ and the ‘approval’ of a prospectus have been added. The definition of ‘offer of securities
to the public’ has been supplemented and clarified. It is at once a positive and a negative definition, so that
private placings may be accurately identified. Small-scale issues (less than EUR 2 500 000) are not treated
as public offers. A new system, based on the principle of a high nominal value, has been introduced in
order to allow an objective distinction to be made between wholesale and retail regulated markets. The
definition of home Member State has been adapted in order to allow certain issuers of securities with a
high nominal value a free choice as to their competent authority.

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In Article 4, which concerns exemptions from the obligation to publish a prospectus, certain clarifications
have been added, e.g. the payment of dividends in the form of shares, while the rules on offers of
securities, including in the form of stock options, to employees or directors have been relaxed in order
to exempt such offers from the said obligation.

In Article 5, the obligation to draw up a prospectus in the form of a registration document plus a
securities note and a summary note has been dropped in favour of leaving the issuer with a choice.
The article also contains provisions aimed at regulating the content of the summary. A new prospectus
format for certain types of issue, namely offering programmes and issues of mortgage bonds, has also been
introduced.

The new Article 6 establishes the principle of the responsibility of the issuer for the content of the
prospectus, and the obligation on Member States to ensure that, where appropriate, the issuer is liable
towards third parties. In the case of the summary, such liability is limited.

Article 7 describes explicitly the type of adjustments needed when implementing measures for the different
models of prospectus are adopted and establishes the reference standards for the information to be
supplied.

Article 8 gives competent authorities a new right, which is not to require certain information normally
requested, subject to certain conditions. It is also possible to adapt certain required items, where they are
not suited to the issuer's situation.

Article 9, which is new, grants the right to use the same prospectus for a maximum period of twelve
months, subject to updating where appropriate.

Article 10, which is also new, concerns the obligation to update all the information on issuers admitted to
trading on a regulated market; it has been reworked and made more flexible. There is no obligation to
monitor updated information. The format is left open, and the reference to other documents required by
other Community instruments is a wide-ranging one.

Article 11, which concerns the incorporation of information by reference, has been supplemented in order
to clarify the types of document that may be used when drawing up a prospectus. The summary may not
refer to other documents.

Article 12 makes clear that the registration document does not have to be approved, if it is not used for
drawing up a prospectus.

The time limits set for the approval of a prospectus have been shortened in Article 13, and failure by a
competent authority to comment is now regarded as approval. Failure by a competent authority to act will
allow the issuer to change competent authority. A competent authority may also transfer approval of a
prospectus to an authority in another Member State, if that authority agrees. Concerning the liability of
competent authorities, the law applicable has been clarified, as has the power of a Member State to
exonerate from any liability a competent authority which it has appointed.

In Article 14, the deadline by which a prospectus must be published has been made more flexible to take
account of the constraints on the issuer and the placing of the prospectus by the competent authority on
its website.

issues and admission to trading.
There is no longer any obligation to presubmit advertisements of
However, a competent authority must have the power to monitor such advertising. Lastly, the principle
of equal treatment for investors regarding oral information at investors' meetings is confined to important
and sensitive information.

The scope of Article 16 has been extended to include substantive errors and other inaccurate information.

As regards the automatic mutual recognition procedure in Article 17, the three-month time limit has been
abolished, as has any opportunity for the host competent authority to intervene in the procedure.

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A time limit of three days between applying for and obtaining a certificate of approval has been attached
to the notification procedure in Article 18.

In Article 19, the language regime has been spelt out to cover all scenarios.

The procedure for allowing the conditional use of prospectuses drawn up under third-country rules has
been relaxed and at the same time expanded to include action by the Commission on the harmonisation of
practices.

Article 21, which concerns the powers of the competent authorities, has been supplemented to make it
possible for several authorities in one Member State to be involved and to allow tasks to be delegated to
other bodies. The power to conduct on-the-spot inspections has been withdrawn.

Article 22 on professional secrecy has been supplemented with detailed rules on inter-authority coop-
eration.

Article 23 on precautionary measures has been amended by withdrawing from the Commission the power
to ask a Member State to amend or abolish such measures.

Article 24, which deals with the operation of the European Securities Committee, has been supplemented
by a provision terminating the Committee's regulatory power after a period of four years from the entry
into force of the Directive.

Article 25 on sanctions has been aligned with the relevant provisions in the Market Abuse Directive.

The time limit on transposition has been extended in Article 29, and the references to the repealed
Community provisions have been updated following the entry into force of Directive 2001/34/EC on
the admission of securities to official stock exchange listing and on information to be published on those
securities.

Article 30, which deals with transitional provisions, has been revised, so that it no longer refers to the first
time the annual update obligation is performed; on the contrary, it now contains a provision governing the
initial declaration by third-country issuers of their home country and competent authority.

Article 1 — Subject matter and scope

The purpose of the Directive is 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.

The Directive is applicable to the securities which are offered to the public or are admitted to trading on a
regulated market as defined in the Investment Services Directive (93/22/EEC — ISD). This represents a
major change from the previous system based on the consolidated Directive 2001/34/EC on the admission
of securities to official stock exchange listing and on information to be published on those securities and
Directive 89/298/EEC coordinating the requirements for the drawing-up, scrutiny and distribution of the
prospectus to be published when transferable securities are offered to the public.

The wording ‘admission to trading’ has been selected in order to avoid possible loopholes in the implemen-
‘Admission to the official list’ is not defined in Community legislation. In many
tation of the Directive.
cases it has been interpreted as admission to the official segment of the national stock exchange (in certain
cases even if trading does not take place). This implies that disclosure requirements for other types of
‘regulated markets’ (definition introduced by the ISD) are not fully harmonised at EU level and in several
cases mutual recognition is not allowed. In other Member States, implementation of the ISD has resulted in
the replacement of the term ‘official listing’ by ‘first-tier market’, ‘second-tier market’, etc. Nevertheless, the
ISD definition requires that rules should be adopted to ensure that certain requirements are met before
securities can be traded on a regulated market
imposed by the
consolidated Directive 2001/34/EEC or left to the national
legislator to decide). The aim of the new
Directive is to ensure that initial disclosure requirements are as set forth in the Directive.

(such requirements being either

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As called for by European securities regulators, the two Directives are now merged and the disclosure
standards required are the same. In addition, certain types of securities which were left outside the old
system because they were traded on regulated markets without being admitted to the official list are now
included and can benefit from the single passport.

At the same time the system increases the information and the guarantee provided to investors in the
European Union.

Traditional exemptions have been kept for securities of specific types (such as UCITS units, covered by
different harmonisation provisions) or issued by Member States or international bodies. However,
sovereign issuers may draw up prospectuses in accordance with the Directive in order to qualify for
the provisions concerning the European passport for issuers.

Article 2 — Definitions

The definitions listed in Article 2 are partly drafted by reference to existing Directives but also contain new
elements. Thus the definition of ‘securities’ is little different from that in Directive 89/298/EEC (it has
simply been updated and aligned with the operation of the secondary market in securities as provided for
in Directive 93/22/EC on investment services); on the other hand, the introduction of the concept of a
‘public offer’ is a major innovation. When Directive 89/298/EEC was adopted it proved impossible to reach
an agreement on a common definition (see recital 7 of the said Directive). However, as recognised in the
Wise Men's report,
it is important to ensure a common approach to this subject in order to avoid
disparities in investor protection in an era when, through electronic communication networks, investors
can be reached throughout Europe (and elsewhere). Different
the ‘public offer’
in the Member States may have the effect that in certain cases securities can be sold
requirement
without any disclosure requirement (and this behaviour can affect the entire European capital market).

interpretations of

To complement this definition, a new harmonised scheme for exemptions is envisaged: this includes offers
targeted only at certain ‘qualified’ investors (i.e. who have specific professional qualifications or charac-
teristics) or at investors who are able to acquire securities for an overall amount of at least EUR 50 000 or
securities with a nominal value of at least EUR 50 000. Offers that are addressed to a limited number of
investors or are less than EUR 2 500 000 are exonerated from the prospectus.

The new system is based on the approval of the prospectus by the competent authority in the home
Member State; the concepts of ‘home Member State’ and ‘host Member State’ have therefore been defined.
A definition is also provided for the case where the issuer is incorporated outside the EU and its securities
are offered or admitted to trading in the EU.

Clarifications and adaptations of definitions, if necessary, can be adopted by using the procedure foreseen
in Article 24 in accordance to the suggestion to delegate to the Commission detailed technical regulations.
This means that the Commission, assisted by the Securities Committee, will be able for example to
determine whether new securities fall within the Directive's scope, thereby ensuring that the Directive
reflects developments on the financial markets.

Article 3 — Conditions for the offer of securities to the public and their admission to trading

Article 3 specifies that no securities may be offered to the public or admitted to trading on a regulated
market in the European Union, unless the initial information required (the prospectus) has been made
available to the market and investors.

Article 4 — Exemptions from the obligation to publish a prospectus

As already explained with regard to the definition of ‘public offer’, a harmonised approach is required in
order to avoid loopholes and ensure uniform treatment and protection of investors throughout the EU. It
is therefore important to introduce common exemption arrangements.

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This objective has been achieved by revising the existing provisions and eliminating the flexibility that
allows Member States to decide whether or not the exemptions have to be incorporated into national law.

One series of exemptions relates to the fact that certain types of securities are offered in exchange for
already existing securities or result from specific operations for which equivalent information is or has
already been made available to the public or the shareholders.

A second series concerns admission to trading in the case of specific transactions that do not require
special information in order to ensure investor protection and hence do not entail the burden of drawing
up a prospectus.

Clarifications and adaptations of definitions and/or exemptions, if necessary, may be adopted under the
procedure provided for in Article 24, in accordance with the proposal to delegate to the Commission the
adoption of the detailed technical provisions. This should avoid differentiated implementation by the
Member States undermining the Commission's objective of ensuring adequate investor protection.

Article 5 — Prospectus

Article 5 broadly reflects principles, on the function and the format of the prospectus, already present in
Directives 2001/34/EC and 89/298/EEC. These principles, the aim of which is to ensure that all material
information is disclosed to investors, are also consistent with the international principles adopted by
IOSCO (see also the IOSCO report ‘Objectives and Principles for Securities Regulation’). In line with
best international practice, the Article also requires that the information should be presented in easily
understandable and analysable form.

Paragraph 1 clearly states that all necessary information should be disclosed in the prospectus, while
paragraph 2 describes the operation of the summary attached to the prospectus.

Paragraph 3 explains that the prospectus may be drawn up as a single document or as separate documents
consisting of a registration document, a securities note and a summary note. The registration document
contains general information on the issuer as well as its financial statements. The securities note contains
details on the securities offered to the public or admitted to trading and the modalities of this operation.
The summary is a résumé of the main items included in the prospectus (or the registration document and
the securities note if this is the case).

A different prospectus format is proposed for facilitating the task and reducing the amount of work of
frequent issuers, in particular those which programme their offers or which issue mortgage bonds in a
continuous or frequent manner.

Article 6 — Responsibility for the prospectus

As in the present system, responsibility for ensuring that all material
information is disclosed in the
prospectus lies with the administrative, management or supervisory bodies of the issuer, the offeror and
the guarantor as the case may be. Member States are also required to ensure that this obligation is backed
by civil
liability measures, but with different arrangements for responsibility for the summary of the
prospectus.

Article 7 — Minimum information to be included in the prospectus

The specific items of information to be included in the prospectus, whether in the form of a single
document or a set of documents, are detailed implementing measures and should be adopted in accordance
with the procedure proposed in the report by the Committee of Wise Men (i.e. at level 2) with reference
being made to the Annexes to the Directive. The Community's detailed disclosure standards should be in
line with those adopted by IOSCO for multinational offerings and listings and with the indicative Annexes
to the Directive. Annex I lists the items of information to be included in the prospectus when drawn up as
a single document. Annexes II, III and IV refer to the registration document, the securities note and the
summary note respectively.

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The decision to base the Community system on the IOSCO Disclosure Standards also means that the
European prospectus will be in line with internationally accepted best practice and should also be
acceptable for public offers or admission to trading outside Europe,
in IOSCO member jurisdictions.
This will provide benefits to EU issuers, which will not be obliged to duplicate disclosure documents.

IOSCO's basic requirements will nevertheless have to be adapted to the various categories of security
offered to the public or admitted to trading, especially those in-between equities and other securities, but
also securities specially intended for professionals (as determined by the nominal value). The content of the
prospectus will also have to be adapted in the case of programmed offers and continuous or repeat issues.
Lastly, there is a requirement to take the size of firms and the nature of their activities into account. Such
adaptation will have to be made by the Commission in accordance with the committee procedures.

Since the above measures are necessary for the single passport system to become effective, a deadline for
the approval (180 days after the entry into force of the Directive) has been set. This means that the
Commission, assisted by the Securities Committee, will have to issue detailed technical rules about the
specific information which must be included in the actual prospectuses in the form of models for the
different types of securities and issuers.

Article 8 — Omission of information from the prospectus

This Article clarifies the treatment of items of information that cannot be included in the prospectus
because they are not available at the time when the prospectus is drafted — i.e. the final offering price and
the number of shares that will be allotted to the public. In this case the prospectus should contain the
objective criteria according to which the final decision will be taken and the requirement that these items
will be published in a supplement to the prospectus to be made available to the public according to the
same arrangements as the original prospectus.

The Article also lays down the treatment for derogations that a competent authority may grant an issuer in
respect of certain sensitive information and for non-essential information required by the detailed plans
adopted under the committee procedure.

In this case too, detailed rules will be adopted under a level 2 procedure.

Article 9 — Period of validity of a prospectus

Article 9 specifies the period of validity of a prospectus and of the various documents that make up a
prospectus. The period of validity is limited to twelve months except for prospectuses for the issue and
admission to trading of mortgage bonds, which remain valid until the maturity of the securities in
question.

Article 10 — Investor protection

To ensure an appropriate level of information for, and protection of, investors once securities are traded
on a regulated market, an issuer will have to update at least once a year the information that a prospectus
or registration document must contain about the company. The updated information must be sent to and
filed with the issuer's competent authority, although there is no Community obligation to approve such
information. To lighten the administrative burden and reduce costs, the Directive allows the issuer to use
documents required by other Community directives on company law and securities.

Lastly, this updating obligation does not apply to securities more particularly intended for professionals (as
determined by the par value) and arrangements limited to the production of financial statements for small
and medium-sized enterprises.

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Article 11 — Incorporation of information by reference

The Directive introduces another measure in order to make life easier for the issuer and to reduce costs:
the incorporation of information by reference.

Article 11 states that the prospectus may incorporate the relevant information by reference to one or more
documents. Such information should result from the application of Community requirements on company
law and on securities admitted to trading on a regulated market. Filed in advance, it must have been
approved by the competent authority and must be made available to the public under the same
arrangements as for the prospectus.

The detailed rules concerning the documents that can be incorporated by reference and the relevant
arrangements will be adopted under a level 2 committee procedure.

Since these measures are necessary for the single passport system to become effective, a deadline for the
approval (180 days after the entry into force of the Directive) has been set.

Article 12 — Use of registration document, securities note and summary note

This Article states that an issuer that has already filed a registration document, in the case of a new issue
(or admission to trading), is required to produce a summary and a securities note only if it wishes to draw
up a prospectus. This means that a full new prospectus is not required.

If the registration document has been approved by the competent authority, any updating of the securities
note and the summary note will have to be approved separately.

If the registration document has simply been filed without being approved, all the documentation will have
to be checked.

Article 13 — Approval of the prospectus

The prospectus must be approved by the home competent authority before being published. The previous
system already required prior approval for the listing particulars and, in any case, mutual recognition was
available only for prospectuses that had been pre-vetted. To ensure the smooth operation of the system,
however, the Directive sets clear deadlines for approval which differentiate between issuers already known
to the market and subject to supervision and issuers raising capital for the first time.

A maximum deadline of 15 days (which can be interrupted if new information is needed or the docu-
it is extended to 30 days in the case of a first-time offer.
mentation is incomplete) is set. However,

Failure by a competent authority to act will allow the issuer to change competent authority. A competent
authority may also transfer approval of a prospectus to an authority in another Member State, if that
authority agrees.

The legal rules governing the liability of the competent authority when approving a prospectus will
continue to be determined by the national law of each Member State.

The level 2 committee procedure may be implemented in order to reduce the maximum time limits for
approval, if this should prove necessary in the light of developments on the financial markets.

Article 14 — Publication of the prospectus

Article 14 updates the rules already existing in the listing particulars and the public offer Directives. It
allows the use of modern communication technology in addition to conventional, print-based methods of
publication. In particular, an issuer may choose to put its prospectus on its web site. The Commission will
have to adopt detailed rules on this subject to ensure the common implementation of the Directive. This
means that it could issue rules concerning the arrangements for delivering, free of charge, a copy of the
prospectus to prospective investors asking for it.

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To set up a central information point and enable investors, especially in third countries, to obtain the
relevant information, the Directive requires that the approved prospectus (whether in the form of a single
document or a set of separate documents) should be filed with the competent authority and made available
to the public on the latter's web site or via a link to the issuer's own site.

Article 15 — Advertising

The Directive updates the Community rules on advertising in the context of public offerings of securities
and admissions to trading on a regulated market.

To ensure proper investor protection and consistency with the information which is or will be included in
the prospectus (which is deemed to be the document on the basis of which investment decisions have to
be taken), advertising must state that a prospectus is or will be available and how it may be obtained.

The Directive also establishes the principle that advertising should be clearly recognisable as such and the
information contained in an advertisement must be fair, accurate and in any case consistent with that
contained in the prospectus.

Detailed rules to ensure common implementation and investor protection should be adopted by the
Commission in this respect under a level 2 committee procedure. This means that the Commission
may establish guidelines about how to advertise the performance of
the securities offered to the
investor to avoid giving retail investors misleading information about future gains.

Since these measures are necessary for the single passport system to become effective, a deadline for their
adoption (180 days after the entry into force of the Directive) has been set.

The Directive states that information addressed by the issuer or the offeror to qualified or special categories
of investors should also be disclosed to the public.

Article 16 — Supplement to the prospectus

Article 16 borrows a rule from the two existing Directives on prospectuses, namely that a supplement is
required where significant new factors capable of affecting assessment of the securities arise after the
prospectus has been published and before the offer is closed or trading has started. For consistency's sake,
the supplement is submitted to the same rules applicable to the prospectus in terms of prior approval and
availability to the public.

Article 17 — Community scope of an approval of a prospectus

Article 17 replaces the existing mutual recognition system. The aim of the provision is to ensure that in
the case of multinational offerings or multiple trading (i.e. offer or admission to trading in Member States
other than the home Member State) the prospectus approved by the home competent authority is accepted
in all Member States concerned without the need to provide additional
information or obtain fresh
approval.

Article 18 — Notification to the host competent authority

To ensure proper investor protection, and in line with the requirements applicable in the Directives
providing for a European passport (the Investment Services Directive and the Second Banking Directive),
the competent authority in the home Member State must send the competent authorities of the other
Member States a certificate of approval stating that the provisions of this Directive have been complied
with, and any translation of the summary made by the issuer.

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Article 19 — Language regime

Article 19 lays down new language rules for the operation of the European passport. The system is already
part of the acquis communautaire in the field of securities, in particular Directive 2001/34/EC, but has been
updated. The competent authority in the host Member State may accept a prospectus in any language
which it considers appropriate, though not necessarily a language of that Member State. It may not require
a translation of the full prospectus into its national language(s), but it may, if it wishes, require a trans-
lation of the summary only, and ask for the prospectus to be written in a language generally accepted in
the sphere of international finance.

Article 20 — Issuers incorporated in third countries

In the case of issuers incorporated in a third country, the prospectus shall be approved by the EU ‘home
country’ authority, designated in accordance with the Directive. This authority may recognise the
prospectus drawn up in accordance with the rules applicable to the issuer in the third country,
provided that the information requirements are generally equivalent to those required by the Directive,
most notably compliance with the international standards established by the international securities
commissions. Once approved by the home competent authority, the prospectus may be used in other
Member States.

To ensure a consistent approach at European level, the Commission should determine under a level 2
committee procedure which third countries have rules that can be regarded as generally equivalent to those
in the Directive.

Article 21 — Rights of the competent authorities

The introduction of a notification system requires mutual trust among competent authorities and simi-
larities in performing regulatory and supervisory functions. At present the Directives simply require
Member States to notify who the competent authorities are.

The designation of an administrative competent authority in each Member State meets the need for
efficiency and clarity, and is designed to enhance cooperation between the different national competent
authorities. A Member State may, however, designate several competent administrative authorities, but
only one authority per Member State will have the necessary powers of approval and notification in the
case of a public offer or admission to trading on a regulated market in other Member States.

The administrative nature of these single competent authorities is necessary to ensure their independence
from the markets and to avoid conflicts of interest. Nevertheless, an administrative authority may delegate
tasks to other bodies, subject to strict conditions aimed at preventing any conflict of interest and any
restrictive practice.

Article 21 lists the minimum rights that each should have in order to fulfil its duties. The provision will
also ensure greater consistency and clarity in the application of the Directive.

Article 22 — Professional secrecy

As is customary in all Community financial legislation, rules are required in order to ensure the confi-
dentiality of information collected by the competent authorities in performing their tasks.

However, such confidentiality must not constitute a barrier to mutual assistance and cooperation between
the competent authorities of the Member States and, subject to certain guarantees, between these and the
competent authorities of third countries.

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Article 22 sets forth these rules in accordance with the principles already embodied in existing legislation
(in particular the Insider Dealing and the Investment Services Directives).

Article 23 — Precautionary measures

Article 23 applies a principle enshrined in the Treaty and common to all Community financial legislation:
where the competent authority in the host Member State ascertains irregularities committed by the issuer
or by the financial institutions in charge of the public offer procedures or violations of the obligations
it must inform the
deriving for the issuer from the fact that the securities are admitted to trading,
competent authority in the home Member State. In an emergency, however, it is authorised to take any
necessary steps to protect investors. They must also be notified to the Commission.

Article 24 — Committee

Article 24 refers to the Securities Committee (‘the Committee’). The Committee's purpose is to assist the
Commission in the exercise of its level 2 powers (committee procedure).

Article 25 — Sanctions

Article 25 provides for an adequate sanctioning mechanism to be put in place in each Member State. It
states that such sanctions, including administrative ones, must be effective, proportionate and dissuasive.

Article 26 — Right of action

To ensure proper protection for all affected parties, Article 26 lays down that all decisions taken under
laws, regulations and administrative provisions adopted in accordance with this Directive are subject to
judicial remedy.

Article 27 — Amendments

Article 27 sets out which articles and paragraphs of Directive 2001/34/EC are deleted.

Article 28 — Repeal

The provisions of Directive 89/298/EEC are repealed on the date of entry into force of this Directive, as
provided for in Article 29 above.

Article 29 — Transposition

Article 29 sets the time limit for transposition of the Directive.

Article 30 — Transitional provisions

Article 30 specifies the cut-off date by which third country issuers whose securities have already been
admitted to trading on a regulated market must choose their home country in the Community.

Article 31 — Entry into force

Article 31 specifies when the Directive will enter into force.

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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 (1),

Having regard to the opinion of the Economic and Social
Committee (2),

Having regard to the opinion of the European Central Bank (3),

Acting in accordance with the procedure laid down in Article
251 of the Treaty (4),

Whereas:

the

listing particulars

(1) Council Directive 80/390/EEC of 17 March 1980 coor-
dinating the requirements for the drawing up, scrutiny
to be
and distribution for
published for the admission of securities to official stock
exchange listing (5) and Council Directive 89/298/EEC of
17 April 1989 coordinating the requirements for the
drawing up, scrutiny and distribution of the prospectus
to be published when transferable securities are offered to
the public (6) have been adopted several years ago intro-
ducing
recognition
mechanism which is unable to ensure the objective of
the
be
passport. Those Directives
upgraded, updated and grouped together into a single
text.

and complex mutual

a partial

should

single

(2) Meanwhile Directive 80/390/EEC was

integrated into
Directive 2001/34/EC of the European Parliament and
of the Council of 28 May 2001 on the admission of
listing and on
securities
securities (7)
information to be published on those
listed
which codifies several Directives in the field of
securities.

stock exchange

to official

(3) For reasons of coherence in the subject matter, however,
it is appropriate to regroup the provisions of Directive
2001/34/EC which stem from Directive 80/390/EEC
together with Directive 89/298/EEC and to amend
Directive 2001/34/EC accordingly.

(1) OJ C 240 E, 28.8.2001, p. 272.
(2) OJ C 80, 3.4.2002, p. 52.
(3) OJ C 344, 6.12.2001, p. 8.
(4) Opinion of the European Parliament of . . .
(5) 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).

(4) This Directive constitutes an instrument essential to the
the internal market as set out
in a
achievement of
timetable
form in the Communication from the
Commission — Risk Capital Action Plan (8) and the
Communication from the Commission — Implementing
the framework for financial market: action Plan (9) facili-
tating the widest possible access to investment capital on
an Community-wide basis,
small and
medium size enterprises (SMEs) and start ups, by means
of a ‘single passport’ for issuers.

including for

(5) On 17 July 2000,

(Ecofin)

set up the
the Council
Committee of Wise Men on the regulation of European
securities markets.
In its initial report of 9 November
2000 the Committee stresses the lack of an agreed defi-
nition of public offer of securities, with the results that
the same operation is analysed as a private placement in
some Member States and not in others; the current system
discourages firms from raising capital on an European
wide basis and therefore from having real access to a
large, liquid and integrated financial market.

level

approach, namely

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

(7) The European Council at its meeting in Stockholm on
the
23-24 March 2001 endorsed the final report of
Committee of Wise Men and the proposed four level
approach
for
Community securities legislation more efficient and trans-
parent.

to make

regulatory

process

the

(8) The resolution of the European Parliament of 5 February
2002 on the implementation of financial services legis-
lation also endorsed the Committee of Wise Men's report,
on the basis of
the solemn declaration made before
Parliament before the same day by the Commission and
the letter of 2 October 2001 addressed by the Internal
chair of Parliament's
to the
Market Commissioner
Committee on Economic and Monetary Affairs with
regard to the safeguards for the European Parliament's
role in this process.

(9) 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.

(6) OJ L 124, 5.5.1989, p. 8.
(7) OJ L 184, 6.7.2001, p. 1.

(8) SEC(1998) 552 final.
(9) COM(1999) 232 final.

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(10) Implementing measures

this
Directive should aim to ensure investor protection and
market
in accordance with high regulatory
standards adopted in the relevant international fora.

integrity,

pursuant

adopted

to

(11) 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 (1) 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
instruments used in national
legislation for other
It covers only negotiable
purposes such as taxation.
instruments that are or could possibly be traded on
regulated markets. In particular, equity securities issued
by
property
companies in order to own real estate or by companies
for the sole purpose to provide goods and services to
holders of their securities are not covered by this defi-
nition if they are not fungible.

companies

joint-stock

securities

housing

or

(12) 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.

(13) 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.

(14) The provision of full, appropriate information concerning
securities and issuers of such securities promotes, together
with rules on the conduct of business, 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 required is the publication of the prospectus.

like

any other

form of
in securities,
(15) 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.

(16) 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 easily analysable
and comprehensible form. The harmonisation of
the
information contained in the prospectus should provide
equivalent protection for investors at Community level.

(17) Best practices have been adopted at international level in
order to allow multinational offerings of equities to be made
using a single set of disclosure standards by the International
Organisation Securities Commissions (IOSCO); the IOSCO
disclosure standards (2) 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. The Directive also calls for
tailored disclosure standards to be adopted for others types
of securities and issuers.

(18) Fast track procedures for issuers admitted to trading on a
regulated market and frequently raising capital on the
markets require the introduction at Community level of
a new format of prospectuses for offering programmes or
mortgage bonds and a new registration document system.
Issuers may choose not to use those formats and therefore
to draft the prospectus as a single document.

(19) Omission of sensitive information to be included in a
prospectus
should be allowed through a derogation
granted by the competent authority in order to avoid
detrimental situations for an issuer. Non appropriate or
applicable information items required in a prospectus
should also be adapted to the particular situation of an
issuer or type of securities.

(20) A clear time limit should be set for the validity of a
prospectus to avoid outdated information. This validity
should be extended to the maturity of a mortgage bond
because of the lower risk profile of such securities.

(1) 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).

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

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(21) Investors should be protected by ensuring publication of
reliable information. The companies admitted to trading
on a regulated market are subject to an ongoing disclosure
obligation but not to publish updated information regularly.
issuers should at least update the
To supplement this,
information related to them and contained in a prospectus.
This should be a way to ensure the publication of consistent
and easily understandable information on a regular basis. To
avoid excessive burden for certain issuers, SMEs and issuers
of securities with high minimum denomination should not
be required to meet this obligation.
Issuers should be
allowed to use all the different reporting requirements laid
down in other Community legislative texts to fulfil the
update obligation.

properly evaluated by investors and therefore requires the
approval
of
information.

dissemination

supplement

and

of

a

(27) The obligation for
into all

an issuer
the

to translate
relevant national

the
full
prospectus
languages
discourages cross border offerings or multiple trading.
To facilitate cross borders offers, where the prospectus
is drawn up in a language that
is customary in the
sphere of international finance, the host country should
only be entitled to require a summary in its domestic
language.

(22) 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.

(28) 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

(23) 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
the safeguards
an adequate degree of equivalence of
required in each Member States to ensure the provision
of
information which is sufficient and as objective as
possible for actual or potential securities holders.

(24) To facilitate the circulation of

the prospectus,

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

the
such as

use of
internet

for

and

adopted

overlapping

(29) A variety of competent authorities in Member States,
having different responsibilities, may create unnecessary
responsibilities without
of
costs
providing any additional benefit. In each Member State
a competent authority should be designated to approve
prospectuses and to assume responsibility for supervising
compliance with the provisions
the
implementation of this Directive. Under strict conditions,
a Member State should be allowed to designate other
administrative authorities but only one will assume the
duties for international collaboration. Such an authority
or authorities should be established as an administrative
authority and in such a form that its independence from
economic actors is guaranteed and conflicts of interests
are avoided. The designation of a competent authority for
prospectus approval does not exclude forms of colla-
boration and even delegation of
tasks between that
authority and other entities, with a view to guaranteeing
efficient scrutiny and approval of prospectuses in the
interest of
investors, markets participants, and
markets alike.

issuers,

(25) It

is also necessary,

to avoid loopholes 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.

financial markets,

(26) Any new fact liable to influence the assessment of the
investment
the
prospectus but before the closing of the offer or the
starting of the trading on a regulated market should be

the publication of

intervened after

(30) 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
Directive 2001/34/EC of 28 May 2001 has to be ensured
and action against breaches taken by competent auth-
orities.

(31) For the purposes of carrying out their duties, cooperation

between competent authorities is required.

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(32) Technical guidance and implementing measures to the
rules laid down in this Directive may from time to time
be necessary to take into account of new developments
on financial markets. The Commission should accordingly
be empowered to adopt implementing measures, provided
that these do not modify the essential elements of this
Directive and that the Commission acts according to the
principles set out in this Directive, after consulting the
by
European
the
Commission Decision
measures necessary for
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
conferred on the
exercise of
Commission (2), they should be adopted by use of the
regulatory procedures provided for in Article 5 of that
Decision.

established
Since
implementation of

Committee
2001/528/EC (1).
the

implementing powers

Securities

(33) In exercising its implementing powers in accordance with
the

the Commission should respect

this Directive,
following principles:

— the need to ensure confidence in financial markets
among households and SMEs by promoting high
standards of transparency in financial markets;

— the need to provide investors with a wide range of
competing investments and a level of disclosure and
protection tailored to their circumstances;

— the need to ensure that independent regulatory auth-
orities enforce the rules consistently, especially as
regards the fight against white-collar crime;

— the need for a high level of transparency and consul-
tation with all market participants and with the
European Parliament and Council;

— the need to encourage innovation in financial markets

if they are to be dynamic and efficient;

— the need to ensure systemic stability of the financial
system by a close and reactive monitoring of financial
innovation;

— the need to achieve a level playing field for all market
participants by establishing Community-wide regu-
lations every time it is appropriate;

— the need to respect differences in national markets
impinge on the

these do not unduly

where
coherence of the single market;

— the need to ensure coherence with other Community
legislation in this area, as imbalances in information
transparency may jeopardise the
and a lack of
operation of
all harm
and above
consumers and small investors.

the markets

(34) The European Parliament will be given a period of three
months from the first transmission of draft implementing
measures to allow it to examine them and to give its
in urgent and duly justified cases,
opinion. However,
this period may be shortened. If, within that period, a
resolution is passed by the European Parliament,
the
Commission will re-examine the draft measures.

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

administrative

sanctions,

(36) 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.

(37) 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 itself

to what

(38) This Directive

respects

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

the Fundamental Rights of

fundamental

rights

— the importance of reducing the cost of, and increasing

access to, capital;

HAVE ADOPTED THIS DIRECTIVE:

— the need to balance the costs and benefits to market
participants on a long-term basis (including small and
medium-sized businesses and small investors) of any
implementing measures;

— the need to foster the international competitiveness of
the Community's financial markets without prejudice
international coop-
to a much-needed extension of
eration;

(1) OJ L 191, 13.7.2001, p. 45.
(2) OJ L 184, 17.7.1999, p. 23.

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter and scope

this Directive

The purpose of

1.
to harmonise
requirements for the drawing up, approval and distribution
of the prospectus to be published when securities are offered
to the public or admitted to trading on a regulated market
situated or operating within a Member State.

is

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2.

This Directive shall not apply to:

(a) units issued by collective investment undertakings other

than the closed-end type,

(b) non-equity 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, by the European Central Bank or by the
central banks of the Member States,

any other type of transferable securities giving the right
the aforementioned securities, as a
to acquire any of
the rights
consequence of
conferred by them being exercised, provided that
the
latter type of securities are issued by the issuer of the
underlying shares or by an entity belonging to the group
of the said issuer;

them being converted or

(c)

‘non-equity securities’ mean all securities that are not
equity securities;

(c) securities unconditionally and irrevocably guaranteed by a
Member State or by one of a Member State's regional or
local authorities,

(d)

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

‘offer of securities to the public’ means a communication
to persons in any form and by any means, presenting
sufficient information on the terms of the offer and the
securities to be offered, that might enable an investor to
decide to purchase or subscribe to these securities. This
definition shall also be applicable to the placing of
securities through financial intermediaries;

(e) non-equity securities issued in a continuous or repeated
manner by credit institutions provided that these securities:

(e)

‘qualified investors’ mean:

(i) are not subordinated, convertible or exchangeable;

(ii) do not give a right to subscribe to or acquire other
types of securities and that they are not linked to a
derivative;

(iii) materialise reception of repayable deposits;

(iv) are covered by a deposit guarantee scheme under

Directive 94/19/EC (1).

Notwithstanding Paragraph 2(b), a Member State or one
3.
of a Member State's regional or local authorities, a public inter-
national body of which one or more Member States are
members, the European Central Bank or the central banks of
the Member States shall have the possibility to draw up a
prospectus in accordance with this Directive when securities
are offered to the public or admitted to trading on a regulated
market.

Article 2

Definitions

For the purposes of this Directive, the following defi-

1.
nitions shall apply:

(a)

‘securities’ mean transferable securities as defined by
Article 1(4) of Directive 93/22/EEC with the exception
of bonds or other debt securities, having a maturity of
less than one year, and which are not subordinated,
convertible or exchangeable and do not give a right to
subscribe to or acquire other types of securities and that
are not linked to a derivative;

(b)

‘equity securities’ mean shares and other
transferable
securities equivalent to shares in companies as well as

investment

(i) legal entities which are authorised or regulated to
operate in the financial markets, including: credit insti-
other
firms,
tutions,
or
authorised
insurance companies,
institutions,
regulated financial
collective investment schemes and their management
companies, pension funds and their management
companies, commodity dealers as well as entities not
authorised or regulated whose corporate purpose is
solely to invest in securities;

(ii) national and regional governments, central banks,
institutions such as
international and supranational
the International Monetary Fund,
the World Bank,
the European Central Bank, the European Investment
Bank and other similar international organisations;

(iii) other

legal

entities which

are

not

small

or

medium-sized enterprises;

(iv) natural persons if they expressly ask to be considered
as qualified investors and meet at least two of the
criteria set out in paragraph 3;

(f)

‘small and medium-sized enterprise’ means a company,
consolidated
which according to its
accounts, meets at
the following three
least
criteria: an average number of employees during the
financial year of less than 250, a total balance sheet not
exceeding EUR 43 000 000 and an annual net turnover
not exceeding EUR 50 000 000;

last annual or
two of

(g)

‘credit institution’ means an undertaking whose business is
to receive deposits or other repayable funds from the
public and to grant loans for its own accounts;

(1) OJ L 135, 31.5.1994, p. 5.

(h)

‘issuer’ means a legal entity which issues or proposes to
issue securities;

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(i)

(j)

(k)

(l)

‘person making an offer’ (or ‘offeror’) means a legal entity
or individual which offers securities to the public;

as representing the rights of the participants in such an
undertaking over its assets;

‘regulated market’ means a market as defined by Article
1(13) of Directive 93/22/EEC;

(q)

‘offering programme’ means an issuer's plan for
the
issuance of non-equity securities having a similar type
and/or class, in a continuous or repeated manner during
a specified issuing period;

‘securities issued in a continuous or repeated manner’
means issues on tap with at least two separate issues of
securities of a similar type and/or class over a period of
twelve months;

(m) ‘home Member State’ means:

‘approval’ means prior scrutiny of the completeness of the
prospectus by the home competent authority including the
coherence of the information given and its comprehensi-
bility.

For the purposes of paragraph 1(d) the following types of
2.
offer shall not be considered as an offer of securities to the
public:

(a) an offer of securities addressed to qualified investors;

(b) an offer of securities addressed to less than 100 natural or
than qualified

legal persons per Member State, other
investors;

(i) for non-equity securities whose denomination per unit
amounts to at least EUR 50 000, the Member State
where the issuer has its registered office, or where the
securities were or are to be admitted to trading on a
regulated market or where the securities are offered to
the public at the choice of the issuer, the offeror or
the person asking for admission, as the case may be;

(c) an offer of securities addressed to investors who acquire
securities for a total consideration of at least EUR 50 000
per investor, for each discreet offer;

(d) an offer of

securities whose denomination per unit

amounts to at least EUR 50 000;

(ii) for all EU issuers of securities whose denomination
per unit amounts to less than EUR 50 000,
the
Member State where the issuer has its registered
office;

(e) an offer of securities with a total consideration of less than
EUR 2 500 000 which limit shall be calculated over a
period of twelve months.

(iii) for all

issuers of securities incorporated in a third
country and whose denomination per unit amounts
to less than EUR 50 000, the Member State where the
securities are intended to be offered for the first time
after the entry into force of this Directive or where
the first application for admission to trading is made
on a regulated market, at the choice of the issuer, the
offeror or the person asking for admission, as the case
may be.

However, any subsequent resale of securities shall be regarded
as a separate offer and the definition set out to in paragraph
1(d) shall apply to decide whether it is an offer of securities to
the public. Transactions
solely executed upon customers'
orders, whether on or off exchange, shall not be considered
as an offer of securities to the public.

For the purposes of paragraph 1(e)(iv)

3.
criteria shall apply:

the following

‘host Member State’ means the State where an offer to the
public is made or admission to trading is sought when
different from the home Member State;

(a) the investor has carried out, transactions, in significant size,
on securities market at an average frequency of 10 per
quarter over the previous four quarter;

investment

‘collective
closed-end type’ means unit
companies:

undertaking

trusts

other

than
the
and investment

(b) the size of

the investor's

securities portfolio exceeds

EUR 0,5 million;

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

(c)

the investor works or has worked in the financial sector for
at least one year in a professional position which requires
knowledge of securities investment.

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

‘units of
investment undertaking’ mean
securities issued by a collective investment undertaking

collective

a

Each competent authority shall ensure that appropriate mech-
anisms are in place for a register of qualified investors, taking
into account the need to ensure an adequate level of data
protection. The register shall be available to all issuers. Each
natural person wishing to be considered as qualified investor
shall register and such registered investor may decide whenever
to opt out.

(n)

(o)

(p)

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the Commission shall

In order to take account of technical developments on
4.
financial markets and to ensure uniform application of this
in accordance with the
Directive,
procedure set out
implementing
measures concerning the definitions referred to in paragraph
1, including the possible increase of the figures used for the
definition of SMEs taking into account the evolution of the
economic trend and disclosure measures related to the regis-
tration of individual qualified investors.

in Article 24(2), adopt

Article 3

Obligation to publish a prospectus

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

2. Member States
shall ensure that any admission of
situated or
securities
operating within their territories is subject to the publication
of a prospectus.

to trading on a regulated market

Article 4

Exemptions from the obligation to publish a prospectus

The obligation to publish a prospectus set out in Article
the following types of

1.
3 shall not apply to the offer of
securities:

(a) shares issued in substitution for shares of the same class
already issued, if the issuing of such new shares does not
involve any increase in the issued capital;

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

(c) securities offered, allotted or to be allotted in connection
is available
the
by
to that of the

with a merger, provided that a document
containing
information which
competent authority as being equivalent
prospectus;

regarded

is

(e) securities offered, allotted or to be allotted to existing or
former directors or employees by the issuer or an affiliated
undertaking provided that
is published
containing information on the number and nature of the
securities and the reasons for and detail of the operation.

a document

2.
The obligation to publish a prospectus shall not apply to
the admission to trading on a regulated market of the following
types of securities:

(a) shares representing, over a period of twelve months, less
than 10 per cent of the number of shares of the same class
already admitted to trading on the same regulated market;

(b) shares issued in substitution for shares of the same class
already admitted to trading on the same regulated market,
if the issuing of such shares does not involve any increase
in the issued capital;

(c) securities offered in connection with a take over by means
of an exchange offer, provided that a document is available
containing information which is regarded by the competent
authority as being equivalent to that of the prospectus;

(d) securities offered, allotted or to be allotted in connection
is available
the
by
to that of the

with a merger provided that a document
containing
information which
competent authority as being equivalent
prospectus;

regarded

is

(e) shares offered, allotted or to be allotted free of charge to
existing shareholders, and dividends paid out in the form of
shares of the same class as the shares in respect of which
such dividend is paid, provided that said securities are of
the same class as the securities already admitted to trading
on the same regulated market and that a document is
published containing information on the number and
nature of the shares and the reasons for and detail of the
operation;

(f) securities offered, allotted or to be allotted to existing or
former directors or employees by the issuer or an affiliated
undertaking, provided that the said securities are of the
same class as the securities already admitted to trading
on the same regulated market;

(d) shares offered, allotted or to be allotted free of charge to
existing shareholders and dividends paid out in the form of
shares of the same class as the shares in respect of which
the dividend is paid, provided that a document is published
containing information on the number and nature of the
shares and the reasons for and detail of the operation;

(g) shares resulting from the conversion or exchange of other
securities or from the exercise of the rights conferred by
other securities, provided that said securities are of the
same class as the securities already admitted to trading
on the same regulated market.

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In order to take account of technical developments on
3.
financial markets and to ensure uniform application of this
Directive,
in accordance with the
procedure referred to in Article 24(2), adopt implementing
exemptions
the
measures
provided for in paragraphs 1 and 2 of this article.

the Commission shall,

terminology

concerning

and

CHAPTER II

DRAWING UP OF THE PROSPECTUS

Article 5

The prospectus

1.
The prospectus shall contain all the information which,
according to the particular nature of the issuer and of the
is
securities offered to the public or admitted to trading,
necessary to enable investors to make an informed assessment
of the assets and liabilities, financial position, profit and losses,
and prospects of the issuer and any guarantor of the rights
attaching to such securities. This information shall be presented
in an easily analysable and comprehensible form.

2.
The prospectus shall contain information concerning the
issuer and the securities offered to the public or to be admitted
to trading on a regulated market.
It shall also include a
summary. The summary shall not be more than 2 500 words
in the language in which the prospectus was first written, be
written in non-technical language, convey the essential charac-
teristics and risks associated with the issuer, any guarantor and
the securities offered to the public or admitted to trading and
contain a warning that:

(a)

it should be read as an introduction to the prospectus, and

(b) any decision to invest in the securities should be based on
consideration of the prospectus as a whole by the investor.

Where the prospectus relates to the admission to trading on a
regulated market of non-equity securities having a denomi-
nation of at least EUR 50 000, there shall be no requirement
to provide a summary.

as

as a

single or

3.
The issuer, offeror or person asking for the admission to
trading on a regulated market may decide to draw up the
separate documents. The
prospectus
include a
prospectus composed of separate documents shall
registration document, a securities note and a summary note.
The registration document shall contain the information related
to the issuer. The securities note shall contain the information
concerning the securities offered or to be admitted to trading
on a regulated market.

concerning the issuer and the securities to be offered to the
public or admitted to trading:

(a) non-equity securities issued under an offering programme;

(b) non-equity securities issued in a continuous or repeated

manner by credit institutions,

(i) where the sums deriving from the issue of the said
securities, according to national
legal provisions, are
placed in assets which provide sufficient coverage for
the liability deriving from securities until their maturity
date, and

in the event of the bankruptcy of the related
(ii) where,
the said sums are intended, as a
institution,
credit
priority,
to repay the capital and interest becoming
due, without prejudice to the provisions of Directive
2001/24/EC (1).

The information given in the base prospectus shall be supple-
mented, if necessary, with updated information on the issuer
and on the securities to be offered to the public or admitted to
trading in accordance with Article 16. If the final terms of the
included in either the base prospectus or a
offer are not
supplement,
terms shall be provided to investors
and filed with the competent authority when each public
offering is made as soon as practicable but not necessarily in
advance of the beginning of the offer.

the final

5.
In order to take account of technical developments on
financial markets and to ensure uniform application of this
Directive,
in accordance with the
procedure referred to in Article 24(2), adopt implementing
measures concerning the format of the prospectus or base
prospectus and supplements.

the Commission shall,

Article 6

Responsibility attached to the prospectus

supervisory bodies of

1. Member States shall ensure that the responsibility for the
information given in a prospectus is incumbent upon the
administrative, management or
the
the offeror, the person asking for the admission to
issuer,
trading on a regulated market or the guarantor as the case
may be. The persons responsible shall be clearly identified in
the prospectus with their names and functions as well as
declarations by them that, to the best of their knowledge, the
information contained in the prospectus is in accordance with
the facts and that the prospectus makes no omission likely to
affect its import.

2. Member States shall ensure that their laws, regulation and
administrative provisions on civil
liability applies to those
persons responsible for the information given in a prospectus.

4.
For the following types of securities, the prospectus shall
be defined as a base prospectus with all relevant information

(1) OJ L 125, 5.5.2001, p. 15.

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However, Member States shall ensure that no civil liability shall
attach to any person solely on the basis of the summary,
including any translation thereof, unless it is misleading, inac-
curate or inconsistent when read together with the other parts
of the prospectus.

commission organisations, and in particular by the Inter-
national Organisation of Securities Commissions (IOSCO) and
on the indicative Annexes to this Directive.

Article 7

Minimum information

1.
Detailed implementing measures regarding the specific
information which must be included in the prospectus and
information when a prospectus is
avoiding duplication of
composed of separate documents shall be adopted by the
Commission in accordance with the procedure referred to in
Article 24(2). The first set of implementing measures shall be
adopted within 180 days after the entry into force of this
Directive.

In particular, while developing the different models of
prospectuses, account shall be taken of the following:

(a) the different

types of

information needed by investors
relating to equity securities as compared to non equity-
securities while taking a consistent approach with regard
to information required in a prospectus for securities which
have a similar economic rationale, notably derivative
securities;

(b) the different types and nature of offers and admissions to
trading of non-equity securities. The information items
required in a prospectus being appropriate from the
point of view of the investors concerned for non-equity
securities having a denomination per unit of at
least
EUR 50 000;

(c) the

format used and the
relating

prospectuses
offering programme;

information required in
an

issued under

to securities

(d) the

are

securities

format used and the

information required in
insofar as
prospectuses relating to non-equity securities,
these
convertible,
exchangeable, subject to subscription or acquisition rights
or linked to derivatives products, issued on a continuous or
repeated manner by entities authorised or regulated to
operate in the financial markets within the European
Economic Area;

subordinated,

not

(e) the different activities and size of the issuer, in particular
small and medium-sized enterprises. For such companies
the information shall be adapted to their size and, where
appropriate, to their shorter track record.

2.
The implementing rules referred to in paragraph 1 shall
be based on the standards in the field of financial and non
securities
information set out by international
financial

Article 8

Omission of information

1. Member States shall ensure that where the final offering
price and amount of securities which will be sold to the public
cannot be included in the prospectus:

(a) the criteria, and/or the conditions according to which, the
above elements will be determined or, in the case of price,
the maximum price should be disclosed in the prospectus,
or

(b) the

acceptances of

the purchase or

subscription of
securities may be withdrawn for not less than 48 hours
after the final offering price and amount of securities which
are offered to the public have been filed.

The final terms shall be filed with the competent authority of
the home Member State and published according to the
arrangements provided for in Article 14(2).

The competent authority of the home Member State may
2.
certain
authorise
information provided for
in the
implementing rules referred to in Article 7(1), if it considers
that:

the omission from the prospectus of
in this Directive or

(a) disclosure of such information would be contrary to the

public interest; or

(b) disclosure of such information would be seriously detri-
mental to the issuer, provided that the omission would
not be likely to mislead the public with regard to facts
and circumstances essential for an informed assessment of
the issuer, offeror or guarantor, if any, and of the rights
attached to the securities to which the prospectus relates.

adequate

3. Without prejudice
information of
to the
investors, where, exceptionally, certain information required
in implementing measures referred to in Article 7(1) to be
included in a prospectus are inappropriate to the issuer's
sphere of activity or to the legal form of the issuer or to the
securities to which the prospectus relates, the prospectus shall
contain information equivalent to the required information. If
there is no such equivalent information, the requirement shall
not apply.

4.
In order to take account of technical developments on
financial markets and to ensure uniform application of this
Directive,
in accordance with the
procedure referred to in Article 24(2), adopt implementing
measures concerning paragraph 1, 2 and 3.

the Commission shall,

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Article 9

Validity of a prospectus, base prospectus and registration
document

A prospectus shall be valid during twelve months after its
1.
publication for offers to the public or admissions to trading on
the
a regulated market
prospectus
required
pursuant to Article 16.

in a Member State, provided that

completed with any supplements

is

In the

case of

2.
the base
prospectus, previously filed, shall be valid for a period of up
to twelve months.

an offering programme,

3.
In the case of non-equity securities issued in a continuous
or repeated manner by credit institutions, the base prospectus
shall be valid until maturity of the securities issued:

(a) where the sums deriving from the issue of

the said
securities, according to national
legal provisions, are
placed in assets which provide sufficient coverage for the
liability deriving from securities until their maturity date,
and

(b) where, in the event of the bankruptcy of the related credit
institution, the sums referred to in point (a) are intended, as
a priority, to repay the capital and interest becoming due,
without
of Directive
the
2001/24/EC.

provisions

prejudice

to

4.
A registration document, as referred to in Article 5(3),
previously filed, shall be valid for a period of up to twelve
it has been updated according to
months provided that
Article 10(1). The registration document accompanied with
the securities note, updated if applicable according Article
12(2), and the summary note shall be considered as a valid
prospectus.

Article 10

Investor protection

1.
Issuers whose securities are admitted to trading on a
regulated market shall at least update the information related
to the issuer and contained in a prospectus or in a registration
the financial
document every year after
statements, according to the requirements applicable to the
issuer in the home Member State.

the approval of

The obligation set out in paragraph 1 shall not apply to
2.
issuers of non-equity securities whose denomination per unit
amounts to at least EUR 50 000. Where the issuer is a small
or medium-sized enterprise,
laid
down in paragraph 1 shall be restricted to the annual
financial statements.

the updating requirement

The updated information of the registration document or
the prospectus shall be filed with the competent

3.
part of
authority of the home Member State.

Issuers may refer to the information and documents
4.
required pursuant
to Company Law Directives, Directive
2001/34/EC and Regulation (EC) No . . . [on the adoption of
International Accounting Standards]
the purpose of
complying with the requirement laid down in paragraph 1,
provided that those information and documents comply with
the information requirements set out in this Directive and in its
implementing measures.

for

5.
Issuers whose securities have already been admitted to
trading on a regulated market shall file with the competent
authority of
their home Member State the first update of
information at the latest at the same time as the first presen-
tation of the annual accounts and reports after the 1 January
2006.

In order to take account of technical developments on
6.
financial markets and to ensure uniform application in the
Community of
in
accordance with the procedure referred to in Article 24(2),
adopt implementing measures concerning the annual update.
The first set of implementing measures shall be adopted within
180 days after the entry into force of this Directive.

the Commission may,

this Directive,

Article 11

Incorporation by reference

1. Member States shall allow information to be incorporated
in the prospectus by referring to one or more previously
published documents, which have been approved or filed in
accordance with this Directive, in particular pursuant to Article
10, or with Titles IV and V of Directive 2001/34/EC. This
information shall be the latest available to the issuer. The
summary referred to in article 5(3)
contain no
information incorporated by a reference.

shall

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.

the Commission shall,

In order to take account of technical developments on
3.
financial markets and to ensure uniform application of this
Directive,
in accordance with the
procedure referred to in Article 24(2), adopt implementing
measures concerning the information to be incorporated by
reference. The
shall be
adopted within 180 days after the entry into force of this
Directive.

implementing rules

set of

first

Article 12

Use of a registration document, securities note and
summary note

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

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In this case 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 latest updated registration document was approved.
The securities and summary notes shall be subject to a separate
approval.

notified to the issuer, the offeror or the person asking for
the
admission within 5 working days from the date of
decision taken by the competent authority of
the home
Member State. The time limit
in paragraph 2 shall apply
from this date.

Where, an issuer has only filed a registration document
without approval, updated information according to Article
10 shall be provided for all the documents. The whole docu-
mentation shall be subject to approval.

CHAPTER III

ARRANGEMENTS FOR THE APPROVAL AND PUBLICATION
OF THE PROSPECTUS

Article 13

Approval of the prospectus

No prospectus shall be published until

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

the offeror or

the draft prospectus.

The competent authority of the home Member State shall
2.
notify the issuer,
the person asking for
admission, as the case may be, of its decision regarding the
approval of the prospectus within 15 working days of the
competent
submission of
authority fails to give a decision within this maximum time
limit, the issuer, the offeror or the person asking for admission
shall be free to withdraw its application and apply for approval
of
the prospectus from a competent authority in another
Member State as defined in Article 2(1)(m)(i). A withdrawal
and new application shall be notified to both competent auth-
orities.

the

If

7.
This Directive shall not affect the competent authority's
liability, which shall continue to be governed solely by national
their national
law. Each Member State shall ensure that
provisions on competent authority's liability are only applicable
to approval of prospectuses given by their competent authority
or authorities. Nothing in this Directive shall prevent a Member
State from exonerating a competent authority from any liability
resulting from the approval of a prospectus.

8.
In order to take account of technical developments on
financial markets and to ensure uniform application of this
in accordance with the
Directive,
procedure referred to in Article 24(2), adopt implementing
measures concerning the conditions according to which
deadlines may be reduced.

the Commission may,

Article 14

Publication of the prospectus

1.
The prospectus shall be filed once approved with the
competent authority of the home Member State and shall be
made available to the public by the issuer, offeror or person
asking for the admission as soon as practicable and in any case,
at a reasonable time in advance of the beginning of the offer or
the admission to trading on a regulated market of the securities
involved.

The prospectus shall be deemed available to the public

2.
when published either:

The time limit

referred to in paragraph 2 shall be
3.
extended to 30 working days if
the public offer involves
securities issued by an issuer who does not have any securities
admitted to trading on a regulated market or who has not yet
offered securities to the public.

(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

4.
If the competent authority finds, on reasonable grounds,
that the documents submitted to it are incomplete or that
complementary
limits
information is needed,
referred to in paragraphs 2 and 3 shall only apply from the
date such complementary information is provided by the
issuer, the offeror or the person asking for admission.

time

the

5.
If the competent authority of the home Member State
fails to comment on the prospectus within the time limit
laid down in paragraphs 2 and 3, this shall be deemed to be
an approval of the application.

The competent authority of the home Member State may
6.
decide to transfer
to the
competent authority of another Member State, subject to the
agreement of that competent authority. This transfer shall be

the approval of a prospectus

(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
intermediaries placing or selling the securities,
financial
including paying agents, or

(c)

form on the

if
in electronic
applicable, on the web-site of the financial intermediaries
including paying agents.
placing or selling the securities,

issuer's web-site

and,

twelve months, at

The competent authority shall publish on its web-site
3.
its choice, all
the
over a period of
the list of prospectuses
prospectuses approved or, at
approved in accordance with Article 13,
if
applicable, a hyperlink to the prospectus published on the
website of the issuer.

including,

least

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In the case of a prospectus drawn up with several
4.
documents and/or with information incorporated by reference,
the documents and information composing the prospectus may
be published and circulated separately as long as the said
documents are made available, free of charge, to the public,
according to the arrangements established in paragraph 2, with
a link between those documents.

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

6. Where the prospectus is made available by publication in
electronic form, a paper copy must nevertheless, be delivered
to the investor, upon his request and free of charge, by the
issuer, the offeror, the person asking for admission to trading
or the financial intermediaries placing or selling the securities.

In order to take account of technical developments on
7.
financial markets and to ensure uniform application in the
Community, the Commission shall,
in accordance with the
procedure referred to in Article 24(2), adopt implementing
measures concerning paragraphs 1, 2 and 3. The first set of
implementing measures shall be adopted within 180 days after
the entry into force of this Directive.

Article 15

Advertising

Any type of advertisements relating either to a public
to an admission to trading on a
the principles contained in

1.
offer of
securities or
regulated market, shall respect
paragraphs 2 to 5.

2.
Advertisements shall state that a prospectus will be or has
been published and indicate where investors will be able to
obtain it.

3.
Advertisements shall be clearly recognisable as such. The
information contained in an advertisement shall not be inac-
curate, misleading or inconsistent with that contained in the
prospectus.

4.
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.

5. Material
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
through an appropriate and relevant range of media, including
the issuer's web-site.

The competent authority of the home Member State shall
6.
have the power to exercise control over the compliance of the
advertising activity, relating to a public offer of securities or an
admission to trading, with the principles
referred to in
paragraphs 2 to 5.

the Commission shall,

7.
In order to take account of technical developments on
financial markets and to ensure uniform application of this
in accordance with the
Directive,
procedure referred to in Article 24(2), adopt implementing
measures concerning 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 available to the public or before the opening of
the subscription and concerning paragraph 4. The first set of
implementing measures shall be adopted by the Commission
within 180 days after the entry into force of this Directive.

Article 16

Supplement to the prospectus

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

the offer or,

CHAPTER IV

MULTINATIONAL OFFERINGS AND ADMISSION TO TRADING

Article 17

Community scope of an approval of a prospectus

1. Without prejudice to Article 23, where an offer to the
is
public or admission to trading on a regulated market
foreseen in one or more Member States, or in a Member
State other than the home Member State,
the prospectus
approved by the home Member State, as well as any
supplements, shall be valid for public offer or admission to
trading in any number of host Member States, provided that
the competent authority of each host Member State is notified
in accordance with Article 18. Competent authorities of host
Member States shall undertake no approval or administrative
procedures related to prospectuses.

the

since

approval of

the prospectus,

there are significant new factors, as referred to in
2.
If
Article 16,
the
competent authority of the home Member State shall require
the publication of a supplementary document to be approved
as provided for in Article 13(1). The competent authority of
the host Member State may draw the attention of
the
competent authority of the home Member State to the need
for any new information.

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Article 18

Notification

1.
The competent authority of the home Member State shall,
at the request of the issuer, within three working days from
that request provide the competent authority of
the host
Member States with a certificate of approval attesting that
the prospectus has been drawn up in accordance with this
this notification is accompanied by
Directive.
the translation of the summary produced under the responsi-
bility of the issuer. The same procedure shall be followed for
any supplement to the prospectus.

If applicable,

2.
The application of the provisions referred to in Article
8(2) and (3) shall be stated in the certificate, as well as its
justification.

nation per unit amounts to at least EUR 50 000 is sought in
one or more Member States, the prospectus shall be drawn up
either in a language accepted by the competent authorities in
the home and host Member States or in a language customary
in the sphere of international finance, at the choice of the
issuer, offeror, or person asking for admission as the case
may be.

Article 20

Issuers incorporated in third countries

The competent authority of the home Member State of
1.
issuers having their registered office in a third country may
approve a prospectus for an offer to the public or for an
admission to trading on a regulated market, drawn up
according to the legislation of a third country, provided that:

CHAPTER V

LANGUAGE REGIME AND ISSUERS INCORPORATED IN
THIRD COUNTRIES

(a) this prospectus has been drawn up according to inter-
national
securities
commission organisations, including the IOSCO Disclosure
Standards and

set out by international

standards

Article 19

Language regime

(b) the information requirements, including information of a
financial nature, are broadly equivalent to the requirements
under this Directive.

1. Where an offer to the public is made or admission to
trading is
the
prospectus shall be drawn up in a language accepted by the
competent authority in the home Member State.

sought only in the home Member State,

is sought
excluding the home Member State,

2. Where an offer to the public is made or admission to
in one or more
trading on a regulated market
Member States
the
prospectus shall be drawn up either in a language accepted
by the competent authorities in those Member States or in a
language customary in the sphere of international finance, at
the choice of the issuer, offeror or person asking for admission,
as the case may be. The competent authority of each host
Member State may only require that the summary be translated
into its language(s).

In the case of offer to the public or admission to trading
2.
of securities issued by an issuer incorporated in a third country
in a Member State other than the home Member State, the
requirements set out in Articles 17, 18 and 19 shall apply.

3.
In order to ensure uniform application of this Directive,
the Commission may decide, in accordance with the procedure
referred to in Article 24(2), that a third country ensures the
broad equivalence of prospectuses drawn up in that country
with this Directive, by reason of its domestic law, or of the
practices or procedures based on international standards set out
by international organisations, including the IOSCO Disclosure
Standards. The Member States
the measures
necessary to comply with the Commission's decision.

shall

take

including

the home Member State,

3. Where an offer to the public is made or admission to
trading on a regulated market is sought in more than one
Member State
the
prospectus shall be drawn up in a language accepted by the
competent authority in the home Member State and shall also
be made available either
in a language accepted by the
competent authorities in the host Member States or in a
language customary in the sphere of international finance, at
the choice of the issuer, offeror, or person asking for admission
as the case may be. The competent authority of each host
Member State may only require that the summary referred to
in Article 5(2) be translated into its language(s).

CHAPTER VI

COMPETENT AUTHORITIES

Article 21

Rights

1.
Each Member State shall designate a central competent
administrative authority responsible for carrying out the obli-
gations provided for in this Directive and for ensuring that the
provisions adopted pursuant to this Directive are applied.

4. Where an offer to the public is made or admission to
trading on a regulated market of securities whose denomi-

However,
trative authorities to apply Chapter III.

this Member State may designate other adminis-

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These competent authorities shall be completely independent
from all market participants.

If a multinational offering or admission to trading in more than
one Member State is sought, only the central competent
authority designated by each Member State shall be entitled
to approve the prospectus.

Member States shall
administrative authorities they have designated.

inform the Commission of the list of

2. Member States may allow their competent authority or
authorities to delegate tasks. Any delegation of tasks to other
entities than the authorities referred to in paragraph 1,
in
particular
regulated markets,
shall be made in a specific manner stating the tasks to be
undertaken and the conditions under which they should be
carried out.

in distinguishing risk capital

These conditions shall include a clause obliging the entity in
question to be organised in a manner so as to avoid conflict of
interest and so that information obtained from carrying out the
delegated tasks is not used unfairly or to prevent competition.
In any case, the final responsibility for supervising compliance
with the provisions of
this Directive and implementing
lie with the competent authority/ies
measures adopted shall
designated in accordance with paragraph 1.

Member States shall
inform the Commission and competent
authorities of other Member States of any arrangements
entered with regard to delegation of tasks.

Each competent authority shall have all

3.
the rights
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, offerors or persons asking for admission to
supplementary

trading to include
information if necessary for investor protection;

in the prospectus

(b) require issuers, offerors or persons asking for admission to
trading, and the persons
them or are
controlled by them to provide information and documents;

control

that

(c) require auditors and managers of the issuer, offeror or
inter-
the offer or

person asking for admission, as well as financial
mediaries
commissioned to carry out
admission to trading, to provide information;

(d) suspend a public offer or admission to trading for a
it has reasonable
this

maximum of 10 days at one time if
grounds
Directive have been infringed;

the provisions of

suspecting that

for

(e) prohibit or suspend advertising for a maximum of 10 days
the

if
provisions of this Directive have been infringed;

reasonable grounds

for believing that

it has

(f) prohibit a public offer if it finds that the provisions of this
it has reasonable

Directive have been infringed or
grounds for suspecting that they would be infringed;

if

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

(h) prohibit trading on a regulated market if it finds that the

provisions of this Directive have been infringed;

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

its obligations.

Where necessary, the competent authority may request to the
relevant judicial authority for permission to enforce the rights
referred to in points (d) to (h) of the first sub-paragraph.

The competent authority/ies shall, once the securities
4.
have been admitted to trading on a regulated market, have
the right to:

(a) require the issuer to disclose all material information which
may have an effect on the assessment of the securities
offered to the 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 in Articles 102 and 103 of Directive 2001/34/EC and
that equivalent information is provided to investors and
equivalent treatment is granted by the issuer to all securities
holders who are in the same position, in all Member States
where the offer is made or the securities are traded.

5.
Paragraphs 1 to 4 shall be without prejudice to the possi-
bility for a Member State to make separate legal and adminis-
for
for overseas European territories
trative arrangements
whose external relations that Member State is responsible.

Article 22

Professional secrecy and cooperation between authorities

1.
The obligation of professional secrecy shall apply to all
persons who work or who have worked for the competent
authority and for entities to whom competent authorities
may have delegated certain tasks.
Information covered by
professional
secrecy may not be disclosed to any other
person or authority except by virtue of provisions laid down
by law.

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Competent authorities of Member States shall cooperate
2.
with each other, whenever necessary,
for the purpose of
carrying out their duties and making use of their powers.
Competent authorities shall render assistance to competent
authorities of other Member States. In particular, they shall
exchange information and cooperate in their activities when
an issuer has more than one home competent authority
because of its various classes of securities. Where appropriate,
the competent authority of the host Member State may request
assistance of the competent authority of the home Member
State from the stage at which the case is scrutinised,
in
particular as regards new type or rare forms of securities.
The competent authority of the home Member State may ask
for information to the competent authority of the host Member
State on any items specific to the relevant market.

Paragraph 1 shall not prevent the competent authorities
3.
Information thus
from exchanging confidential
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 23

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
procedures or breaches of the issuer's obligations, resulting
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 persists 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

according to this procedure do not modify the essential
provisions of this Directive.

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

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

4. Without prejudice to the implementing measures already
adopted, on the expiry of a four-year period following its entry
into force, the application of the provisions of this Directive
stipulating the adoption of technical rules and decisions in
accordance with the procedure referred to in paragraph 2
shall be suspended. On a proposal from the Commission, the
renew the
European Parliament
provisions concerned in accordance with the procedure laid
down in Article 251 of the Treaty and, to that end, shall
review them prior to the expiry of the four-year period.

and the Council may

Article 25

Sanctions

1. Without prejudice to the right of Member States to
impose criminal sanctions, Member States shall ensure that
the appropriate administrative measures can be taken or
sanctions be imposed against the persons responsible, where
the provisions adopted pursuant to this Directive have not
been complied with. Member States shall ensure that these
measures are effective, proportionate and dissuasive.

2. Member States shall provide that the competent authority
may disclose to the public every measure or sanction that will
the provisions adopted
be imposed for
pursuant
the disclosure would
seriously jeopardise the financial markets or cause dispropor-
tionate damage to the parties involved.

to this Directive, unless

infringement of

Article 26

Right of appeal

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

adopted
to the right

administrative

provisions

and

CHAPTER VII

IMPLEMENTING MEASURES

Article 24

Committee

CHAPTER VIII

TRANSITIONAL AND FINAL PROVISIONS

Article 27

Amendements

The Commission shall be assisted by the European

1.
Securities Committee, instituted by Decision 2001/528/EC.

With effect
2001/34/EC is amended as follows:

from the date set out in Article 29, Directive

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

1. Article 3 is deleted,

2. Articles 20 to 41 are deleted,

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3. Articles 98 to 101 are deleted,

4. Article 104 is deleted,

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.

5. Article 107(3) the first sub-paragraph is deleted,

6. In Article 108(2)(a), ‘conditions of establishment, the control
and circulation of listing particulars to be published for
admission’ are deleted,

7. Article 108(2)(c)(ii) is deleted,

8. Annex I is deleted.

Article 28

Repeal

Directive 89/298/EEC shall be repealed from the date specified
in Article 29. References to the repealed Directive shall be
construed as references to this Directive.

Article 29

Transposition

Article 30

Transitional provision

Issuers of securities incorporated in a third country and whose
securities have already been admitted to trading on a regulated
market shall choose their competent authority in accordance
with Article 2(1)(m)(iii) and notify their decision to the
competent authority of their chosen home Member State at
the latest by 31 December 2005.

Article 31

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.

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by 30 June 2004, at
the latest. When Member
States adopt those provisions they shall contain a reference

Article 32

Addressees

This Directive is addressed to the Member States.

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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:

— identity of directors, senior management, advisors and auditors

— offer statistics and expected timetable

— key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of

proceeds; risk factors

— information concerning the issuer:

— history and development of the issuer

— business overview

— operating and financial review and prospects:

— research and development, patents and licences, etc.

— trend information

— directors, senior management and employees

— major shareholders and related party transactions

— financial information:

— consolidated statement and other financial information

— significant changes

— the offer and admission to trading details:

— offer and admission to trading details

— plan of distribution

— markets

— selling shareholders

— dilution (shares)

— expenses of the issue

— additional information:

— share capital

— memorandum and articles of incorporation

— 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 6 of the
Directive and those responsible for auditing the financial statements.

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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

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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.

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

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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 6 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

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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.

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

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Official Journal of the European Communities

28.1.2003

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 6 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

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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:

— identity of directors, senior management, advisors and auditors

— offer statistics and expected timetable

— key information concerning selected financial data; capitalisation and indebtedness; reasons for the offer and use of

proceeds; risk factors

— information concerning the issuer:

— history and development of the issuer

— business overview

— operating and financial review and prospects:

— research and developments, patents and licences, etc.

— trend information

— directors, senior management and employees

— major shareholders and related party transactions

— financial information:

— consolidated statement and other financial information

— significant changes

— the offer and admission to trading details:

— offer and admission to trading details

— plan of distribution

— markets

— selling shareholders

— dilution (shares)

— expenses of the issue

— Additional information

— share capital

— memorandum and articles of incorporation

— documents on display