Proposal for a Directive of the European Parliament and of the Council amending directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (text with EEA relevance) {SEC(2009)1222} {SEC(2009)1223}
Date: 2009-09-23
Institutions: European Commission
Subjects: approximation of laws, consumer information, dissemination of information, investment, official document, official market, securities, stock exchange, stock-exchange listing

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.9.2009 
COM(2009) 491 final 

2009/0132 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directives 2003/71/EC on the prospectus to be published when securities are 
offered to the public or admitted to trading and 2004/109/EC on the harmonisation of 
transparency requirements in relation to information about issuers whose securities are 
admitted to trading on a regulated market  

(Text with EEA relevance)  

{SEC(2009)1222} 
{SEC(2009)1223} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL  

In  January  2007,  the  European  Commission  launched  the  Action  Programme  for  reducing 
administrative  burdens  of  existing  regulation  in  the  European  Union  underlining  its 
commitment to Better Regulation as part of the "Growth and Jobs" strategy1. The European 
Council agreed in March 2007 on a reduction target of 25 % to be achieved jointly by the EU 
and  Member  States  by  2012  in  order  to  enhance  the  competitiveness  of  companies  in  the 
Community.  Moreover,  Article  31  of  the  Prospectus  Directive2  required  the  Commission  to 
assess the application of the Directive five years after its entry into force and to present, where 
appropriate,  proposals  for  its  review.  After  five  years  of  its  entry  into  force,  the  general 
assessment of the overall effect of the Directive has been positive.  

However,  despite  this  general  success,  the  Directive  has  been  identified  as  one  area  that 
contains  a  number  of  legal  uncertainties  and  unjustified  burdensome  requirements  that 
increase  costs  and  create  inefficiencies  hampering  the  process  of  raising  funds  from  the 
securities markets for companies and financial intermediaries in the EU. In addition, in order 
to  further  enhance  investor  protection  and  thus  respond  effectively  to  the  current  financial 
crisis,  the  summary  of  the  prospectus  should  be  improved  in  terms  of  simplicity  and 
readability.  This  exercise  will  be  consistent  with  the  approach  to  be  adopted  following  the 
Commission's  Communication  on  Packaged  Retail  Investment  Products,  which  aims  for 
horizontal requirements on pre-contractual disclosures and selling practices for a wide range 
of retail investment product types3. The overarching goal of the current proposal is to simplify 
and improve the application of the Directive, increasing its efficiency and enhancing the EU's 
international  competitiveness,  bearing  in  mind  the  importance  of  enhancing  the  level  of 
investor  protection  envisaged  in  the  Directive  and  ensuring  that  the  information  provided  is 
sufficient and adequate to cover the needs of retail investors, particularly in the context of the 
financial  market  turbulence  that  started  in  2007.  This  exercise  is  linked  to  the  European 
Economic Recovery Plan and the financial services reform announced in the Communication 
of 4 March for the Spring European Council "Driving European Recovery"4.  

2. 

CONSULTATION OF INTERESTED PARTIES  

The proposal is the result of an extensive and continuous dialogue and consultation with all 
major  stakeholders,  including  securities  regulators,  market  participants  and  consumers.  It  is 
built upon the observations and analysis contained in the reports published by the Committee 

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4 

http://ec.europa.eu/enterprise/regulation/better_regulation/docs/com_2007_23_en.pdf  
Directive  2003/71/EC  of  the  European  Parliament  and  of  the  Council  of  4  November  2003  on  the 
prospectus  to  be  published  when  securities  are  offered  to  the  public  or  admitted  to  trading  and 
amending Directive 2001/34/EC. OJ L 345, 31.12.2003, p. 64.  
The exercise of the review of the Prospectus Directive is not a duplication of the work to be undertaken 
under  the  Commission's  Communication  on  Packaged  Retail  Investment  Products  because  this  will 
cover different types of retail investment products (such as unit-linked life insurance, investment funds, 
certain structured notes and certificates) which are outside the scope of the Prospectus Directive and do 
not benefit from the level of investor protection now granted by the Prospectus Directive.  
COM (2009) 114 final of March 4, 2009.  

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of  European  Securities  Regulators  (CESR)5  and  by  the  European  Securities  Markets  Expert 
Group  (ESME)6.  It  makes  also  use  of  the  findings  of  a  study  completed  by  the  Centre  for 
Strategy & Evaluation Services (CSES)7. An open Internet consultation was conducted from 9 
January to 10 March 20098.  

3. 

IMPACT ASSESSMENT  

In line with its "Better Regulation" policy, the Commission conducted an impact assessment9 
of policy alternatives. Policy options were considered for the following topics:  

–  Divergent definitions of qualified investors in Article 2.1(e) of Directive and professional 

clients in Section II of Annex II of MiFID10;  

–  Restriction  of  the  choice  of  home  Member  State  for  the  issuers  of  non-equity  securities 

below EUR 1 000 in Article 2.1(m);  

–  Clarification  of  the  requirements  in  Article  3.2  of  the  Directive  in  case  of  subsequent 

placements of securities through financial intermediaries (retail cascade);  

–  Regime for Employees Shares Schemes in Article 4.1(e) of the Directive;  

–  Functioning of the summary of the prospectus;  

–  Burdensome disclosure requirements in case of rights issues of listed companies, offers of 
non-equity securities issued by credit institutions above the threshold mentioned in Article 
1.2(j)  of  the  Directive,  and  offers  of  securities  of  issuers  with  reduced  market 
capitalization;  

–  Lack of harmonized liability rules in Article 6 of the Directive;  

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CESR  is  an  independent  advisory  group  to  the  European  Commission  composed  by  the  national 
supervisors of the EU securities markets. See the European Commission's Decision of 23 January 2009 
establishing  the  Committee  of  European  Securities  Regulators  2009/77/CE.  OJ  L  25,  23.10.2009,  p. 
18). The role of CESR is to improve co-ordination among securities regulators, act as an advisory group 
to assist the EU Commission and to ensure  more consistent and timely  day-to-day implementation of 
community legislation in the Member States.  
ESME  is  an  advisory  body  to  the  Commission,  composed  of  securities  markets  practitioners  and 
experts.  It  was  established  by  the  Commission  in  April  2006  and  operates  on  the  basis  of  the 
Commission Decision 2006/288/EC of 30 March 2006 setting up a European Securities Markets Expert 
Group to provide legal and economic advice on the application of the EU securities Directives. OJ L 
106, 19.4.2006, p. 14-17.  
CSES is a private consultancy firm that carried out the study in response to a request for services in the 
context  of  the  Framework  Contract  for  Evaluation  and  Impact  Assessment  of  Internal  Market 
Directorate General activities.  
The Commission received 121 contributions. With the exception of those declared confidential by the 
under: 
respondents, 
http://ec.europa.eu/internal_market/consultations/2009/prospectus_en.htm  
The impact assessment report is accessible on the following website: AAA 
Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in 
financial  instruments  amending  Council  Directives  85/611/EEC  and  93/6/EEC  and  Directive 
2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC. 
OJ L 145, 30.4.2004, p. 1-44.  

responses 

available 

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–  Burdensome disclosure regime for government guarantee schemes;  

–  Duplication of disclosure requirements in Article 10 of the Directive;  

–  Requirements in Article 14 of the Directive relating to the printed form of the prospectus;  

–  Clarification of the obligation to supplement a prospectus and the exercise of the right of 

withdrawal in Article 16 of the Directive;  

–  Requirements in Article 18 of the Directive relating to the translation of the summary of 

the prospectus. 

Each policy option was assessed against the following criteria: investor protection, consumer 
confidence,  efficiency,  clarity  and  legal  certainty,  and  reduction  of  disproportionate  and 
administrative burdens. 

4. 

SIMPLIFICATION  

This  proposal  is  foreseen  in  the  Simplification  Rolling  Programme  for  adoption  by  the 
Commission  in  2009.  Significant  simplification  benefits  are  being  brought  about  whilst  the 
level  of  investor  protection  under  the  Directive  is  maintained.  Reducing  the  disclosure 
requirements  for  companies  with  reduced  market  capitalization  can  be  expected  to  generate 
overall  savings  of  €173  million  every  two  year s.  Rules  leading  to  double  transparency 
obligations are removed, eliminating unnecessary costs of a total of €30 million to companies. 
Exemption of Employee Shares Schemes from the obligation to publish a prospectus will save 
over  €18  million.  Reduction  of  disclosure  requ irements  for  raising  capital  through  rights 
issues  will  economize  almost  €80  million.  Excludi ng  detailed  information  on  the  financial 
situation  of  the  guarantor  in  case  of  government  guarantee  schemes  will  save  another  €812 
000.  The  total  potential  burden  savings  of  all  these  measures  is  estimated  to  be  up  to 
€302million per year. 

In its opinion of 18 September 2008 the High Level  Group of Independent Stakeholders on 
Administrative Burdens chaired by Mr. Stoiber advised the European Commission to consider 
the suppression of (i) the obligation in Article 14.2 for the person asking for the admission to 
trading or the financial intermediaries placing or selling the securities to deliver a paper copy 
of the prospectus free of charge, upon request of the investor to the offeror, because according 
to  a  group  of  industry  stakeholders  the  obligation  would  have  no  added  value  and  the 
electronic provision of information would be sufficient for effective supervision, and (ii) the 
obligation to provide the translation of the summary in case of cross-border offers according 
to Article 19.3 because a group of stakeholders considers that this requirement is unnecessary 
and advocates for the harmonisation of the language regime for the whole internal market.  

In relation to the obligation to deliver a paper copy of the prospectus, whilst the abolition of 
this obligation would be positive in terms of reducing the administrative burden for the person 
obliged  to  hand  the  prospectus  to  the  investor  (be  it  the  offeror,  the  person  asking  for  the 
admission  to  trading  or  the  financial  intermediaries  placing  or  selling  the  securities),  this 
would however reduce the level of investor protection because of the existing digital divide, 
namely in cases where the investor has no access to internet. The abolition of this obligation 
would  have  a  negative  impact  in  the  confidence  of  the  consumers  because  it  would  create 
discrimination between investors depending on whether they have internet access or not.  

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In relation to the obligation to translate the summary of the prospectus, whilst the abolition of 
this  obligation  would  reduce  the  administrative  burden  for  this  type  of  offers,  because  the 
person responsible for drawing up the prospectus could save the cost of the translations, this 
would be seriously detrimental for investor protection. In accordance with Article 5.2 of the 
Prospectus Directive, the summary of the prospectus reflects the essential characteristics and 
risks  associated  with  the  issuer,  any  guarantor  and  the  securities.  In  cases  where  the 
prospectus  is  "passported"  to  countries  where  the  investors  do  not  speak  the  language  in 
which the prospectus is drawn up it is essential that investors receive at least the summary of 
the prospectus in a language that they can understand. The option of abolishing this obligation 
would undermine consumer confidence because it would be contrary to the main objective of 
the  Prospectus  Directive:  to  provide  investors  with  information  necessary  to  enable  them  to 
make an informed investment decision (Article 5 of the Prospectus Directive). 

5. 

LEGAL ELEMENTS OF THE PROPOSAL  

5.1. 

Legal basis  

The proposal is based on Articles 44 and 95 of the EC Treaty.  

5.2. 

Subsidiary and proportionality  

A directive amending the current Directive is the most appropriate instrument. In accordance 
with the principles of subsidiarity and proportionality as set out in Article 5 of the EC Treaty, 
the objectives of the proposal cannot be sufficiently achieved by the Member States and can 
therefore  be  better  achieved  by  the  Community.  In  particular,  the  proposal  aims  to  increase 
legal  certainty  and  efficiency  in  the  prospectus  regime,  and  to  reduce  disproportionate  and 
administrative burdens for companies raising capital in the Community. Taking into account 
that offers of securities can have cross border dimension, this exercise can be better addressed 
by the Community: a consistent approach is essential in order to avoid regulatory arbitrage in 
the Member States and competition distortion in the various markets. The proposal respects 
the principle of proportionality because all solutions have been drafted bearing in mind cost-
efficiency, and it does not go beyond what it is necessary to achieve the objectives pursued.  

5.3. 

Detailed explanation of the proposal  

5.3.1.  Articles 1(2)(h) and (j), 1(4) and 3.2(e)  

The  way  limits  of  maximum  offering  amounts  are  calculated  in  the  Directive  may  lead  to 
varying interpretations in the different Member States. Therefore, for reasons of certainty and 
efficiency, it should be clarified that the total consideration of the offers mentioned in Articles 
1(2)(h) and (j) and 3(2)(e) of the Directive should be computed on a Community wide basis 
and not on  a country-by-country basis. Moreover, as the limits set out in  the Directive may 
eventually  become  outdated,  in  order  to  take  account  of  the  technical  developments  in  the 
financial markets and to ensure uniform application of the Directive, the Commission shall be 
empowered  to  adopt  implementing  measures  in  relation  to  these  limits.  Those  measures, 
designed  to  amend  non-essential  elements  of  this  Directive  by  supplementing  it,  shall  be 
adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a 
of Decision 1999/468/EC.  

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5.3.2.  Article 2(1)(e)  

The  definition  of  qualified  investors  in  Article  2.1(e)(i),  (ii)  and  (iii)  of  the  Directive  is 
different from the definition of professional clients set out in Section II of Annex II of MiFID 
and  investment  firms  cannot  rely  on  their  categorization  for  a  private  placement  and  thus 
benefit  from  the  exemption  in  Article  3(2)(a)  of  the  Directive.  This  creates  complexity  and 
costs for investment firms in case of private placements: a firm has to double check whether 
its  professional  clients  are  registered  as  qualified  investors  or  it  has  to  renounce  to  place 
securities within its professional clients. This situation restricts the issuers' ability to conduct 
private  placements  with  some  classes  of  experienced  individual  investors.  As  there  is  no 
justification in terms of investor protection for having divergent definitions for sophisticated 
investors in both directives, for the purposes of private placements of securities, investment 
firms  and  credit  institutions  shall  be  entitled  to  treat  as  qualified  investors  those  natural  or 
legal  persons  that  the  firms  consider  to  be  professional  clients  or  eligible  counterparties  in 
accordance with Section II of Annex II of MiFID.  

5.3.3.  Articles 2(1)(m)(ii)  

Article  2(1)(m)(ii)  imposes  a  restriction  on  the  choice  of  the  home  Member  State  (among 
those Member States where the issuer has its registered office or where the debt is going to be 
admitted to trading on a regulated market or where the debt is offered to the public) for issues 
of non-equity securities with a denomination per unit below EUR 1 000. If the denomination 
per unit is below EUR 1 000, the Directive provides that the home Member State is the one 
where  the  issuer  has  its  registered  office.  The  threshold  is  causing  practical  problems  to 
issuers  of  non-equity  securities  who  may  need  to  draw  up  several  prospectuses  for  a  single 
issue,  i.e.  one  to  cover  a  debt  issuance  program  within  the  threshold  and  another  for  the 
remaining debt issuance activities which might exceed that threshold. Moreover, the threshold 
cannot  apply  to  certain  structured  products  which  are  not  denominated.  In  order  to  increase 
the efficiency and flexibility of the issuance of debt in the Community, the limitation on the 
determination  of  the  home  Member  State  for  issues  of  non-equity  securities  with  a 
denomination below EUR 1.000 should be removed.  

Such  a  change  would  not  create  concrete  risks  in  terms  of  investor  protection  because  the 
characteristics  of  and  the  risks  associated  with  debt  securities  do  not  depend  on  the 
denomination of the securities offered or traded in a regulated market. As a consequence of 
this proposal, as issuers will be allowed to choose the home Member State for all non-equity 
security  independently  of  the  denomination,  such  a  possibility  currently  granted  by  the 
Directive for "non-equity securities giving the right to acquire any transferable securities or to 
receive a cash amount, as a consequence of their being converted or the rights conferred by 
them being exercised, provided that the issuer of the non-equity securities is not the issuer of 
the underlying securities or an entity belonging to the group of the latter issuer," will not be 
further necessary. Moreover, the mechanism for the determination of the home and the host 
Member States in Article 2(1)(i)(i) of Directive 2004/109/EC should be amended accordingly.  

5.3.4.  Article 3(2)  

Article 3(1) and (3) requires the publication of a prospectus when securities are offered to the 
public  and  when  they  are  admitted  to  trading  on  a  regulated  market.  Article  3(2)  sets  out  a 
number  of  circumstances  in  which  an  offer  of  securities  to  the  public  is  exempt  from  the 
requirement to publish a prospectus. However the lack of clarity in Article 3(2) seems to be 
causing  problems  for  issuers  in  some  markets  where  securities  are  distributed  by  "retail 

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cascade".  A  retail  cascade  typically  occurs  when  securities  are  sold  to  investors  (other  than 
qualified investors) by intermediaries and not directly by the issuer. In particular, it is unclear 
how the requirement to produce and update a prospectus, and the provisions on responsibility 
and  liability,  should  apply  when  securities  are  placed  by  the  issuer  with  financial 
intermediaries and are subsequently, over a period that may run to many months, sold on to 
retail  investors,  possibly  through  one  or  more  additional  tiers  of  intermediaries.  A  valid 
prospectus,  drawn  up  by  the  issuer  or  the  offeror  and  available  to  the  public  in  the  final 
placement  of  securities  through  financial  intermediaries  or  in  any  subsequent  resale  of 
securities,  shall  provide  sufficient  information  for  investors  to  make  informed  investment 
decisions. Therefore, financial intermediaries placing or subsequently reselling the securities 
should be entitled to rely upon the initial prospectus published by the issuer or the offeror as 
long as this is valid and duly supplemented in accordance with Article 9 and the issuer or the 
offeror responsible for drawing up such prospectus consents to its use. In this case no other 
prospectus  should  be  required.  However,  in  case  the  issuer  or  the  offeror  responsible  for 
drawing  up  such  initial  prospectus  does  not  consent  to  its  use,  the  financial  intermediary 
should  be  required  to  publish  a  new  prospectus.  The  financial  intermediary  could  use  the 
initial prospectus by incorporating the relevant parts by reference into its new prospectus.  

5.3.5.  Article 4(1)(e)  

Article 4(1)(e) grants an exemption specifically for offers of securities to employees, provided 
that  two  conditions  are  met:  (i)  the  issuer  must  have  securities  admitted  to  trading  on  a 
regulated market; and (ii) a document must be available containing information on the number 
and  nature  of  the  securities  and  the  reason  for  and  the  details  of  the  offer.  This  exemption 
does  not  apply  equally  to  all  employees,  but  creates  a  less  advantageous  situation  for  the 
employees of two categories of companies, namely third country companies that do not have a 
listing on a regulated market within the EU, and EU non-listed companies or EU companies 
that  have  securities  traded  on  EU  "exchange-regulated"  markets.  The  exemption  is  not 
available to third country issuers that do not have a listing on a regulated market because the 
concept  of  regulated  market  is  by  definition  limited  to  the  EU,  as  provided  for  in  Article 
4(1)(14)  of  MiFID,  and  it  is  equally  impossible  for  EU  non-listed  companies  or  EU 
companies  that  have  securities  traded  on  EU  exchange-regulated  markets  to  satisfy  this 
condition  because  once  again  they  are  not  listed  on  a  regulated  market  in  line  with  the 
applicable  MiFID  definition.  The  requirement  to  produce  a  full  prospectus  for  this  type  of 
offers is not an effective means of informing employees about the risks and benefits of this 
very particular kind of offer, and imposes excessive costs on employers that are not justified 
in  terms  of  investor  protection.  Therefore,  the  exemption  in  Article  4(1)(e)  relating  to 
employee shares schemes should be widened in order to cover the employee shares schemes 
of companies that are not listed on a regulated market.  

5.3.6.  Articles 5(2), 6(2) and 7  

The summary of the prospectus is in practice a key source of information for retail investors 
in their investment decisions. Therefore, it should be short, simple and comprehensible to the 
targeted investors. It should focus on the key information and it should not be restricted to any 
predetermined number of words. Moreover, the content of the summary should be determined 
in a way that ensures comparability with other investment products that are comparable to the 
investment proposal described in the prospectus. A more substantial summary document will 
strike  a  better  balance  between  the  need  for  investor  protection  and  the  need  for 
comprehensibility  for  retail  investors  and  it  will  help  targeted  retail  investors  to  make 
informed investment decisions. A logical consequence of having a more substantial summary 

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document is to attach civil liability on the basis of the summary not only if it is misleading, 
inaccurate or inconsistent, when read together with the other parts of the prospectus, but also 
if  it  does  not  provide  key  information  enabling  investors  to  take  informed  investment 
decisions and to compare the securities with other investment products. 

The  cost  of  producing  a  full  prospectus  might  not  be  justified  in  the  case  of  rights  issues 
because existing shareholders have already made the initial decision to invest in the company 
and they should be familiar with it. Moreover, according to some industry stakeholders, the 
disclosure  requirements  of  the  Directive  might  be  overly  burdensome  and  costly  also  for 
companies  with  smaller  market  capitalization  in  the  case  of  offers  of  or  above  EUR  2  500 
000, and for small credit institutions in the case of offers of non-equity securities referred to in 
Article 1(2)(j) of or above EUR 50 000 000. These stakeholders stress that, in practice, these 
thresholds would be too low and would create difficulties for these issuers raising funds in the 
EU.  However,  consumer  experts  have  emphasised  that  the  creation  of  a  "mini"  prospectus, 
which might correspond better to the needs and size of small firms, should first guarantee the 
same  level  of  investor  protection  regardless  of  the  size  of  the  issuer.  Therefore,  in  order  to 
improve the efficiency of cross border right issues and to adapt the information to the size of 
issuers, notably credit institutions issuing the securities mentioned in Article 1(2)(j) within or 
above the threshold therein and companies with reduced market capitalization, a proportionate 
disclosure regime should be introduced in the Directive for such offers, while maintaining a 
high level of investor protection.  

5.3.7.  Article 8  

According  to  Article  1(2)(d)  of  the  Directive,  the  Directive  does  not  apply  to  securities 
unconditionally  and  irrevocably  guaranteed  by  a  Member  State.  However,  according  to 
Article  1(3)  of  the  Directive,  an  issuer  whose  securities  are  guaranteed  by  a  Member  State 
shall  be  entitled  to  opt  in  drawing  up  a  prospectus  and  thus  benefiting  from  the  passport 
mechanism in order to make a cross-border offer in the Community. In this case, Article 5.1 
of the Directive provides that the prospectus has to include information about the issuer, the 
securities and the guarantor of the offer. In accordance with the Annex VI of the Prospectus 
Regulation11,  when  an  offer  of  securities  is  guaranteed  by  a  third  party,  the  issuer  has  to 
disclose in the prospectus information about the nature and scope of the guarantee and about 
the guarantor. In particular, the "guarantor must disclose information about itself as if it were 
the issuer of that same type of security that is the subject of the guarantee". Therefore, in the 
case of securities guaranteed by a Member State, in order to benefit of the passport regime, 
the issuer shall disclose information about the guarantor according to Annexes VI and XVI of 
the Prospectus Regulation. However, as Member States publish abundant information on their 
financial  situation  and  this  is  in  general  available  to  the  public,  there  is  no  added  value  for 
investors  in  requiring  the  issuer  to  disclose  in  the  prospectus  information  about  Member 
States,  as  guarantors,  according  to  Annexes  VI  and  XVI  of  the  Prospectus  Regulation. 
Therefore, issuers of securities guaranteed by a Member State, when drawing up a prospectus 
according  to  Article  1(3)  of  the  Directive,  shall  be  entitled  to  omit  information  about  such 
guarantors.  

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Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the 
European Parliament and of the Council as regards information contained in prospectuses as well as the 
format,  incorporation  by  reference  and  publication  of  such  prospectuses  and  dissemination  of 
advertisements. OJ L 149, 30.4.2004, p.1.  

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5.3.8.  Article 9 and 14(4)  

According  to  Article  9  of  the  Directive,  a  prospectus,  a  base  prospectus  and  a  registration 
document shall be valid for a period up to 12 months. As these documents can currently be 
supplemented  according  to  Article  16  of  the  Directive  or  currently  updated  according  to 
Article 12 of the Directive, there is no risk that they become outdated. Therefore, given the 
time and costs of drafting and approving a prospectus, the validity period of 12 months of a 
prospectus, a base prospectus and a registration document should be extended to 24 months 
provided they are properly supplemented. Article 14(4) should be modified accordingly. 

5.3.9.  Articles 10, 11(1) and 12(2)  

As  a  consequence  of  the  entry  into  force  of  Directive  2004/109/EC  of  the  European 
Parliament  and  of  the  Council  of  15  December  2004  on  the  harmonisation  of  transparency 
requirements in relation to information about issuers whose securities are admitted to trading 
on a regulated market and amending Directive 2001/34/EC12, the obligation for the issuer in 
Article  10  of  the  Directive  to  provide  annually  a  document  containing  or  referring  to  all 
information published in the 12 months preceding the issuance of the prospectus has become 
a mere duplication and therefore should be repealed. Article 11(1) of the Directive and Article 
2(1)(i)(i)  of  Directive  2004/109/EC  should  be  amended  accordingly  inasmuch  they  make 
reference to Article 10. Moreover, the registration document, which can currently be updated 
according  to  Articles  10(1)  and  12(2),  should  only  be  supplemented  in  accordance  with  the 
normal  procedure  to  supplement  a  prospectus  in  Article  16  of  the  Directive.  Indeed,  the 
registration  document  contains  information  on  the  issuer.  Therefore,  it  should  no  longer  be 
updated according to Article 12(2) i.e. by securities note, which instead contains information 
on the securities.  

5.3.10.  Article 16  

The  current  wording  of  Article  16(1)  of  the  Directive  creates  a  considerable  degree  of 
uncertainty  as  to  when  the  requirement  to  publish  a  prospectus  ends  in  cases  where  the 
securities  are  to  be  admitted  to  trading  on  a  regulated  market.  The  relationship  between  the 
"final  closing  of  the  offer  to  the  public"  and  "the  time  when  trading  on  regulated  market 
begins" should be clarified as to whether the requirement to publish a prospectus ends with 
the start of trading of the securities on a regulated market irrespective of whether the offering 
period  has  finally  closed.  Indeed,  the  subscription  period  generally  expires  prior  to  the 
admission of securities to trading, and investors should not be entitled to a right of withdrawal 
pursuant to Article 16(2) of the Directive if the offer has already closed. Therefore, in order to 
clarify whether the requirement to publish a prospectus ends with the start of trading of the 
securities  on  a  regulated  market  irrespective  of  whether  the  offer  to  the  public  has  finally 
closed, the obligation to supplement a prospectus should be terminated at the final closing of 
the offering period or the time when trading of such securities on a regulated market begins, 
whichever occurs earlier.  

In addition, every time a prospectus is supplemented in the course of an offer, Article 16(2) of 
the Directive grants investors a right of withdrawal of their previous acceptances. Such right 
can  be  exercised  during  a  period  no  shorter  than  two  days  following  the  publication  of  the 
supplement.  As  the  time  frame  for  the  exercise  of  such  right  is  not  harmonised,  Member 

12 

OJ L 390, 31.12.2004, p. 38. 

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States have set different periods through national implementing legislation and, in the case of 
a cross-border offer, it is unclear whether the time frame set out in the national legislation of 
the home Member State of the issuer should apply or those stemming from the legislation of 
each of the Member States where the offer or admission to trading takes place. This lack of 
common  time  frame  increases  the  costs  of  legal  advice.  Therefore,  when  a  prospectus  is 
supplemented,  the  harmonization  at  Community  level  of  the  time  frame  for  the  exercise  by 
investors of the right of withdrawal of their previous acceptances would provide certainty to 
issuers  making  cross  border  offers  of  securities.  To  provide  flexibility  to  issuers  from 
countries with traditionally a longer time frame, the issuer, the offeror or the person asking for 
the admission to trading on a regulated market should be able to extend voluntarily the term 
for the exercise of this right.  

5.3.11.  Article 18  

According to Article 18 of the Directive, the competent authority of the home Member State 
shall  notify  the  host  competent  authorities  the  certificate  of  approval  attesting  that  the 
prospectus  has  been  drawn  up  in  accordance  with  the  Prospectus  Directive.  However,  in 
practice,  uncertainty  has  arisen  for  the  issuers  as  to  whether  and  when  a  notification  has 
actually  been  effected.  Therefore  the  notification  procedure  of  Article  18  of  the  Directive 
should  be  amended  so  that  the  competent  authority  of  the  home  Member  State  shall  at  the 
same time notify also the issuer or the person responsible for drawing up the prospectus of the 
certificate of approval in addition to the competent authority of the host Member State. This 
will  reduce  costs  and  risks  for  the  issuer  or  the  person  responsible  for  drawing  up  the 
prospectus  who  will  have  certainty  that  it  has  not  inadvertently  contravened  the  law  by 
offering securities to the public in a Member State where the passport is not yet effective due 
to an oversight or error on the part of competent authority of the home Member State.  

6. 

BUDGETARY IMPLICATION  

The proposal has no implication for the Community budget. 

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2009/0132 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directives 2003/71/EC on the prospectus to be published when securities are 
offered to the public or admitted to trading and 2004/109/EC on the harmonisation of 
transparency requirements in relation to information about issuers whose securities are 
admitted to trading on a regulated market  

(Text with EEA relevance)  

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,  

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

Having regard to the proposal from the Commission13,  

Having regard to the opinion of the European Economic and Social Committee14,  

Having regard to the opinion of the European Central Bank15,  

Acting in accordance with the procedure laid down in Article 251 of the Treaty16,  

Whereas:  

(1) 

(2) 

(3) 

The  European  Council  agreed,  at  its  meeting  on  8  and  9  March  2007,  that 
administrative burdens on companies should be reduced by 25% by the year 2012 in 
order to enhance the competitiveness of companies in the Community.  

Directive 2003/71/EC of the European Parliament and of the Council of 4 November 
2003  on  the  prospectus  to  be  published  when  securities  are  offered  to  the  public  or 
admitted to  trading and amending Directive  2001/34/EC17 has been identified  by  the 
Commission  as  one  piece  of  legislation  that  contains  a  number  obligations  for 
companies, some of which seem burdensome.  

Those  obligations  need  to  be  reviewed  in  order  to  reduce  the  burdens  weighing  on 
companies  within  the  Community  to  the  necessary  minimum  without  compromising 
the protection of investors and the proper functioning of the securities markets in the 
Community.  

13 
14 
15 
16 
17 

OJ C , , p. .  
OJ C , , p. .  
OJ C , , p. .  
OJ C , , p. .  
OJ L 345, 31.12.2003, p. 64.  

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(4) 

(5) 

(6) 

(7) 

(8) 

Directive  2003/71/EC  requires  the  Commission  to  make  an  assessment  of  the 
application of that Directive five years after the date of entry into force and to present, 
where appropriate, proposals for its review. That assessment has revealed that certain 
elements  of  Directive  2003/71/EC  should  be  modified  in  order  to  simplify  and 
improve  its  application,  increase  its  efficiency  and  enhance  the  international 
competitiveness  of  the  Community,  contributing  to  the  reduction  of  administrative 
burdens.  

The  way  limits  of  maximum  offering  amounts  are  calculated  in  the  Directive 
2003/71/EC  should  be  clarified  for  reasons  of  certainty  and  efficiency.  The  total 
consideration for certain offers referred to in that Directive should be computed on a 
Community wide basis.  

For  the  purposes  of  private  placements  of  securities,  investment  firms  and  credit 
institutions  should  be  entitled  to  treat  as  qualified  investors  those  natural  or  legal 
persons that are considered to be or that they treat as professional clients, or that are 
recognized  eligible  counterparties  in  accordance  with  Directive  2004/39/EC  of  the 
European  Parliament  and  of  the  Council  of  21  April  2004  on  markets  in  financial 
instruments  amending  Council  Directives  85/611/EEC  and  93/6/EEC  and  Directive 
2000/12/EC  of  the  European  Parliament  and  of  the  Council  and  repealing  Council 
Directive  93/22/EEC18.  An  alignment  of  the  relevant  provisions  of  Directives 
2003/71/EC  and  2004/39/EC  in  this  sense  would  reduce  complexity  and  costs  for 
investment firms in the event of private placements because the firms would be able to 
define the persons to whom the placement is to be addressed relying on their own list 
of  professional  clients  and  eligible  counterparties.  Therefore,  the  definition  of 
qualified  investors  in  Directive  2003/71/EC  should  be  widened  to  include  those 
persons.  

In  order  to  increase  the  efficiency  and  flexibility  of  the  issuance  of  debt  in  the 
Community, the limitation on the determination of the home Member State for issues 
of  non-equity  securities  with  a  denomination  below  EUR  1.000  should  be  removed. 
The  mechanism  for  the  determination  of  the  home  and  the  host  Member  States  in 
Directive 2004/109/EC should also be amended accordingly.  

A valid prospectus, drawn up by the issuer or the offeror and available to the public at 
the time of the final placement of securities through financial intermediaries or in any 
subsequent  resale  of  securities,  provides  sufficient  information  for  investors  to  make 
informed  investment  decisions.  Therefore,  financial  intermediaries  placing  or 
subsequently  reselling  the  securities  should  be  entitled  to  rely  upon  the  initial 
prospectus  published  by  the  issuer  or  the  offeror  as  long  as  this  is  valid  and  duly 
supplemented  in  accordance  with  Article  9  and  Article  16  of  Directive  2003/71/EC 
and the issuer or the offeror responsible for drawing up such prospectus consents to its 
use. In this case no other prospectus should be required. However, in case the issuer or 
the offeror responsible for drawing up such initial prospectus  does not consent to its 
use, the financial intermediary should be required to publish a new prospectus.  

(9) 

The  requirement  to  produce  a  prospectus  for  offers  made  in  the  context  of  an 
employee  share  scheme  is  not  an  effective  means  of  informing  employees  about  the 

18 

OJ L 145, 30.4.2004, p. 1.  

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12 

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risks and benefits of that very particular kind of offer, and imposes excessive costs on 
employers that are not justified in terms of investor protection. Non-listed companies 
and  companies  listed  in  markets  other  than  regulated  markets  in  the  Community 
should therefore be exempted from the obligation to produce a prospectus under those 
circumstances.  

(10)  The summary of the prospectus is a key source of information for retail investors. It 
should be short, simple and easy for targeted investors to understand. It should focus 
on  the  key  information  that  investors  need  in  order  to  be  able  to  make  informed 
investment decisions. Its content should not be restricted to any predetermined number 
of words. The format and content of the summary should be determined in a way that 
ensures  comparability  with  other  investment  products  that  are  similar  to  the 
investment  proposal  described  in  the  prospectus.  Therefore,  Member  States  should 
attach civil liability on the basis of the summary not only if it is misleading, inaccurate 
or inconsistent, when read together with the other parts of the prospectus, but also if it 
does  not  provide  key  information  enabling  investors  to  take  informed  investment 
decisions and to compare the securities with other investment products. 

(11) 

In order to improve the efficiency of cross border right issues and to adequately take 
into  account  the  size  of  issuers,  notably  credit  institutions  issuing  the  securities 
mentioned in Article 1(2)(j) of Directive 2003/71/EC at or above the limit laid down in 
that  Article  and  companies  with  reduced  market  capitalization,  a  proportionate 
disclosure  regime  should  be  introduced  for  rights  issues  and  for  offers  of  shares  of 
issuers with reduced market capitalization and offers of non-equity securities referred 
to in Article 1(2)(j) of Directive 2003/71/EC issued by credit institutions at or above 
the limit laid down in that Article.  

(12)  Member  States  publish  abundant  information  on  their  financial  situation  which  is  in 
general  available  in  the  public  domain.  Therefore,  in  case  a  Member  State  in  the 
Community  guarantees  an  offer  of  securities,  the  issuer  should  not  be  obliged  to 
provide in the prospectus information about that Member State acting as guarantor.  

(13)  As  the  prospectus  can  be  updated  by  way  of  supplements  according  to  Directive 
2003/71/EC,  there  is  no  risk  that  it  may  become  outdated.  Therefore,  given  the  time 
and costs of drafting and approving a prospectus, the validity period of 12 months of 
the  prospectus,  base  prospectus  and  registration  document  should  be  extended  to  24 
months provided they are properly supplemented.  

(14)  As  a  consequence  of  the  entry  into  force  of  Directive  2004/109/EC  of  the  European 
Parliament  and  of  the  Council  of  15  December  2004  on  the  harmonisation  of 
transparency requirements in relation to information about issuers whose securities are 
admitted to trading on a regulated market and amending Directive 2001/34/EC19, the 
obligation  in  Directive  2003/71/EC  for  the  issuer  to  provide  annually  a  document 
containing or referring to all information published in the twelve months preceding the 
issuance  of  the  prospectus  has  become  a  dual  obligation  and  should  therefore  be 
abolished.  As  a  consequence,  a  registration  document,  instead  of  being  updated  in 
accordance  with  Article  10,  should  be  supplemented  in  accordance  with  the  normal 
procedure to supplement prospectuses.  

19 

OJ L 390, 31.12.2004, p. 38.  

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(15) 

In order to clarify whether the requirement to publish a supplement to the prospectus 
ends  with  the  start  of  trading  of  the  securities  on  a  regulated  market  irrespective  of 
whether  the  offering  period  has  closed,  the  obligation  to  supplement  a  prospectus 
should  be  terminated  at  the  final  closing  of  the  offering  period  or  the  time  when 
trading of such securities on a regulated market begins, whichever occurs earlier.  

(16)  When the prospectus is supplemented, harmonization at Community level of the time 
frame  for  the  exercise  by  investors  of  the  right  of  withdrawal  of  their  previous 
acceptances  would  provide  certainty  to  issuers  making  cross  border  offers  of 
securities.  To  provide  flexibility  to  issuers  from  Member  States  with  traditionally 
longer  time  frame  in  this  regard,  the  issuer,  the  offeror  or  the  person  asking  for  the 
admission  to  trading  on  a  regulated  market  should  be  able  to  extend  voluntarily  the 
term for the exercise of that right.  

(17)  The  authority  responsible  for  the  approval  of  the  prospectus  should  also  notify  the 
issuer  or  the  person  responsible  for  drawing  up  the  prospectus  of  the  certificate  of 
approval of the prospectus that is addressed to the authorities of host Member States in 
accordance  with  Directive  2003/71/EC  in  order  to  provide  the  issuer  or  the  person 
responsible  for  drawing  up  the  prospectus  with  certainty  as  to  whether  and  when  a 
notification has actually been effected.  

(18)  The measures necessary for the implementation of this Directive should be adopted in 
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the 
procedures for the exercise of implementing powers conferred on the Commission20.  

(19) 

In  particular,  in  order  to  take  account  of  the  technical  developments  in  the  financial 
markets and to ensure uniform application of Directive 2003/71/EC, the Commission 
should be empowered to adopt implementing measures to update the limits established 
in that Directive. Since those measures are of general scope and are designed to amend 
non-essential  elements  of  Directive  2003/71/EC  by  supplementing  it  with  new  non-
essential elements, they must be adopted in accordance with the regulatory procedure 
with scrutiny provided for in Article 5a of Decision 1999/468/EC.  

(20)  Since the objectives of this Directive, namely reducing administrative burdens relating 
to the publication of a prospectus in the case of offers of securities to the public and 
admission  to  trading  in  regulated  markets  within  the  Community,  cannot  be 
sufficiently achieved by Member States and can therefore, by reason of the scale and 
effects, be better achieved at Community level, the Community may adopt measures in 
accordance  with the principle of subsidiarity as set out in Article 5 of  the Treaty. In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Directive does not go beyond what is necessary in order to achieve those objectives. 

(21)  Directive  2003/71/EC  and  Directive  2004/109  should 

therefore  be  amended 

accordingly, 

20 

OJ L 184, 17.7.1999, p. 23.  

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HAVE ADOPTED THIS DIRECTIVE:  

Article 1  

Amendments to Directive 2003/71/EC  

Directive 2003/71/EC is amended as follows:  

1. 

(a) 

Article 1 is amended as follows:  

Paragraph 2 is amended as follows:  

(i) 

Point (h) is replaced by the following:  

"(h) securities included in an offer where the total consideration of the offer in 
the  Community  is  less  than  EUR  2  500  000,  which  limit  shall  be 
calculated over a period of 12 months;"  

(ii)  Point (j) is replaced by the following:  

"(j) non-equity securities issued in a continuous or repeated manner by credit 
institutions where the total consideration of the offer in the Community is 
less than EUR 50 000 000, which limit shall be calculated over a period 
of 12 months, provided that these securities:  

(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 instrument."  

(b) 

The following paragraph 4 is added:  

"4.  In  order  to  take  account  of  technical  developments  on  financial  markets  and  to 
the  Commission  shall  adopt 
this  Directive, 
ensure  uniform  application  of 
implementing measures concerning the adjustment of the limits referred to in points 
(h)  and  (j)  of  Article  1(2).  Those  measures,  designed  to  amend  non-essential 
elements of this Directive by supplementing it, shall be adopted in accordance with 
the  regulatory  procedure  with  scrutiny  provided  for  in  Article  5a  of  Decision 
1999/468/EC."  

2. 

(a) 

Article 2(1) is amended as follows:  

Point (e) is amended as follows:  

(i) 

Point (i) is replaced by the following:  

"(i) Persons or entities that are considered to be or treated on request as professional 
clients  in  accordance  with  Annex  II  to  Directive  2004/39/EC,  or  recognised  as 
eligible counterparties in accordance with Article 24 of Directive 2004/39/EC."  

(ii)  Points (ii) and (iii) are deleted.  

EN 

15 

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(b) 

In Point (m), point (ii) is replaced by the following:  

"(ii) for any issues of non-equity securities , 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 ;"  

Article 3 is amended as follows:  

In the first subparagraph of paragraph 2, point (e) is replaced by the following:  

"(e)  an offer of securities with a total consideration in the Community of less than 
EUR 100 000, which limit shall be calculated over a period of 12 months."  

3. 

(a) 

(b) 

In paragraph 2, the following subparagraph is added:  

"Member States shall not require another prospectus in any such subsequent resale of 
securities or final placement of securities through financial intermediaries as long as 
a  valid  prospectus  is  available  in  accordance  with  Article  9  and  the  issuer  or  the 
person responsible for drawing up such prospectus consents to its use." 

4. 

In Article 4(1), point (e) is replaced by the following: 

"(e)  securities  offered,  allotted  or  to  be  allotted  to  existing  or  former  directors  or 
employees  by  their  employer  or  by  an  affiliated  undertaking,  provided  that  a 
document is made available containing information on the number and nature of the 
securities and the reasons for and details of the offer." 

5. 

In Article 5(2), the first subparagraph is replaced by the following:  

"The prospectus shall contain information concerning the issuer and the securities to 
be offered to the public or to be admitted to trading on a regulated market. It shall 
also include a summary. The summary shall, in a brief manner and in non-technical 
language,  convey  the  essential  characteristics  and  risks  associated  with  the  issuer, 
any  guarantor  and  the  securities,  in  the  language  in  which  the  prospectus  was 
originally drawn up. The format and content of the summary of the prospectus shall 
provide  key  information  in  order  to  enable  investors  to  take  informed  investment 
decisions  and  to  compare  the  securities  with  other  investment  products.  The 
summary shall also contain a warning that:"  

6. 

In Article 6(2), the second subparagraph is replaced by the following:  

"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, inaccurate or inconsistent, when read together with the other parts of 
the  prospectus,  and  it  does  not  provide  key  information  enabling  investors  to  take 
informed  investment  decisions  and  to  compare  the  securities  with  other  investment 
products." 

7. 

(a) 

Article 7(2) is amended as follows:  

Point (e) is replaced by the following:  

EN 

16 

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"(e)  the  various  activities  and  size  of  the  issuer,  in  particular  credit  institutions 
issuing  non-equity-securities  referred  to  in  Article  1(2)(j)  at  or  above  the  limit  laid 
down in that Article, companies with reduced market capitalization and SMEs. For 
such companies the information shall be adapted to their size and, where appropriate, 
to their shorter track record;" 

(b) 

Point (g) is inserted:  

"(g)  a  proportionate  disclosure  regime  shall  apply  to  rights  issues  of  companies 
whose shares are admitted to trading on a regulated market." 

8. 

In Article 8, the following paragraph 3a is inserted after paragraph 3: 

"3a.  If securities are guaranteed by a Member State, an issuer, an offeror or a person 
asking  for  the  admission  to  trading  on  a  regulated  market,  when  drawing  up  a 
prospectus in accordance with Article 1.3, shall be entitled to omit information about 
such guarantors." 

9. 

(a) 

Article 9 is amended as follows:  

Paragraphs 1 and 2 are replaced by the following:  

"1.  A  prospectus  shall  be  valid  for  24  months  after  its  publication  for  offers  to  the 
public or admissions to trading on a regulated market, provided that the prospectus is 
completed by any supplements required pursuant to Article 16.  

2. In the case of an offering programme, the base prospectus, previously filed, shall 
be valid for a period of up to 24 months."  

(b) 

Paragraph 4 is replaced by the following:  

"4.  A  registration  document,  as  referred  to  in  Article  5(3),  previously  filed  and 
approved,  shall  be  valid  for  a  period  of  up  to  24  months  provided  that  it  has  been 
supplemented 
in  accordance  with  Article  16.  The  registration  document, 
supplemented  if  necessary  in  accordance  with  Article  16,  accompanied  by  the 
securities  note  and  the  summary  note  shall  be  considered  to  constitute  a  valid 
prospectus." 

10. 

11. 

Article 10 is deleted.  

Article 11(1) is replaced by the following:  

"1.  Member  States  shall  allow  information  to  be  incorporated  in  the  prospectus  by 
reference  to  one  or  more  previously  or  simultaneously  published  documents  that 
have been approved by the competent authority of the home Member State or filed 
with it in accordance with this Directive or Directive 2004/109/EC. This information 
shall  be  the  latest  available  to  the  issuer.  The  summary  shall  not  incorporate 
information by reference."  

12. 

Article 12(2) is replaced by the following:  

EN 

17 

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"2. In this case, the registration document shall be supplemented in accordance with 
Article 16. The securities and summary notes shall be subject to a separate approval." 

13. 

Article 14(4) is replaced by the following:  

"4. The competent authority of the home Member State shall publish on its website 
over a period of 24 months, at its choice, all the prospectuses approved, or at least the 
list of prospectuses approved in accordance with Article 13, including, if applicable, 
a hyperlink to the prospectus published on the website of the issuer, or on the website 
of the regulated market." 

14. 

Article 16 is replaced by the following:  

"Article 16 

Supplements to the prospectus  

1. 

2. 

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 final closing of the offer to the public or, as the case may be, the 
time  when  trading  on  a  regulated  market  begins,  whichever  occurs  earlier,  shall  be 
mentioned in a supplement to the prospectus. Such a supplement shall be approved in 
the  same  way  in  a  maximum  of  seven  working  days  and  published  in  accordance 
with  at  least  the  same  arrangements  as  were  applied  when  the  original  prospectus 
was  published.  The  summary,  and  any  translations  thereof,  shall  also  be 
supplemented, if necessary to take into account the new information included in the 
supplement.  

Investors who have already agreed to purchase or subscribe for the securities before 
the supplement is published shall have the right, exercisable within two working days 
after  the  publication  of  the  supplement,  to  withdraw  their  acceptances.  This  period 
may be extended by the issuer, the offeror or the person asking for the admission to 
trading on a regulated market."  

15. 

Article 18(1) is replaced by the following:  

"1.  The competent authority of the home Member State shall, at the request of the 
issuer  or  the  person  responsible  for  drawing  up  the  prospectus  and  within  three 
working days following that request or, if the request is submitted together with the 
draft prospectus, within one working day after the approval of the prospectus notify 
the  competent  authority  of  the  host  Member  State  with  a  certificate  of  approval 
attesting that the prospectus has been drawn up in accordance with this Directive and 
with  a  copy  of  the  said  prospectus.  If  applicable,  this  notification  shall  be 
accompanied  by  a  translation  of  the  summary  produced  under  the  responsibility  of 
the issuer or person responsible for drawing up the prospectus. The same procedure 
shall  be  followed  for  any  supplement  to  the  prospectus.  The  issuer  or  the  person 
responsible for drawing up the prospectus shall also be notified of the certificate of 
approval at the same time as the competent authority of the host Member State."  

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Article 2  

Amendment of Directive 2004/109/EC  

In Article 2(1)(i) of Directive 2004/109/EC, point (i) is replaced by the following:  

"(i) in the case of an issuer of shares:  

— where the issuer is incorporated in the Community, the Member State in which it 
has its registered office;  

— where the issuer is incorporated in a third country, the Member State referred to in 
point (iii) of Article 2(1)(m)of Directive 2003/71/EC."  

Article 3  

Transposition  

1 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive by [twelve months after the entry 
into  force  of  this  Directive]  at  the  latest.  They  shall  forthwith  communicate  to  the 
Commission  the  text  of  those  provisions  and  a  correlation  table  between  those 
provisions and this Directive.  

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made.  

2 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive.  

Article 4 

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 Union.  

Article 5 

Addressees  

This Directive is addressed to the Member States.  

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Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President  

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