EUROPEAN COMMISSION
Directorate General Financial Stability, Financial Services and Capital Markets Union
FINANCIAL MARKETS
Securities Markets

Brussels, 18 February 2015

CONSULTATION DOCUMENT
REVIEW OF THE PROSPECTUS DIRECTIVE
Disclaimer
This document is a working document of the Commission services for consultation and does
not prejudge the final form of any future decision to be taken by the Commission.
You are invited to comment on the views reflected in this paper. These views are only an
indication of the approach the Commission services may take and are not a final policy
position nor do they constitute a formal proposal by the European Commission.
The responses to this consultation will provide important guidance to the Commission when
preparing, if considered appropriate, a formal Commission proposal.
In replying to these questions, please indicate the expected impact described in each section
of this paper on your activities or the activities of firms in your jurisdiction, including estimates
of administrative or compliance costs. Please also state reasons for your answers and
provide, to the extent possible, evidence supporting your views.
If need be, files with additional information can be uploaded using the button at the end of the
consultation page. In order to assist in the evaluation of your contribution, we would
appreciate if you could maintain the structure of this questionnaire and indicate clearly the
question you are responding to in any additional material you might want to provide.
You are invited to reply to this online questionnaire by 13 May 2015 at the latest.
Responses will be published on the following website unless requested otherwise:
http://ec.europa.eu/finance/consultations/2015/prospectus-directive/index_en.htm.

1

Commission Services Consultation
In the following document, "the Directive" refers to Directive 2003/71/EC 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, as subsequently amended by Directive 2008/11/EC of 11 March
2008, by Directive 2010/73/EU of 24 November 2010, by Directive 2010/78/EU of 24 November 2010,
by Directive 2013/50/EU of 22 October 2013 and by Directive 2014/51/EU of 16 April 2014 (Omnibus
II). "Issuers" refers to issuers, offerors or persons asking for the admission to trading, as the case may
be. All references to "the proportionate disclosure regime" relate to the minimum disclosure
requirements set out in Articles 7(2)(e) and (g) of the Directive and Chapter IIIa of 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,
as subsequently amended (the "Implementing Regulation") and the corresponding Annexes. In the
context of this consultation "prospectus framework" means the legal framework created by the
Directive and the Implementing Regulation.

I. Introduction
The Prospectus Directive 2003/71/EC has applied since July 2005. The Directive, together
with its Implementing Regulation n°809/2004, lays down the rules governing the prospectus
that must be made available to the public when a company makes an offer or an admission
to trading of transferable securities on a regulated market in the EU. The prospectus contains
information about the offer, the issuer and the securities, and has to be approved by the
competent authority of a Member State before the beginning of the offer or the admission to
trading of the securities.
Two key objectives underpin the Directive:
•

Investor and consumer protection. A prospectus is a standardised document which, in
an easily analysable and comprehensible form, should contain all information which is
necessary to enable investors to make an informed assessment of the issuer and the
securities offered or admitted to trading on a regulated market.

•

Market efficiency. A prospectus aims at facilitating the widest possible access to capital
markets by companies across the EU. The Directive sought to achieve this through
requiring a common form and content of the prospectus and introducing an EU wide
passport: a prospectus approved by the competent authority of one Member State should
be valid for the entire Union without additional scrutiny by the authorities of other Member
States.

Following a review, the Directive was amended in November 2010 in the following areas: (i)
investor protection was strengthened by improving the quality and effectiveness of
disclosures and by facilitating comparison between products through the summary; (ii)
efficiency was increased by reducing administrative burdens for issuers through various
proportionate disclosure regimes (including for small and medium-sized enterprises (SMEs),
companies with reduced market capitalisation and rights issues), a recalibration of the
thresholds below which no prospectus is required and some further harmonisation of
technical details in certain areas (withdrawal rights).
The review of the Directive in the context of the Commission's action plan for a Capital
Markets Union
The prospectus is the gateway into capital markets for firms seeking funding, and most firms
seeking to issue debt or equity must produce one. It is crucial that it does not act as an
2

unnecessary barrier to the capital markets. It should be as straightforward as possible for
companies (including SMEs) to raise capital throughout the EU. The Commission is required
to assess the application of the Directive by 1 January 2016 but given the importance of
making progress towards a Capital Markets Union, has decided to bring the review forward.
The review will seek to ensure that a prospectus is required only when it is truly needed, that
the approval process is as smooth and efficient as possible, the information that must be
included in prospectuses is useful and not burdensome to produce and that barriers to
seeking funding across borders are reduced.
The review of the Prospectus Directive is featured in the Commission Work Programme for
2015, as part of the Regulatory Fitness and Performance Programme (REFIT)1.
Shortcomings of the Directive and objectives of the review
There are several potential shortcomings of the prospectus framework today. The process of
drawing up a prospectus and getting it approved by the national competent authority is often
perceived as expensive, complex and time-consuming, especially for SMEs and companies
with reduced market capitalisation. Member States have applied differently the flexibility in
the Directive to exempt offers of securities with a total value below EUR 5 000 000: the
requirement to produce a prospectus kicks in at different levels across the EU. There are
indications that prospectus approval procedures are in practice handled differently between
Member States. Prospectuses have become overly long documents, which has brought into
question the effectiveness of the Directive from an investor protection perspective.
The objective of the review of the Directive is to reform and reshape the current prospectus
regime in order to make it easier for companies to raise capital throughout the EU and to
lower the associated costs, while maintaining effective levels of consumer and investor
protection.
The Directive also needs to be updated to reflect market and regulatory developments
including the development of multilateral trading facilities (MTFs), creation of SME growth
markets and organised trading facilities (OTFs), and the introduction of key information
documents for packaged retail and insurance-based investment products (PRIIPs) under
Regulation (EU) No 1286/2014.
This public consultation seeks to identify the needs of market users with regard to
prospectuses concerning scope, form, content, comparability, the approval process, liability
and sanctions. In addition, interested parties should provide feedback about the aspects
which unduly hinder access to capital markets for issuers, and which, if amended, could
reduce administrative burden without undermining investor protection.
Questions:
(1) Is the principle, whereby a prospectus is required whenever securities are admitted
to trading on a regulated market or offered to the public, still valid? In principle,
should a prospectus be necessary for:
- admission to trading on a regulated market
- an offer of securities to the public?

1

See http://ec.europa.eu/atwork/pdf/cwp_2015_refit_actions_en.pdf.

3

Should a different treatment should be granted to the two purposes (i.e. different types
of prospectus for an admission to trading and an offer to the public). If yes, please
give details.
(2) In order to better understand the costs implied by the prospectus regime for
issuers:
a) Please estimate the cost of producing the following prospectus
- equity prospectus
- non-equity prospectus
- base prospectus
- initial public offer (IPO) prospectus
b) What is the share, in per cent, of the following in the total costs of a prospectus:
- Issuer's internal costs: [enter figure]%
- Audit costs: [enter figure]%
- Legal fees: [enter figure]%
- Competent authorities' fees: [enter figure]%
- Other costs (please specify which): [enter figure]%
What fraction of the costs indicated above would be incurred by an issuer anyway,
when offering securities to the public or having them admitted to trading on a
regulated market, even if there were no prospectus requirements, under both EU and
national law?
(3) Bearing in mind that the prospectus, once approved by the home competent
authority, enables an issuer to raise financing across all EU capital markets
simultaneously, are the additional costs of preparing a prospectus in conformity with
EU rules and getting it approved by the competent authority are outweighed by the
benefit of the passport attached to it?

II. ISSUES FOR DISCUSSION
The current prospectus framework provides issuers with several tools initially intended to
make the procedure of drawing up prospectuses more flexible and to lower the associated
costs (proportionate disclosure regime, incorporation by reference, base prospectus, tripartite
prospectus). However, the prospectus framework is seen today by some as burdensome and
not effective at facilitating access to capital markets, in particular for SMEs and companies
with lower market capitalisation.
These fundamental aspects of the Directive under review are grouped under the following
headings:
-

A. When a prospectus is needed: the scope of the requirement to prepare a
prospectus;

-

B. What information a prospectus should contain: the contents of a prospectus and
the responsibility attaching to it;

-

C. How prospectuses are approved: the role of national competent authorities in the
approval process of prospectuses, the equivalence of third-country prospectus regimes.

When a prospectus is needed
4

This consultation requests respondents' views on a possible recalibration of the obligation for
issuers to draw up a prospectus, based on the existing exemption thresholds, as well as the
favourable treatment granted to debt issuers using high denominations per unit. Views are
also welcome on whether a prospectus should be required for secondary issuances and for
the admission of securities to trading on MTFs.
What information prospectuses should contain
The consultation seeks feedback on ways to expand the existing tools that were intended to
introduce some flexibility in the drawing up of a prospectus and enhance their effectiveness
to the benefit of issuers, striking an appropriate balance between effective investor protection
and the alleviation of administrative burden. The consultation also suggests ways to
introduce more flexibility in the process of raising capital by clarifying the relationship in the
prospectus approval process with the marketing phase.
To avoid the tendency towards lengthier prospectuses and return to the original purpose of a
prospectus (providing investors with easily analysable and comprehensible information
necessary for an informed assessment of an issuer and its securities), views are sought on
the usefulness of the prospectus summary, as well as on possible limitations which could be
introduced on prospectuses. As the length of a prospectus is to a certain extent linked to the
liability incurred by those who prepare it, the question of the liability regime is raised, as well
as the sanctions regime.
Finally this paper invites comments on certain issues already addressed in the amending
Directive 2010/73/EU – e.g. the prospectus exemption for employee share schemes, the
determination of the home Member State for issues of non-equity securities, the clarification
of legal concepts - with a view to ensuring that the amendments introduced have achieved
their objectives.
A. When a prospectus is needed
A.1. Adjusting the current exemption thresholds
The scope of the Directive is currently determined by a number of quantitative thresholds
which exempt certain types of public offers from the prospectus requirement. Given recent
developments in financial markets, such as investment-based crowdfunding, these
thresholds as well as the non-harmonised area of offers below EUR 5 000 000, need to be
reassessed. The thresholds concern small offers, offers of debt securities by small credit
institutions, offers targeting a very limited number of retail investors and offers where the
denomination per unit of the securities or the minimum "entry ticket" are so high that they
would not normally be accessible to retail investors. These thresholds are:
•

EUR 5 000 000: any offer of securities with a total consideration in the EU below this
amount falls outside the scope of the Directive (Article 1(2)(h)). Member States are
free to have national rules in place that impose disclosure requirements (wholly or
partly inspired from, if not analogous to, a prospectus under the Directive) to such
offers.

•

EUR 75 000 000: any offer or admission to trading of non-equity securities, issued in
a continuous or repeated manner by credit institutions, with a total consideration in
the EU below this amount falls outside the scope of the Directive (Article 1(2)(j)). This
provision essentially relates to small credit institutions issuing (non-hybrid) bonds,
debentures or notes.
5

•

150 persons: any offer of securities addressed to a number of natural or legal
persons per Member State below this number, other than qualified investors is
exempted from the requirement to produce a prospectus (Article 3(2)(b)). Offers
which are addressed solely to qualified investors (i.e. "professional investors" under
MIFID) are also exempted (Article 3(2)(a)).

•

EUR 100 000: any offer of securities whose denomination per unit is equal or above
this value, or where investors are subject to a minimum individual investment equal
or above this value, is exempted from the requirement to produce a prospectus
(Article 3(2)(c) & (d)).

These thresholds were raised significantly by Directive 2010/73/EC (from respectively EUR
2 500 000, EUR 50 000 000, 100 persons and EUR 50 000). Stakeholders' views would be
helpful to assess whether the thresholds are still appropriate today or if any further
quantitative adjustment would be desirable and if more harmonisation is required, bearing in
mind that Member States are currently free to implement national regimes for offers with a
total consideration below EUR 5 000 000. This is particularly relevant in the context of
investment-based crowdfunding, the development of which might be discouraged in those
Member States where the prospectus requirement applies below the EUR 5 000 000
threshold.
Furthermore, the Directive applies only to ‘securities’ as defined in Article 2(1)(a).2 Thus,
securities which do not fall into that definition are subject to either no or national, nonharmonised prospectus requirements.
Questions
(4) The exemption thresholds in Articles 1(2)(h) and (j), 3(2)(b), (c) and (d),
respectively, were initially designed to strike an appropriate balance between investor
protection and alleviating the administrative burden on small issuers and small offers.
Should these thresholds be adjusted again so that a larger number of offers can be
carried out without a prospectus? If yes, to which levels? Please provide reasoning for
your answer.
a) the EUR 5 000 000 threshold of Article 1(2)(h):
- Yes, from EUR 5 000 000 to EUR [enter monetary figure]
- No
- Don't know/no opinion
Textbox: [ justification ]
b) the EUR 75 000 000 threshold of Article 1(2)(j):
- Yes, from EUR 75 000 000 to EUR [enter monetary figure]
- No
- Don't know/no opinion
Textbox: [ justification ]
c) the 150 persons threshold of Article 3(2)(b)
- Yes, from 150 persons to [enter figure] persons
- No;
2

Transferable securities as defined by MIFID with the exception of money market instruments having a
maturity of less than 12 months. For these instruments national legislation may be applicable.

6

- Don't know/no opinion
Textbox: [ justification ]
d) the EUR 100 000 threshold of Article 3(2)(c) & (d)
- Yes, from EUR 100 000 to EUR [enter monetary figure]
- No
- Don't know/no opinion
Textbox: [ justification ]
(5) Would more harmonisation be beneficial in areas currently left to Member States
discretion, such as the flexibility given to Member States to require a prospectus for
offers of securities with a total consideration below EUR 5 000 000?
Yes
No
Other areas:
Don't know/no opinion
Textbox: [ justification ]
(6) Do you see a need for including a wider range of securities in the scope of the
Directive than transferable securities as defined in Article 2(1)(a)? Please state your
reasons.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(7) Can you identify any other area where the scope of the Directive should be revised
and if so how? Could other types of offers and admissions to trading be carried out
without a prospectus without reducing consumer protection?
Yes [text box]
No
Other areas:
Don't know/no opinion
Textbox: [ justification ]
A.2. Creating an exemption for "secondary issuances" under certain conditions
A company which already has a class of securities admitted to trading on a regulated market
is known to the market through the prospectus it prepared and got approved on that
occasion. Until now, a proportionate disclosure regime exists only for ‘rights issues’, i.e. any
issue of statutory pre-emption rights which allow for the subscription of new shares and is
addressed only to existing shareholders, but there is no alleviation of prospectus
requirements for secondary issuances in general.
It may be argued that there is less of a need to require a prospectus for secondary
issuances, because, once the class of securities is admitted to trading on a regulated market,
the disclosure regimes under Regulation (EU) 596/2014 (Market Abuse Regulation, "MAR")
and Directive 2004/109/EC (Transparency Directive, "TD") provide the necessary information
for purchasers.
On that basis, a range of options could be envisaged to alleviate the prospectus burden for
subsequent admissions to trading or offers of the same class of fungible securities. These
could include:
- raising the exemption for secondary issues of Article 4(2)(a) from 10% to at least 20%;
7

-

granting a prospectus exemption to rights issues (i.e. cases where the issuer has not
disapplied the statutory pre-emptive rights);
granting a prospectus exemption to any secondary admission to trading or public offers of
securities that are fungible with securities already listed, for which a prospectus has been
approved within a certain time frame (e.g. 3 years).

In the case of MTFs, where the admission of securities to trading is not currently subject to a
prospectus, a similar kind of exemption could be devised to target offers to the public of a
class of securities which has already been offered to the public over a certain period of time
to be defined (e.g. 3 years). Since the Transparency Directive does not apply to MTFs, this
exemption may need to be conditional on the existence of appropriate market rules regarding
periodic financial reporting by issuers.
Questions
(8) Do you agree that while an initial public offer of securities requires a full-blown
prospectus, the obligation to draw up a prospectus could be mitigated or lifted for any
subsequent secondary issuances of the same securities, providing relevant
information updates are made available by the issuer?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(9) How should Article 4(2)(a) be amended in order to achieve this objective ? Please
state your reasons.
The 10% threshold should be raised to [enter figure]%
The exemption should apply to all secondary issuances of fungible securities,
regardless of their proportion with respect to those already issued
No amendment
Don't know/no opinion
Textbox: [ justification ]
(10) If the exemption for secondary issuances were to be made conditional to a fullblown prospectus having been approved within a certain period of time, which
timeframe would be appropriate?
[ ] years
There should be no timeframe (i.e. the exemption should still apply if a prospectus
was approved ten years ago)
Don't know/no opinion
Textbox: [ justification ]
A.3. Extending the prospectus to admission to trading on an MTF
The requirement for establishing a prospectus applies to admission of securities to trading on
a regulated market and to offers of securities to the public. However, admissions to trading
on MTFs are not covered by the Directive and therefore no level playing field exists between
the different MTFs within the EU. The current principle of requiring a prospectus only for
public offers and admissions to regulated markets was first set out in Directive 2003/71/EC at
a time when the concept of MTF did not exist yet, as Directive 2004/39/EC (MIFID) was only
finalised one year later.
Today there are more than 150 registered MTF operating in the EU. Some of these MTF
which focus on small and medium-sized companies may in the future adopt the label 'SME
8

growth markets" recently created under MIFID II (Directive 2014/65/EU). Companies whose
securities are traded on such MTFs are currently required to produce a prospectus where
they offer securities to the public, unless an exemption applies. On the contrary, no
prospectus is required for the mere admission to trading of securities on these MTF, unlike
for admissions to trading on regulated markets. In practice, companies seeking admission of
their securities to trading on a MTF will usually produce an admission document or offering
circular, pursuant to the specific market rules of the MTF at the national level. Thus, no level
playing field exists across the EU and issuers may face different levels of disclosure
requirements depending on the MTF where the admission to trading of their securities is
sought.
Disclosure rules applying to MTFs are more flexible than rules applying to regulated markets,
however some benefit may exist in harmonising the disclosure requirements for admissions
to trading of securities on an MTF (including SME growth markets) across the EU. This could
be achieved by extending the scope of the Directive to such markets, while granting the
corresponding prospectuses the benefit of using the proportionate disclosure regime (if
necessary, with revised, less onerous minimum requirements). Such a harmonisation would
be coherent with recent developments of MAR and MIFID II which brought MTFs into scope
alongside regulated markets.
Questions:
(11) Do you think that a prospectus should be required when securities are admitted to
trading on an MTF? Please state your reasons.
Yes, on all MTFs
Yes, but only on those MTFs registered as SME growth markets
No
Don't know/no opinion
Textbox: [ justification ]
(12) Were the scope of the Directive extended to the admission of securities to trading
on MTFs, do you think that the proportionate disclosure regime (either amended or
unamended) should apply? Please state your reasons.
Yes, the amended regime should apply to all MTFs
Yes, the unamended regime should apply to all MTFs
Yes, the amended regime should apply but not to those MTFs registered as SME
growth markets
Yes, the unamended regime should apply but not to those MTFs registered as SME
growth markets
Yes, the amended regime should apply but only to those MTFs registered as SME
growth markets
Yes, the unamended regime should apply but only to those MTFs registered as
SME growth markets
No
Don't know/no opinion
Textbox: [ justification ]

A.4. Exemption of prospectus for certain types of closed-ended alternative investment funds
(AIFs)
At present, multiple layers of disclosure requirements for certain types of closed-ended
alternative investment funds may create overlaps in the information to be disclosed to
investors.
9

The current Directive provides that units of open-ended collective investment schemes are
out of its scope, and that offers of securities addressed solely to qualified investors (i.e.
professional investors as defined under MIFID) are exempted from the obligation to draw up
a prospectus. It follows that units or shares of closed-ended collective investment schemes,
to the extent that they are considered as transferable securities, may be within the scope and
required to have a prospectus approved if they are offered to more than 150 persons per
Member State other than qualified investors. This may be the case in particular for European
venture capital funds (EuVECA) or European social entrepreneurship funds (EuSEF) to the
extent that they are of the closed-ended type and sold to the so-called "high-net-worth
individuals" (as defined under Article 6(1) of both corresponding Regulations)3.
In the case of the future European long term investment funds (ELTIF), the Regulation
establishing them, for which a political agreement was found in November 2014, imposes a
prospectus to be drawn up for all ELTIFs, including where those are structured as investment
funds of the closed-ended type.
There might be therefore instances in which these alternative investment funds (AIFs) would
have to comply cumulatively with the requirements to (i) publish a prospectus (the minimum
content of which is set out in Annex I and XV of the Implementing Regulation), (ii) draw up a
key information document (KID) pursuant to the PRIIPS Regulation and (iii) disclose to
investors the information listed in the relevant sectorial legislation (Art. 13 of the EuVECA
Regulation, Art. 14 of the EuSEF Regulation, Art. 23 of AIFMD). Despite the fact that these
funds are sometimes allowed not to disclose a second time the information that is already
featured in the prospectus, these multiple layers of disclosure requirements may create
overlaps between the various information to be disclosed to investors under each of them
e.g. investment strategy and objectives, leverage, valuation procedures.
Given that EuVECAs, EuSEFs, and ELTIFs have specifically been created in order to
channel capital into long-term assets and projects and small and medium-sized enterprises,
views are welcome as to the extent to which the disclosure regime is appropriate and
contributes to the achievement of that goal, or, for those investment vehicles, provides
investors with little additional benefit.
Questions:
(13) Should future European long term investment funds (ELTIF), as well as certain
European social entrepreneurship funds (EuSEF)4 and European venture capital funds
(EuVECA)5of the closed-ended type and marketed to non-professional investors, be
exempted from the obligation to prepare a prospectus under the Directive, while
remaining subject to the bespoke disclosure requirements under their sectorial
legislation and to the PRIIPS key information document? Please state your reasoning,
if necessary by drawing comparisons between the different sets of disclosure
requirements which cumulate for these funds.
Yes, such an exemption would not affect investor/consumer protection in a
significant way
No, such an exemption would affect investor/consumer protection
3

Investors that commit to investing a minimum of 100,000 € and state in writing that they are aware of the risks associated with
the envisaged commitment or investment.
4
Established under Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European
social entrepreneurship funds (OJ L 115, 25.4.2013, p. 18)
5
Established under Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European
venture capital funds (OJ L 115, 25.4.2013, p. 1)

10

Don't know/no opinion
Textbox: [ justification ]

A.5. Extending the exemption for employee share schemes
A prospectus exemption is granted for offers of securities by a firm to its employees
(employee shares scheme, "ESS"), providing a document is made available containing
information on the number and nature of securities and the reasons for and details of the
offer (Article 4(1)(e)). However, a private company established outside the EU wishing to
offer its securities to its employees in the EU as part of an ESS is still required to prepare a
prospectus.
The reasoning behind this is that an ESS represents a very particular kind of offer in so far as
employees of an issuer do not have the same information needs as normal investors, and
therefore a full prospectus brings little added value in terms of investor protection.
While Directive 2003/71/EC only granted this exemption to issuer listed on an EU regulated
market, Directive 2010/73/EU extended it to ESS launched by any EU company, listed or not,
and to non-EU issuers provided their securities are admitted to trading on an EU regulated
market or on a third-country market, in which case an equivalence decision by the
Commission regarding the third-country market is required.
The level playing field was only partially achieved: a private company established outside the
EU wishing to offer its securities to its employees in the EU as part of an ESS is still required
to prepare a prospectus. This might deprive EU employees of non-EU, non-listed companies
from the opportunity to invest in their employer's securities, as their employer might refrain
from launching an ESS due to the administrative burden of preparing a full prospectus.
Accordingly, some EU employees might be disadvantaged relative to others.
Question
(14) Is there a need to extend the scope of the exemption provided to employee shares
schemes in Article 4(1)(e) to non-EU, private companies ? Please explain and provide
supporting evidence.
Yes
No
Don't know/no opinion
Textbox: [ justification ]

A.6. Balancing the favourable treatment of issuers of debt securities with a high
denomination per unit, with liquidity on the debt markets
Under both the Prospectus and Transparency Directives, a system of exemption thresholds
currently create incentives for issuers to issue debt securities with a high denomination per
unit, namely above EUR 100 000. Such a high threshold might create an incentive to only
issue in larger denominations, which as a consequence may inhibit liquidity on the secondary
market for corporate bonds and limit the issuance of debt securities in smaller
denominations:
•

under Directive 2003/71/EC, there is a prospectus exemption in Art. 3(2) for issuers of
securities (debt or equity) with a denomination per unit of at least EUR 100 000: this
exemption only applies to public offers while there is no such prospectus exemption in
11

case of admission of securities to trading on a regulated market. The Implementing
Regulation 809/2004 contains schedules for issuers of debt securities with a
denomination per unit of at least EUR 100 000 (Annexes IX & XIII in particular) which are
to be used for admission prospectuses. Such schedules are lighter than those for debt
securities with a denomination per unit below EUR 100 000 (Annexes IV & V). In addition,
issuers drawing up an admission prospectus for non-equity securities having a
denomination of at least EUR 100 000 are not required to provide a summary and benefit
from a more flexible language regime. Therefore, the incentive for debt issuers to
denominate their debt securities above EUR 100 000 per unit is (i) either less information
to disclose if the securities are admitted to trading, (ii) or no prospectus at all if no
admission is sought.
•

likewise, under Directive 2004/109/EC, a person issuing exclusively debt securities
admitted to trading on a regulated market, the denomination per unit of which is at least
EUR 100 000 is exempted from the obligation to publish annual and half-yearly financial
reports (Art. 8(1)(b)).

In both Directives, the threshold in terms of denomination per unit was raised from EUR
50 000 to EUR 100 000 by the amending Directive 2010/73/EU, as there was evidence that
the EUR 50 000 threshold no longer reflected the distinction between retail and professional
investors in terms of investment capacity, since it appeared that even retail investors were
making investments of more than EUR 50 000 in a single transaction.
Views are sought as to whether such a high threshold creates an incentive to only issue in
larger denominations, and whether this may inhibit liquidity on the secondary market for
corporate bonds, in which case a recalibration of the thresholds or of the incentives attached
thereto might be desirable.
Question
(15) Do you consider that the system of exemptions granted to issuers of debt
securities above a denomination per unit of EUR 100 000 under the Prospectus and
Transparency Directives may be detrimental to liquidity in corporate bond markets? If
so, what targeted changes could be made to address this without reducing investor
protection?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
If you have answered yes, do you think that:
(a) the EUR100 000 threshold should be lowered?
- Yes, to EUR [enter monetary figure]
- No
- Don't know/no opinion
- Textbox: [ justification ]
(b) some or all of the favourable treatments granted to the above issuers should be
removed?
- Yes, please indicate to what extent : [ ]
- No
- Don't know/no opinion
- Textbox: [ justification ]

12

(c) the EUR 100 000 threshold should be removed altogether and the current
exemptions should be granted to all debt issuers, regardless of the
denomination per unit of their debt securities?
- Yes
- No
- Don't know/no opinion
- Textbox: [ justification ]

B. The information a prospectus should contain
B.1. Proportionate disclosure regime
Following the previous review of the Directive, a proportionate disclosure regime was
introduced for certain types of issues and issuers, however, this lighter prospectus regime
does not seem to have delivered its intended effect and is apparently not widely used in
practice by issuers in most Member States.
The proportionate disclosure regime is currently available under Article 7(2)(e) and (g) for
rights issues (i.e. offers of shares to existing shareholders who can either subscribe those
shares or sell the right to subscribe for the shares), offers by SMEs and companies with
reduced market capitalisation (as defined in Article 2(1)(f) and (t)), and offers of non-equity
securities referred to in Article 1(2)(j) of Directive 2003/71/EC issued by credit institutions6 to
improve the efficiency of pre-emptive issues of equity securities and adequately to take
account of the size of issuers, without prejudice to investor protection.
The regime consists in a set of simplified schedules featured in the Implementing Regulation
n°809/2014, for each of the above, with minimum disclosure requirements that are lighter
than those applying to regular offers.
It seems however that the proportionate disclosure regime has not delivered its intended
effect and is not widely used in practice by issuers in most Member States, mainly because it
is still perceived as too burdensome.
Questions
(16) In your view, has the proportionate disclosure regime (Article 7(2)(e) and (g)) met
its original purpose to improve efficiency and to take account of the size of issuers? If
not, why?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(17) Is the proportionate disclosure regime used in practice, and if not what are the
reasons? Please specify your answers according to the type of disclosure regime.
a) Proportionate regime for rights issues
- Yes
- No
- Don't know/no opinion
6

Such offers are normally exempted from the prospectus requirement under Article 1(2)(j). The proportionate disclosure regime
may however be used by credit institutions who voluntarily choose to opt for the prospectus regime of the Directive.

13

- Textbox: [ justification ]
b) Proportionate regime for small and medium-sized enterprises and companies
with reduced market capitalisation
- Yes
- No
- Don't know/no opinion
- Textbox: [ justification ]
c) Proportionate regime for issues by credit institutions referred to in Article
1(2)(j) of Directive 2003/71/EC
- Yes
- No
- Don't know/no opinion
- Textbox: [ justification ]
(18) Should the proportionate disclosure regime be modified to improve its efficiency,
and how? Please specify your answers according to the type of disclosure regime.
a) Proportionate regime for rights issues
Textbox: [ ]
b) Proportionate regime for small and medium-sized enterprises and companies
with reduced market capitalisation
Textbox: [ ]
c) Proportionate regime for issues by credit institutions referred to in Article
1(2)(j) of Directive 2003/71/EC
Textbox: [ ]
(19) If the proportionate disclosure regime were to be extended, to whom should it be
extended?
To types of issuers or issues not yet covered? Please specify: [text box]
To admissions of securities to trading on an MTF, supposing those are brought
into the scope of the Directive? Please specify: [text box]
Other. Please specify: [text box]
Don't know/no opinion
Textbox: [ justification ]

B.2. Creating a bespoke regime for companies admitted to trading on SME growth markets
Directive 2014/65/EU on markets in financial instruments ("MIFID II") created the status of
"SME growth markets", It needs to be assessed whether a tailor-made prospectus regime
would be beneficial for the development of these markets.
"SME growth markets" is an optional label which an MTF may obtain by registering with its
competent authority, provided inter alia that at least 50% of the issuers whose securities are
traded on such an MTF are "SMEs", as defined by MIFID II as companies with a market
capitalisation below EUR 200 000 000.
In order to further foster and promote the use of SME growth markets by making them
attractive for investors and issuers, and providing a lessening of administrative burdens and
further incentives for SMEs and companies with reduced market capitalisation to access
capital markets through SME growth markets, a bespoke prospectus regime for SMEs and
companies with reduced market capitalisation admitted to trading on these new markets
could be considered.

14

At the very least, this could consist in making the proportionate disclosure regime described
in Annex XXV to XXVIII of the implementing Prospectus Regulation available to all SMEs, as
defined under MIFID II, thereby raising from EUR 100 000 000 to EUR 200 000 000 the
capitalisation limit included in the definition of "company with reduced market capitalisation"
of the Directive.
More radically, the establishment of a simplified set of schedules in the implementing
Prospectus Regulation, i.e. less detailed than the current Annexes XXV to XXVIII, could be
envisaged and these schedules could become the default content for any prospectus to be
prepared by an SME or a company with reduced market capitalisation admitted to trading on
an SME growth market when offering securities to the public.
Questions
(20) Should the definition of "company with reduced market capitalisation" (Article
2(1)(t)) be aligned with the definition of SME under Article 4(1)(13) of Directive
2014/65/EU by raising the capitalisation limit to EUR 200 000 000?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(21) Would you support the creation of a simplified prospectus for SMEs and
companies with reduced market capitalisation admitted to trading on an SME growth
market, in order to facilitate their access to capital market financing?
Yes
No, the higher risk profile of SMEs and companies with reduced market
capitalisation justifies disclosure standards that are as high as for issuers listed
on regulated markets.
Don't know/no opinion
Textbox: [ justification ]
(22) Please describe the minimum elements needed of the simplified prospectus for
SMEs and companies with reduced market capitalisation admitted to trading on an
SME growth market.
Textbox: [ justification ]

B.3. Making the "incorporation by reference" mechanism more flexible and assessing the
need for supplements in case of parallel disclosure of inside information
Both the Transparency Directive and the Market Abuse Directive 2003/6/EC oblige issuers to
disclose certain types of information to the public. Thus, it needs to be assessed whether
duplication in the prospectus and in the supplement respectively could be avoided.
The "incorporation by reference" mechanism allows for information that has already been
published and approved or filed with the relevant authority in accordance with the Prospectus
or Transparency Directives to be used for the purpose of a prospectus by including only a
reference therein. Incorporation by reference facilitates the procedure of drawing up a
prospectus and lowers the costs for issuers without lowering investor protection. This
mechanism could potentially be extended to other types of regulated information, as ESMA's
current work on the draft regulatory technical standards (RTS) under Directive 2014/51/EU
(Omnibus II) on incorporation by reference has shown.
15

Questions:
(23) Should the provision of Article 11 (incorporation by reference) be recalibrated in
order to achieve more flexibility? If yes, please indicate how this could be achieved (in
particular, indicate which documents should be allowed to be incorporated by
reference)?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(24) (a) Should documents which were already published/filed under the Transparency
Directive no longer need to be subject to incorporation by reference in the prospectus
(i.e. neither a substantial repetition of substance nor a reference to the document
would need to be included in the prospectus as it would be assumed that potential
investors have anyhow access and thus knowledge of the content of these
documents)? Please provide reasons.
Yes
No
Don't know/No opinion
Textbox [justification]
(b) Do you see any other possibilities to better streamline the disclosure requirements
of the Prospectus Directive and the Transparency Directive?
Yes
No
Don't know/No opinion
Textbox [justification]
(25) Article 6(1) Market Abuse Directive obliges issuers of financial instruments to
inform the public as soon as possible of inside information which directly concerns
the said issuers; the inside information has to be made public by the issuer in a
manner which enables fast access and complete, correct and timely assessment of
the information by the public. Could this obligation substitute the requirement in the
Prospectus Directive to publish a supplement according to Article 17 without
jeopardising investor protection in order to streamline the disclosure requirements
between Market Abuse Directive and Prospectus Directive?
Yes
No
Don't know/No opinion
Textbox [justification]
(26) Do you see any other possibility to better streamline the disclosure requirements
of the Market Abuse Directive and the Prospectus Directive?
Yes
No
Don't know/No opinion
Textbox [justification]

B.4. Reassessing the objectives of the prospectus summary and addressing possible
overlaps with the key information document required under the PRIIPs Regulation

16

The prospectus summary is one of the three components of a prospectus (alongside the
registration document and the securities note). Its purpose is to provide the key information
relating to the securities and their issuer in a concise manner and in non-technical language,
in order to help investors in their investment decision and to enable them to compare similar
securities. Nonetheless, the summary regime, as reformed by Directive 2010/73/EU, may not
have fully achieved its objectives and needs to be assessed in the light of the PRIIPs
regulation.
The summary regime may not have fully achieved its objectives when it was reformed by
Directive 2010/73/EU. The summary of the prospectus was supposed to be short, simple,
clear and easy for investors to understand. As a key source of information for retail investors
in particular, it was supposed to focus on key information that investors need for their
investment decisions and, thanks to its standardised format, to allow comparisons between
similar products. Views are welcome as to whether room for improvement exists, in particular
with regard to the comparability of summaries and their interaction with the final terms of a
base prospectus.
Questioning the purpose of the prospectus summary seems all the more relevant as the
Regulation on key information documents for packaged retail and insurance-based
investment products ("PRIIPS Regulation") will apply from 31 December 2016. Under this
Regulation, the manufacturer of any packaged investment product7 marketed to retail
investors will be under the obligation to draw up and publish a three-page key information
document (KID) for that product and the persons advising or selling the product will have to
provide such KID to retail investors before they buy it.
As certain packaged investment products (e.g. convertible bonds, structured notes, shares of
closed-ended collective investment schemes, asset-backed securities) may be securities
falling in the scope of the Directive, their offer to the public or admission to trading on a
regulated market may require the simultaneous production of a KID under PRIIPS and a
prospectus under the Directive (unless an exemption applies). Indeed, Article 3(1) of the
PRIIPS Regulation clarifies that both disclosure requirements apply in a cumulative way.
When this happens, there might be a partial overlap between some of the information listed
in Article 8(3) of the PRIIPS Regulation that are required to be featured in the KID and some
of the information required to be featured in the summary of the prospectus, as listed in
Annex XXII of the Prospectus Regulation. The revision of the Prospectus Directive gives an
opportunity to deal with such overlaps between the KID and the prospectus summary in
order to prevent unnecessary duplication of information.
More fundamentally, the PRIIPS KID is designed to provide retail investors with standardised
information about a broad range of investment opportunities in order to enable them to
understand and compare the key features and risks of such products. Its aim is therefore
largely overlapping with that of the prospectus summary. As the KID cannot exceed three
sides of A4-sized paper, whereas the prospectus summary is limited to 7% of the length of
the prospectus or 15 pages, whichever is the longer, the KID will most likely be the shorter of
the two documents, and the probability that investors may read it is higher.
Questions

7

Defined as "an investment (…) where, regardless of the legal form of the investment, the amount repayable to the retail
investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which
are not directly purchased by the retail investor".

17

(27) Is there a need to reassess the rules regarding the summary of the prospectus?
(Please provide suggestions in each of the fields you find relevant)
a) Yes, regarding the concept of key information and its usefulness for retail
investors
b) Yes, regarding the comparability of the summaries of similar securities
c) Yes, regarding the interaction with final terms in base prospectuses
d) No.
e) Don't know/no opinion
Textbox: [ justification ]
(28) For those securities falling under the scope of both the packaged retail and
insurance-based investment products (PRIIPS) Regulation8, how should the overlap of
information required to be disclosed in the key investor document (KID) and in the
prospectus summary, be addressed?
a) By providing that information already featured in the KID need not be
duplicated in the prospectus summary. Please indicate which redundant
information would be concerned : [textbox]
b) By eliminating the prospectus summary for those securities.
c) By aligning the format and content of the prospectus summary with those of
the KID required under the PRIIPS Regulation, in order to minimise costs and
promote comparability of products
d) Other: [textbox]
e) Don't know/no opinion
Textbox: [ justification ]
B.5. Imposing a length limit to prospectuses
A trend towards overly long prospectuses has been observed, especially since the adoption
of Directive 2010/73/EU. Views are welcome as to whether prospectuses of excessive length
still suit the information purpose: to convey key information on the issuer and the securities
on offer in order to aid investors in their investment decision. Yet, while there is currently a
length limit to the prospectus summary, there is none for the prospectus as a whole.
Imposing a length limit to the entire prospectus could be considered, but may prove
ineffective if the surplus information is then channelled into supplements. An alternative
approach could consist in setting specific limits (not necessarily in terms of number of pages)
to certain sections of the prospectus. For instance, the disclosure of risk factors, which is
sometimes viewed as responsible for the size inflation of prospectuses, could be made
subject to limitations by setting a maximum limit to the number of risk factors that may be
presented and therefore requiring issuers to mention only the key risks most relevant to
them.
Questions
(29) Would you support introducing a maximum length to the prospectus? If so, how
should such a limit be defined?
Yes, it should be defined by a maximum number of pages and the maximum
should be [ figure] pages
Yes, it should be defined using other criteria, for instance: [textbox]
No
8

Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information
documents for packaged retail and insurance-based investment products (PRIIPs) (OJL 352, 9.12.2014, p. 1)

18

Don't know/no opinion
Textbox: [ justification ]
(30) Alternatively, are there specific sections of the prospectus which could be made
subject to rules limiting excessive lengths? How should such limitations be spelled
out?
Textbox: [ ]

B.6. Liability and sanctions
The Directive aligns liability and sanctions only to a limited degree, as evidenced in ESMA's
report on "Comparison of liability regimes in Member States in relation to the Prospectus
Directive" (ESMA/2013/619). Thus, there might be a need to further harmonise liability and
sanctions to create a level playing field within the EU. Article 6 governs the responsibility/civil
liability attaching to the prospectus which attaches at least to the issuer or its administrative,
management or supervisory bodies, the offeror, the person asking for the admission to
trading on a regulated market or the guarantor, as the case may be. A specific liability regime
exists for summaries: namely no civil liability attaches 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, or it does not
provide, when read together with the other parts of the prospectus, key information in order
to aid investors when considering whether to invest in such securities.
Fundamental provisions regarding sanctions are laid down in Articles 25 and 26. Without
prejudice to the right of Member States to impose criminal sanctions and without prejudice to
their civil liability regime, Member States are required to ensure, in conformity with their
national law, that the appropriate administrative measures can be taken or administrative
sanctions be imposed against the persons responsible, where there is a breach of the
national rules implementing the Directive. Member States shall ensure that these measures
are effective, proportionate and dissuasive. Furthermore, Member States shall provide that
the competent authority may disclose to the public every measure or sanction that has been
imposed for breaches of the national provisions transposing this Directive, unless the
disclosure would seriously jeopardise the financial markets or cause disproportionate
damage to the parties involved. The right to appeal against decisions taken under the
Directive is also provided for.
There may be a case for upgrading the prospectus sanctioning regime to the one recently
introduced in the amended Transparency Directive and MIFID II, by defining more precisely
the types of sanctions which Member States and their competent authorities should have the
power to impose as a minimum, the circumstances which they should take into account when
applying those sanctions, as well as measures concerning the publication of sanctions and
the mechanisms to enable reporting of potential infringements of the Directive.
Questions:
(31) Do you believe the liability and sanctions regimes the Directive provides for are
adequate? If not, how could they be improved?
Yes
•
•

No

No opinion

the overall civil liability regime of Article 6
the specific civil liability regime for
prospectus summaries of Article 5(2)(d)
19

and Article 6(2)
• the sanctions regime of Article 25
Textbox: [ justification ]
(32) Have you identified problems relating to multi-jurisdiction (cross-border) liability
with regards to the Directive? If yes, please give details.
Yes
No
Don't know/no opinion
Textbox: [ justification ]

C. How prospectuses are approved
C.1. Streamlining further the approval process of prospectuses by national competent
authorities (NCAs)
Currently, scrutiny and approval procedures are handled differently across Member States.
Thus, there might be room for improving the approval process to make it more transparent
and more flexible for the issuers seeking to react quickly to market windows and to market
their securities. According to Article 2(1)(q) of the Directive, “approval” is defined as "[…] the
positive act at the outcome of the scrutiny of the completeness of the prospectus by the
home Member State’s competent authority including the consistency of the information given
and its comprehensibility." Provisions regarding the approval are contained in Article 13, in
particular the timeframe allocated to NCAs to carry out their review of a prospectus, from the
moment a complete draft prospectus is submitted by the issuer (10 days for regular
submissions, 20 days for IPO submissions).
Scrutiny and approval procedures are handled differently across Member States due to
different national procedural administrative law, supervisory practices and liability regimes.
More consistent approaches to procedural provisions may be needed in order to ensure a
level playing field, in particular, but not limited to, the methods of the scrutiny carried out by
the NCAs prior to approval.
Furthermore, views are sought on ways to make the scrutiny and approval process more
transparent to the public and more flexible for the issuers seeking to react quickly to market
windows. For example, this could be achieved by making public the first draft prospectus
filed with the NCA for review and by explicitly allowing the issuer to carry out certain
marketing activities in relation to the offer or the admission to trading, going beyond
advertising (see Article 15), in the period between the first submission of a draft prospectus
and the approval of its final version. Such a provision may bring additional flexibility to
issuers in so far as it would allow them to gauge the appetite of potential investors on the
basis of a draft prospectus. It would not however endanger investor protection as no legallybinding purchase or subscription would take place until the prospectus has received formal
approval by the competent authority.
Lastly, the decision to admit securities to trading on a regulated market is currently distinct
from the approval of the prospectus required for such an admission. Since in practice the
admission decision is often the responsibility of either the firm operating the exchange or an
ad hoc listing authority, it follows that the admission decision and the prospectus approval
might eventually be handled by two different entities, depending on the Member State. This
is true in particular in Member States where Directive 2001/34/EC on the admission of
20

securities to official stock exchange listing and on information to be published on those
securities (the "Listing Directive") is applied to regulated markets, in which case the
admission decision is the responsibility of the competent authority appointed by Member
States under the Listing Directive and follows a process set out therein. In any case, the
benefits of having both decisions handled by the same authority should be assessed in order
to simplify the process of first admission to trading on a regulated market.
Questions:
(33) Are you aware of material differences in the way national competent authorities
assess the completeness, consistency and comprehensibility of the draft
prospectuses that are submitted to them for approval? Please provide
examples/evidence.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(34) Do you see a need for further streamlining of the scrutiny and approval
procedures of prospectuses by NCAs? If yes, please specify in which regard.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(35) Should the scrutiny and approval procedure be made more transparent to the
public? If yes, please indicate how this should be achieved.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(36) Would it be conceivable to allow marketing activities by the issuer in the period
between the first submission of a draft prospectus and the approval of its final
version, under the premise that no legally binding purchase or subscription would
take place until the prospectus is approved? If yes, please provide details on how this
could be achieved.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(37) What should be the involvement of NCAs in relation to prospectuses? Should
NCAs:
a) review all prospectuses ex ante (i.e. before the offer or the admission to trading
takes place)
b) review only a sample of prospectuses ex ante (risk-based approach)
c) review all prospectuses ex post (i.e. after the offer or the admission to trading
has commenced)
d) review only a sample of prospectuses ex post (risk-based approach)
e) Other
f) Don't know/no opinion
Please describe the possible consequences of your favoured approach, in particular
in terms of market efficiency and invest protection.
21

Textbox: [ justification ]
(38) Should the decision to admit securities to trading on a regulated market
(including, where applicable, to the official listing as currently provided under the
Listing Directive), be more closely aligned with the approval of the prospectus and the
right to passport? Please explain your reasoning, and the benefits (if any) this could
bring to issuers.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(39) (a) Is the EU passporting mechanism of prospectuses functioning in an efficient
way? What improvements could be made?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(b) Could the notification procedure set out in Article 18, between NCAs of home and
host Member States be simplified (e.g. limited to the issuer merely stipulating in which
Member States the offer should be valid, without any involvement from NCAs), without
compromising investor protection?
Yes
No
Don't know/no opinion
Textbox: [ justification ]

C.2. Extending the base prospectus facility
The approval procedure for base prospectuses is more flexible than the standard regime and
issuers who are eligible to use it find that this flexibility addresses their need for swift and
timely access to capital markets, but it is at present limited to certain types of non-equity
issues. Whereas the base prospectus itself is approved by the NCA, its final terms are
subject to a distinct, more flexible treatment with regard to their publication and the role of the
NCA. Indeed, because they only contain a limited amount of new information, and their
corresponding base prospectus has already been approved and published, final terms are
just filed with the NCA, not approved by it, and they just need to be made available to the
public where possible before the beginning of the public offer.
The option to draw up a base prospectus is currently only available for non-equity securities
issued under an offering programme (in which case the base prospectus remains valid for a
period of up to 12 months) or issued in a continuous or repeated way by credit institutions (in
which case it remains valid until no more of the securities concerned are issued).
Furthermore, it should be expressly clarified in the Directive whether a base prospectus can
be drawn up as a tripartite prospectus or not.
Views are sought as to how to make the EU base prospectus facility accessible to more
issuers and more types of issuances, and on how to bring additional flexibility to it.

22

Question:
(40) Please indicate if you would support the following changes or clarifications to the
base prospectus facility. Please explain your reasoning and provide supporting
arguments:

a) The use of the base prospectus facility should
be allowed for all types of issuers and issues
and the limitations of Article 5(4)(a) and (b)
should be removed

I support

I do not
support

Justify

[•]

[•]

[ textbox ]

[•]

[ textbox ]

[•]

[•]

[ textbox ]

[•]

[•]

[ textbox ]

[•]

[•]

[ textbox ]

[•]
b) The validity of the base prospectus should be
extended beyond one year
c) The Directive should clarify that issuers are
allowed to draw up a base prospectus as
separate documents (i.e. as a tripartite
prospectus), in cases where a registration
document has already been filed and approved
by the NCA
d) Assuming that a base prospectus may be
drawn up as separate documents (i.e. as a
tripartite prospectus), it should be possible for
its components to be approved by different
NCAs
e) The base prospectus facility should remain
unchanged
f) Other (please specify)

Please
indicate the
appropriate
validity
length: [•]

[ textbox ]

C.3. The separate approval of the registration document, the securities note and the
summary note ("tripartite regime")
Apart from the base prospectus facility, the so-called "tripartite regime", i.e. the separate
approval of a registration document, a securities note and a summary note (Article 5(3) and
12), also provides additional flexibility to issuers. Views are sought as to how the "tripartite
regime" is used in practice and what improvements could be envisaged.
Question:
(41) How is the "tripartite regime" (Articles 5 (3) and 12) used in practice and how
could it be improved to offer more flexibility to issuers?
Textbox: [ ]

C.4. Reviewing the determination of the home Member State for issues of non-equity
securities.
23

Issuers of certain types of non-equity securities can choose which Member State should act
as the home Member State (and thus approve the prospectus). This right to choose might
have led to unnecessary complexity and supervisory divergence. Article 2(1)(m)(ii) of
Directive 2003/71/EC allows an issuer to choose its home Member State for issues of nonequity securities with a denomination per unit above 1,000 € as well as for issues of certain
non-equity securities giving the right to acquire transferable securities or to receive a cash
amount, as a consequence of a conversion or exercise of right. In such cases, the home
Member State may be chosen between (i) the Member State where the issuer has its
registered office, (ii) the Member State where the debt is going to be admitted to trading on a
regulated market, or (iii) the Member State where the debt is offered to the public. No such
choice exists for non-equity securities whose denomination per unit is below 1,000 €, in
which case the home Member State is the one where the issuer has its registered office.
It has been argued that the dual regime for the determination of the home Member State for
non-equity securities, built around the threshold of 1,000 € for the denomination per unit,
creates unnecessary complexity for issuers of non-equity securities as it may result in there
being different home Member States for an issuer's various products.
Question:
(42) Should the dual regime for the determination of the home Member State for nonequity securities featured in Article 2(1)(m)(ii) be amended? If so, how?
a) No, status quo should be maintained.
b) Yes, issuers should be allowed to choose their home Member State even for
non-equity securities with a denomination per unit below EUR 1 000.
c) Yes, the freedom to choose the home Member State for non-equity securities
with a denomination per unit above EUR 1 000 (and for certain non-equity
hybrid securities) should be revoked.
Textbox: [ justification ]

C.5. Moving to an all-electronic system for the filing and publication of prospectuses
Prospectuses are made available to the public either in printed or electronic form, but no
comprehensive all-electronic system exists today. Thus, it should be assessed whether
creating a single database that would operate as a unique entry point for both investors and
persons producing and filing prospectuses across the EU Member States would be
beneficial. The Directive provides that the prospectus, once approved by the relevant NCA,
shall be made available to the public by the issuer and such publication is possible either in
printed form (Article 14(2)(a) and (b)) or in electronic form (Article 14(2)(c) to (e)).
It is questionable whether keeping the printed form among the options for making a
prospectus available to the public still makes sense today, given the advances in technology
and the progress in internet access over the past years. If most investors can be presumed
to have access to the Internet, the rules may be simplified by providing that issuers and
offerors need only post their prospectus to a website in order to fulfil their publication
requirements. Of course, the obligation for the issuer to provide a paper copy free of charge
upon request by investors (Article 14(7)), would still be retained in order not to create
discrimination between investors.
Regarding the filing of prospectuses and their accessibility by investors on a cross-border
basis, it is worth referring to the developments introduced by the revised Transparency
Directive in 2013. Directive 2013/50/EU created a web portal, operated by ESMA, to serve as
a European electronic access point to regulated information of issuers listed on regulated
24

markets. It will start to operate in 2018 and will be interconnected with the officially appointed
mechanisms for the central storage of regulated information of each Member State.
Based on that example, it should be assessed whether creating a single, centralised, EU
database that would operate as a unique entry point for both investors and persons
producing and filing prospectuses across the 28 Member States, could bring benefits in
facilitating effective cross-border access to information and streamlining the process of
prospectus filing by issuers, while maintaining a high standard of investor protection.
Questions:
(43) Should the options to publish a prospectus in a printed form and by insertion in a
newspaper be suppressed (deletion of Article 14(2)(a) and (b), while retaining Article
14(7), i.e. a paper version could still be obtained upon request and free of charge)?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(44) Should a single, integrated EU filing system for all prospectuses produced in the
EU be created? Please give your views on the main benefits (added value for issuers
and investors) and drawbacks (costs)?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(45) What should be the essential features of such a filing system to ensure its
success?
Textbox: [ ]

C.6. Equivalence of third-country prospectus regimes
The current Directive lacks a single equivalence regime for prospectuses drawn up in
accordance with the legislation of third countries, which might hinder cross-border investment
flows. Assessments are currently made by each national authority for each third-country
prospectus on a case-by-case basis, under the provision of Article 20. So far, the
Commission has not used its empowerment to adopt delegated acts establishing general
EU-wide equivalence criteria for third-country prospectuses. In 2011, ESMA published a
Statement concerning a framework for third-country equity prospectuses (ESMA/2011/36,
revised under ESMA/2013/317) that essentially would allow a third country prospectus to
have a "wrap" added to it so that the resulting document meets the requirements of the
Directive. However, this framework has only been applied to one third country so far and, in
any event, it has no binding force on NCAs when approving a third country prospectus.
An equivalence regime could be developed and applied for all third countries. A general
equivalence decision could be taken for each third country by the Commission, subject to the
assessment that the requirements of the third country prospectus regime are equivalent to
those of the Directive in that they achieve the same outcome in terms of investor protection.

Questions:
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(46) Would you support the creation of an equivalence regime in the Union for third
country prospectus regimes? Please describe on which essential principles it should
be based.
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(47) Assuming the prospectus regime of a third country is declared equivalent to the
EU regime, how should a prospectus prepared by a third country issuer in accordance
with its legislation be handled by the competent authority of the Home Member State
defined in Article 2(1)(m)(iii)?
a) Such a prospectus should not need approval and the involvement of the Home
Member State should be limited to the processing of notifications to host
Member States under Article 18
b) Such a prospectus should be approved by the Home Member State under
Article 13
c) Don't know/no opinion
Textbox: [ justification ]
----Final questions:
(48) Is there a need for the following terms to be (better) defined, and if so, how:
a) "offer of securities to the public"
Yes
No
Don't know/no opinion
Textbox: [ justification ]
b) "primary market" and "secondary market"?
Yes
No
Don't know/no opinion
Textbox: [ justification ]
(49) Are there other areas or concepts in the Directive that would benefit from further
clarification?
No, legal certainty is ensured
Yes, the following should be clarified: [ ]
Don't know/no opinion
Textbox: [ justification ]
(50) Can you identify any modification to the Directive, apart from those addressed
above, which could add flexibility to the prospectus framework and facilitate the
raising of equity or debt by companies on capital markets, whilst maintaining effective
investor protection? Please explain your reasoning and provide supporting
arguments.
Yes
No
Don't know/no opinion
Textbox: [ justification ]

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(51) Can you identify any incoherence in the current Directive's provisions which may
cause the prospectus framework to insufficiently protect investors? Please explain
your reasoning and provide supporting arguments.
Yes
No
Don't know/no opinion
Textbox: [ justification ]

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