The full regulation will come into force in July, imposing new requirements for prospectuses
The new EU Prospectus Regulation will take full effect on 21 July 2019. Issuers and other parties to capital markets transactions can expect changes in the following areas:
- Prospectus summary: New content requirements and length restrictions will make the summary section more concise while allowing issuers the flexibility to include key information for investors.
- Risk factors: With some material changes to the rules relating to risk factors and new ESMA guidelines, risk factors are likely to be a particular focus area for regulators.
- Simplified prospectus: A new reduced disclosure regime will apply to secondary issues, such as rights issues.
- Growth prospectus: Certain issuers, mainly SMEs, will be able to make public offers using an EU Growth Prospectus with lighter disclosure requirements and a standardised format.
Although the new rules will not take effect until July, competent authorities are already applying the new requirements to any prospectuses under review that are expected to be approved after 21 July 2019. In the coming weeks, Latham & Watkins will publish additional posts that take a more detailed look at the changes to the summary section, risk factors, and other areas that will impact transactions. Continue Reading