The new EU Prospectus Regulation (Regulation (EU) 2017/1129) comes fully into force across the EU on 21 July 2019 and replaces the existing Prospectus Directive and related EU rules. It forms part of the European Commission's wider Capital Markets Union project, designed to improve access to European capital markets. As with the Commission's previous efforts at reform in this area, the changes focus on giving companies more freedom to raise capital without having to publish a costly and time-consuming regulator-approved prospectus. Where the new rules do require a formal document, they attempt to cut down on inessential content.

This bulletin focuses on the headline changes affecting issues of shares. It also discusses the approach of the FCA and AIM to implementing the new regime in the UK.

Autoren: Delphine Currie James F. Wilkinson Edmund Tyler

Financial charts, line graph, bar chart, pie chart

When a prospectus is not required - offers to the public

  • Very small capital raisings. Companies can now raise up to €1 million from the public in the EEA within a 12-month period without having to publish a prospectus. ‘Over-protective’ countries can no longer require companies to publish a prospectus below this threshold. However, countries may impose other compliance requirements (for example in the UK, subject to certain exceptions, an FCA-authorised firm must approve financial promotions to retail investors). This change came into force on 21 July 2018.
  • Small capital raisings. Each EEA member state can also create its own exemption from having to publish a prospectus for offers of securities to the public within the EEA to raise up to €8 million within a 12-month period. The UK has opted to take advantage of this, and has set the limit at the maximum of €8 million. Companies seeking to rely on this exemption for offerings into another EEA member state will need to check the relevant state has opted into the exemption, the maximum amount that can be raised under that exemption, and that there are no other prospectus or disclosure requirements. This change also came into force on 21 July 2018.
  • Existing exemptions. The above exemptions are in addition to the long-standing exemptions available for certain offers of securities, including offers aimed at 'qualified investors' (essentially, professional investors), or at fewer than 150 retail investors per EEA state, or where the minimum consideration payable by each investor is €100,000 (or where the securities are denominated in amounts of at least €100,000), together with the exemptions for scrip dividends and employee share schemes. The latter exemption will now be available to any company, regardless of where it is registered or listed.