On 28 January 2021, ESMA updated its Questions and Answers (Q&As) relating to Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 .On the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (“Prospectus Regulation”) and to Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (“Commission Delegated Regulation 2019/980”). Those are collectively referred to as the “Prospectus Q&As”. The updated version of the Prospectus Q&As includes six (6) new Q&As covering the areas of financial information, updating of the prospectus, disclosure requirements for statements prepared by experts, order of information appearing in a prospectus, applicability of disclosure annexes and the exceptions in Article 1(5) of the Prospectus Regulation. We summarise in this article the key clarifications/confirmations provided by ESMA.
Financial information ESMA clarified what is meant by “or such shorter period as the issuer has been in operation” in item 18.1.1 of Annex 1 of the Commission Delegated Regulation 2019/980 which relates to the requirement to provide audited historical financial information. ESMA gives guidance on the interpretation of this requirement, using a number of practical examples. For instance, insofar as issuers operating for less than one financial year are under the obligation to prepare audited historical financial information in their prospectus for the time period commencing on the company’s incorporation or entry into operation (if different), ESMA clarified that those issuers can decide whether the short-period audited historical financial information will cover the time period until the end of that first financial year, or the most feasible date before the publication of the prospectus.
Updating of the Prospectus ESMA confirmed that a new prospectus cannot be used to make several offers if that prospectus does not contain information on all such offers (although information from a previous prospectus can be incorporated by reference into a subsequent prospectus for a new offer).
Disclosure requirements for statements prepared by experts ESMA clarified the requirement to include a statement in the registration document outlining that it is possible to inspect “all reports, letters, and other documents, valuations and statements prepared by any expert at the issuer’s request, any part of which is included or referred to in the registration document”. ESMA confirmed that the reference to “prepared by an expert” applies only to ‘valuations and statements’. On the other hand, all reports, letters and other documents referred to in the registration document are expected to be put on display electronically regardless of whether or not they are prepared by an expert/at the issuer’s request.
Order of information in the prospectus ESMA confirmed that the order of information prescribed by Articles 24 and 25 of Commission Delegated Regulation 2019/980 is mandatory and therefore issuers cannot deviate from it. This does not prevent issuers from including a brief cover note with other information about the issuer and the securities before the mandatory information.
Applicability of disclosure annexes To determine which annexes of Commission Delegated Regulation 2019/980 are applicable when preparing a prospectus, ESMA has drawn up a table available at the following link.
Status of exemptions in Article 1(5) of the Prospectus Regulation ESMA confirmed that the exemptions provided in Article 1(5) of the Prospectus Regulation are independent of each other, meaning that if one of the exemptions applies the issuer is no longer required to publish a prospectus.
