The amending Directive to the Prospectus Directive was published in the European Union’s Official Journal on 11 December 2010 and so has become law. Member states now have 18 months to implement the changes, while the Committee of European Securities Regulators (CESR) – soon to be the European Securities and Markets Authority (ESMA) – will be tasked now with clarifying how some of the changes should be implemented. The key changes for smaller quoted companies are:
- The fundraising threshold above which a prospectus has to be produced has doubled, from €2.5 million to €5 million;
- The investor threshold above which a prospectus has to be produced has increased from 100 to 150 people;
- Offers made in the context of an employee share schemes are exempt from the requirements to produce a prospectus; and
- A proportionate disclosure regime is to be introduced for offers to existing shareholders, SMEs (as defined within the Directive) and companies with reduced market capitalisations, and is available to companies in the UK on the London Stock Exchange’s Main Market and AIM as well as PLUS.
HM Treasury has already indicated in its response to the Business Finance Green Paper, Financing a Private Sector Recovery, that it intends to bring in the changes to the fundraising and investor thresholds early. To read more about this, click here