On 31 July 2011, two key amendments to the Prospectus Directive came into force in UK law, which will help small and mid-cap quoted companies raise equity more cost effectively and efficiently. These amendments (known as the Prospectus Regulations 2011) extend two of the exemptions from having to produce a prospectus for an offer to the public and include:
- increasing the limit for exempt offers from £2.5m to £5m; and
- increasing the exemption for offers to fewer than 100 persons to fewer than 150 persons
The Quoted Companies Alliance was instrumental in encouraging HM Treasury to bring these two changes in early, well ahead of the deadline from the European Commission of 1 July 2012.
These two changes are a precursor to other amendments to the Prospectus Directive that are currently the subject of consultation, notably the introduction of a reduced disclosure regime for prospectuses for rights issues and for smaller companies. The Quoted Companies Alliance Legal Committee is working on this consultation, which is currently under review by the European Securities and Markets Authority (ESMA), to ensure that the reduced disclosure regimes are simplified and robust.
We will be sure to keep you up to date with any additional developments in this area.