ESMA submits first part of technical advice under the Prospectus Regulation

The European Securities and Markets Authority (ESMA) has published the first part of its technical advice (TA) under the Prospectus Regulation. The TA covers the areas of format and content of prospectuses, the EU Growth Prospectus, and the scrutiny and approval of prospectuses. In developing the advice, ESMA has taken into account responses to three consultation papers published on 6 July 2017.

On format and content of prospectuses, the TA largely proposes to maintain the requirements of the existing prospectus regime. In response to consultation feedback, ESMA has decided to withdraw its proposals for a mandatory cover note, a ‘how to use the prospectus’ section and a stand-alone use of proceeds section. It has also decided that the risk factors section should remain at the beginning of the prospectus after the summary. Although the majority of respondents asked for the audit report on profit forecasts and profit estimates to be retained, ESMA has decided to delete the requirement.

ESMA proposes standard criteria fo scrutiny of the completeness, comprehensibility and consistency of the prospectus, while giving national competent authorities a certain level of flexibility. The TA also sets out procedures for the approval and filing of the prospectus, largely based on the existing provisions of the Commission Delegated Regulation 2016/301.

The TA sets out the minimum disclosure requirements for the EU Growth Prospectus, the order in which they should be presented, and the format and content of the specific summary. ESMA has made a number of changes to its proposals for the EU Growth Prospectus in response to consultation