05 November 2013

ESMA Questions and Answers on Prospectus: version 20

Harvey Knight
Partner | UK

The European Securities and Markets Authority (ESMA) has published version 20 of its ‘Prospectuses Questions and Answers’. The purpose of ESMA’s publishing Questions and Answers (Q&A) is to promote common supervisory approaches and practices.

The Q&A document provides responses to questions posed by both the general public and competent authorities in relation to the practical application of the Prospectus Directive. The updated version includes three new questions and answers, addressing the following areas:

  • Statement of auditors’ agreement where a prospectus includes a profit estimate (question 88). ESMA considers that this statement (required under paragraph (b) of item 13.2 of Annex I of the Prospectus Regulation ) that the auditors agree the financial information is substantially consistent with the final figures to be published in the next annual audited financial statements may be made by the auditors, issuer, offeror or person seeking admission to trading. ESMA also considers that the statement means that the auditors do not expect the figures to change substantially, except in the case of unforeseen events, and it does not necessarily imply that the auditors should be able to issue their audit opinion when the prospectus is published.
  • Application of proportionate disclosure regime to a rights issue that is not fully subscribed (question 89). ESMA considers that where an offer to the public is made in respect of unsubscribed shares following a rights issue, this should be regarded as a separate public offer and be accompanied by a prospectus drawn up in accordance with the requirements of Annexes I to III of the Prospectus Regulation. Unless a relevant exemption is available in the circumstances, the proportionate disclosure regime for rights issues will not apply.
  • Proportionate disclosure regime for rights issues and admission to trading (question 90). ESMA clarifies that a prospectus drawn up in accordance with the proportionate disclosure regime for rights issues (in Annexes XXIII and XXIV of the Prospectus Regulation) is also applicable to the admission to trading on a regulated market of new shares that are not subscribed by existing shareholders or by pre-emptive rights holders, but placed with other investors by using the exemptions set out in Article 3.2 of the Prospectus Directive.

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