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New EU Prospectus Regulation: Updated ESMA Questions and Answers

Further to our various updates on the implementation of the Prospectus Regulation (the Regulation) in the UK and the European Union (EU) (which applies across the UK and the European Union from July 21, 2019), on July 12, 2019 the European Securities and Markets Authority (ESMA) published its guidance on the Regulation in the form of significantly revised and updated questions and answers (Q&As).

Three of the new Q&As relate to:

  • Grandfathering/ Implementation of the Regulation: ESMA has opined that it is possible to continue an offer of securities in the EU after the end of the validity of a base prospectus approved under the current Prospectus Directive rules. However, the person responsible for the base prospectus should prepare a new set of final terms, which should comply with the relevant provisions of the Regulation and should be made available to the public and filed with the relevant EU regulator.

  • Supplements: ESMA has opined that:

    • financial intermediaries (persons who are allowed to distribute securities issued by other entities) must also comply with the Regulation when distributing securities that they issue themselves.

    • all the relevant disclosure obligations apply for supplements issued by financial intermediaries on the day that the supplement is published.

The other 22 new Q&As, originally published in relation to the Prospectus Directive but now updated in relation to the Regulation, relate to public offers, incorporation by reference, determining the Home Member State, financial information, information in supplements, quality of translations of passported prospectuses, responsibility for a prospectus, final terms/base prospectus, as well as derivatives, indices, underlyings, related disclosures and requirements for the inclusion of “extra” information in individual summaries.

ESMA has also announced that it has decided not to transpose 28 Q&As published in relation to the Prospectus Directive in relation to the Regulation — although they will remain valid guidance on prospectuses that were prepared under the Prospectus Directive rules until July 21, 2020, after which they will be deleted.

The Q&As are available here.

For previous CFWD updates on the Regulation, please see:





©2020 Katten Muchin Rosenman LLP


About this Author

Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...