WHAT IS THE AIM OF THE REGULATIONS?
- Regulation (EU) 2017/1129 (the Prospectus Regulation), as amended by Regulations (EU) 2024/2809, 2023/2869, 2021/337, 2020/1503 and 2019/2115, and supplemented by Delegated Regulations (EU) 2019/979, (EU) 2019/980 and (EU) 2021/528, aims to help companies, including small and medium-sized enterprises (SMEs), access different forms of finance in the European Union (EU), and investors to make informed investment decisions. It does so by simplifying and streamlining the rules and procedures for drawing up, approving and distributing the prospectus1 a company publishes when offering securities2 to the public or admitting securities to trading on a regulated market.
- The legislation reduces costly and burdensome red tape for companies and enables investors to make the right investment decision by providing comprehensible, easy-to-analyse and concise information.
KEY POINTS
The Prospectus Regulation:
- requires a prospectus for an offer of securities to the public or for the admission to trading of securities on a regulated market in the EU;
- recognises the status of a listed company by providing exemptions from the obligation to publish a prospectus for offers to the public or admission to trading on a regulated market of securities fungible with those already admitted to trading (introduced by Regulation (EU) 2024/2809); these exemptions are subject to different investor protection safeguards that vary based on the exemption type and whether the securities exceed the 30 % threshold of those already admitted to trading;
- removes the need for a prospectus for any offer of securities to the public that does not benefit from a passport3, below the new EU-wide threshold of €12 million (replacing both the previous €1 million exemption and the optional exemption that Member States could establish up to an €8 million ceiling, as amended by Regulation (EU) 2024/2809); Member States may, however, apply a lower threshold of €5 million, but not below that level;
- sets out rules to curb the tendency to overload prospectuses with generic risk factors; the amended rules now require that risk factors be specific and material, restrict the use of generic disclaimers and permit issuers to rank risks as low, medium or high;
- strengthens supervisory convergence by harmonising the scrutiny and approval of prospectuses (including the applicable timelines) throughout the EU; competent authorities are bound by stricter deadlines and must notify issuers and the European Securities and Markets Authority (ESMA) in the event of delays, while ESMA gains a stronger coordinating role;
- enables companies that frequently issue securities to use the universal registration document to secure fast-track approval from supervisors; following the amendment introduced by Regulation (EU) 2024/2809, an issuer now qualifies as a ‘frequent issuer’ after only one year of approved universal registration documents (previously two years);
- introduces a European online database, operated free of charge by ESMA, containing all prospectuses approved in the European Economic Area;
- requires prospectuses and certain related documents, along with some exemption documents, to be accessible on the European single access point (ESAP).
The Prospectus Regulation requires a prospectus to enable an investor to make an informed decision. It must include:
- assets, liabilities, profits, losses, financial position and prospects for the issuer and any guarantor;
- rights attached to the securities;
- reasons for issuing the securities and their impact on the issuer;
- a clear and accurate seven-page summary (except for the admission to trading of non-equity securities only targeting qualified investors) that provides:
- an introduction with warnings that the investor could lose all or part of the invested capital,
- key information on the issuer,
- key information on the securities, including the type and class of securities and the rights attached to the securities,
- key information on the offer of securities to the public and/or the admission to trading on a regulated market,
- where relevant, a brief description of the nature and scope of a guarantee.
The Prospectus Regulation, as amended by Regulation (EU) 2024/2809, establishes a standardised, simplified and significantly alleviated EU growth issuance prospectus, replacing the earlier and more comprehensive EU growth prospectus rules. It is a single, lighter prospectus capped at 75 pages (for shares) available to SMEs, certain issuers on SME growth markets and unlisted companies raising up to €50 million.
In addition, the Prospectus Regulation, as amended by Regulation (EU) 2024/2809, establishes the EU follow-on prospectus for secondary issuances by companies already listed on a regulated market or SME growth market. This is a significantly shorter prospectus (limited to 50 pages for shares), subject to a reduced approval period, and replaces the earlier more comprehensive simplified secondary issuance prospectus.
The Prospectus Regulation, as amended by Regulation (EU) 2024/2809, also significantly streamlines and standardises the main prospectus for all offers of securities to the public or admissions to trading on a regulated market and introduces a page limit of 300 pages for share prospectuses.
The Prospectus Regulation harmonises the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division.
The Prospectus Regulation introduces a prospectus exemption for offers of securities to the public made by crowdfunding service providers (raising money from a large group of people, often via the internet) that do not exceed the threshold of €5 million in accordance with the conditions specified in amending Regulation (EU) 2020/1503.
The Prospectus Regulation, as amended by Regulation (EU) 2024/2809, also makes further changes to improve efficiency and investor protection:
- prospectuses are now provided only in electronic form, with simplified language rules;
- future financial information may be more efficiently incorporated by reference into base prospectuses, within their validity, instead of being included via a supplement (still possible on voluntary basis);
- the equivalence rules for recognising non-EU-country prospectuses are simplified;
- investor withdrawal rights are extended from two to three working days.
Delegated acts
The European Commission has adopted the following acts:
- Delegated Regulation (EU) 2019/979 laying down details of the key financial information in the summary of the prospectus, the publication and classification of the prospectus, the advertisement for the securities, supplements to a prospectus and the notification portal;
- Delegated Regulation (EU) 2019/980 laying down details of the precise content and format of the prospectus, and concerning the scrutiny and approval of the prospectus;
- Delegated Regulation (EU) 2021/528 setting out the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division;
- Delegated Regulation (EU) 2020/1272 amending and correcting Delegated Regulation (EU) 2019/979;
- Delegated Regulation (EU) 2020/1273 amending and correcting Delegated Regulation (EU) 2019/980.
FROM WHEN DO THE REGULATIONS APPLY?
- Regulation (EU) 2017/1129 and Delegated Regulations (EU) 2019/979 and (EU) 2019/980 have applied since 21 July 2019.
- Delegated Regulation (EU) 2021/528 has applied since 15 April 2021.
- Regulation (EU) 2024/2809 entered into force on 4 December 2024. Most of its provisions apply from that date. Certain changes apply from 5 March 2026, and others, including rules on prospectus format, scrutiny and ESMA powers, apply from 5 June 2026. Member States must also comply with particular obligations under Article 2 of Regulation (EU) 2024/2809 by 5 June 2026.
BACKGROUND
- Directive 2003/71/EC was designed to make it easier for companies to raise capital throughout the EU on the basis of approval from just one national supervisor. This gave a passport for prospectuses containing cross-border offers. Regulation (EU) 2017/1129, which repealed and replaced the directive, addresses the areas of legal uncertainty and unjustified administrative burdens that had emerged over time and is considered a major milestone towards a European capital markets union.
For further information, see:
KEY TERMS
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Prospectus. A legal document describing a company’s main line of business, finances and shareholding structure. Potential investors use it to decide whether to buy the securities a company offers.
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Securities. Shares, debt securities including bonds, convertible and exchangeable securities, depository receipts, derivative securities and units of closed-end funds.
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Passport. Once a prospectus has been approved in one Member State, it is valid throughout the EU (single passport for the issuers).
MAIN DOCUMENTS
Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, pp. 12–82).
Successive amendments to Regulation (EU) 2017/1129 have been incorporated into the original text. This consolidated version is of documentary value only.
Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal, and repealing Commission Delegated Regulation (EU) No 382/2014 and Commission Delegated Regulation (EU) 2016/301 (OJ L 166, 21.6.2019, pp. 1–25).
See consolidated version.
Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No 809/2004 (OJ L 166, 21.6.2019, pp. 26–176).
See consolidated version.
Commission Delegated Regulation (EU) 2021/528 of 16 December 2020 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division (OJ L 106, 26.3.2021, pp. 32–46).
RELATED DOCUMENTS
Regulation (EU) 2024/2809 of the European Parliament and of the Council of 23 October 2024 amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises (OJ L, 2024/2809, 14.11.2024).
Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (OJ L, 2023/2859, 20.12.2023).
See consolidated version.
