| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2015) 583 final (30.11.15) |
| Publication Date | 30/11/2015 |
| Content Type | Policy-making |
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The revision of the Prospectus Directive is an important step to build the Capital Markets Union. The harmonised EU prospectus is the "gateway" for issuers in need of finance to gain access to European capital markets. A reform of the prospectus rules was announced in the Investment Plan for Europe as part of the third pillar for improving the business environment and represents a key element of the Capital Markets Union. The Capital Markets Union Action Plan presents a comprehensive and ambitious programme of measures to strengthen the role of market-based finance in the European economy. Prospectuses are legally required documents presenting information about a company. This information aims to be the basis on which investors can decide whether to invest in a variety of securities issued by that company. It is therefore crucial that the prospectus does not act as an unnecessary barrier to accessing public markets to raise capital. In particular, SMEs can be deterred from offering securities to the public simply because of the paperwork involved and the high costs incurred. It should become easier for firms to fulfil their administrative obligations, but in a way that investors are still well informed about the products they are investing in. Although the prospectus regime functions well overall, certain requirements of the Prospectus Directive might still be improved to alleviate administrative burden for companies which draw up a prospectus (especially SMEs) and to make the prospectus a more valuable information tool for potential investors. Further alignment of the prospectus rules with other EU disclosure rules (e.g. the Transparency Directive and the Regulation on key information documents for packaged retail and insurance-based investment products (PRIIPs) could enhance the efficiency of the prospectus. The review of the Prospectus Directive is singled out in the Capital Markets Union Action Plan as one of its early and high-priority actions. Its overarching rationale is to reduce one of the principal regulatory hurdles that issuers face when offering their equity and debt securities to the investing public. This proposal contributes to the objective of screening the acquis to identify specific areas where rules can be simplified, burdens reduced and costs saved. For that reason, the Commission's impact assessment builds on the findings of an evaluation which was conducted in the context of the Regulatory Fitness and Performance programme. The revision of the Prospectus Directive pursues a simple goal: provide all types of issuers with disclosure rules which are tailored to their specific needs while making the prospectus a more relevant tool of informing potential investors. In consequence, the proposal puts special emphasis on four groups of issuers: (1) issuers already listed on a regulated market or an SME growth market, which want to raise additional capital by means of a secondary issuance, (2) SMEs, (3) frequent issuers of all types of securities and (4) issuers of non-equity securities. It also intends to further incentivise the use of the cross-border "passport" for approved prospectuses, which was introduced by the Prospectus Directive. The proposed measures should (i) reduce the administrative burden of drawing up of prospectus for all issuers, in particular for SMEs, frequent issuers of securities and secondary issuances; (ii) make the prospectus a more relevant disclosure tool for potential investors, especially in SMEs; and (iii) achieve more convergence between the EU prospectus and other EU disclosure rules. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:583:FIN |
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| Subject Categories | Business and Industry |
| Countries / Regions | Europe |
