Thursday January 2 2014
News Source: Fund Regulation
Focus: General - Fund Regulation
Type: General
Country: European Union
The European Securities and Markets Authority (ESMA) has delivered an Opinion on the format of the base prospectus and consistent application of Article 26(4) of the Prospectus Regulation.
Article 5(3) of Directive 2003/71/EC (the Prospectus Directive) sets out two alternative formats for a prospectus; a single document or a tripartite document composed of three separate documents: a registration document, a securities note and a summary.
ESMA has concluded that the base prospectus shall not be drawn up as a tripartite prospectus and any incorporation by reference of relevant information should comply with the conditions set out in the Regulation. In the opinion of ESMA, the overall prospectus regime does not provide the necessary legal framework for the possibility of a tripartite base prospectus and changes to both the Prospectus Directive and Regulation, other than those amendments introduced by Directive 2010/73/EU, would have been required to facilitate such a construct. Furthermore, the “choice” of the issuer, referred to in Article 26(4) of the Regulation, is whether to draw up a base prospectus and not whether to incorporate the registration document by reference.
ESMA will examine compliance with the provisions of Article 26(4) of the Regulation nine months following the publication of the opinion and may at that point pursue non-compliant national competent authorities under Article 17 of the ESMA Regulation.
In the interim period, should ESMA become aware of any notifications under Article 18 of the Prospectus Directive of a base prospectus drawn up in non-compliance with Article 26(4) of the Regulation (with the exception of notification of any supplements to base prospectuses already notified at the time of publication of this opinion), it may consider expediting its examination of non-compliant practices.
Click on the above link for the Opinion.