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Changes 2019 For Issuers of securities

New requirements for prospectuses have become applicable per 21 July 2019. As of that date, the new Prospectus Regulation (EU) 2017/1129 repealed and replaced the Prospectus Directive 2003/71/EC. An overview of several important changes that affect the content of the prospectus is provided here.

The Prospectus Directive 2003/71/EG is still applicable to prospectuses that have been approved before 21 July 2019 and which are currently valid. If you have any questions regarding the Prospectus Regulation, then please send an e-mail to prospectusregulation@afm.nl.


Form of the summary

The mandatory table of elements prescribing the information that must be included in the summary no longer applies. The new Prospectus Regulation requires that the summary consists of four sections with, respectively, an introduction containing warnings, key information on the issuer, key information on the securities, and key information on the offer of securities to the public and/or the admission to trading on a regulated market. The Prospectus Regulation provides further specifications on the exact information to be included in these sections. The summary must also include key financial information. The definition of key financial information is provided in the Prospectus Regulation and the supplementary Delegated Regulations.

Length of the summary

Under the new Prospectus Regulation, the summary may not exceed 7 pages in length.

Comprehensibility and use of language in the summary

The summary must be presented and laid out in a way that is easy to read, with clear, non-technical, concise language that is comprehensible for investors. Technical formulations are not permitted. The requirements with respect to comprehensibility can necessitate that prospectus texts cannot be copied word for word into the summary, but may have to be formulated in more straightforward terms.

The risk factors

The new Prospectus Regulation also requires that the prospectus includes all risks that are material for investors and are specific to the issuer. A new feature is that the risk factors must be categorised and the most material risks in each category must be listed first. The new Prospectus Regulation also provides additional requirements regarding the description of risks. The European Securities and Markets Authority (ESMA) has published guidelines for the assessment of risk factors by the AFM. These guidelines can also be useful in the formulation of the risk factors.

Comprehensibility of the prospectus

Additional requirements are set with respect to comprehensibility. The prospectus must be written in plain language and unnecessary reiterations of information is not permitted. The prospectus must also be structured in a way to ensure that it is comprehensible and all related information is grouped together. All additional requirements with respect to comprehensibility can be found in the Delegated Regulations.

These changes are only a few examples of all the amendments to the prospectus legislation. For more (new) requirements applying to prospectuses, please see the Prospectus Regulation and the Delegated Regulations.

Rules for advertisements

Advertisements published in connection with offers subject to a prospectus requirement must comply with certain rules. The new Prospectus Regulation and Delegated Regulations provide new additional rules. For instance, the word ‘advertisement’ must be shown in a prominent place, and a warning must be included if reference is made to the fact that the prospectus has been approved by the AFM. Further information on the new advertisements requirements you can find on the 'advertisementpage'.

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