What is important to note when incorporating information by reference in the prospectus?

The regulations in relation to prospectuses allow for information to be incorporated by reference. The aim hereof is to simplify and reduce the costs of drafting a prospectus. However, as set out in Consideration 30 of the Prospectus regulation ((EG) Nr. 809/2004), this aim should not be achieved to the detriment of other interests the prospectus is meant to protect.  Article 28.5 of the Prospectus regulation requires that the parties drafting the prospectus endeavour not to endanger investor protection. All information should be comprehensible and accessible to the investor.

The AFM has noted that in many instances the comprehensibility and accessibility has been at risk. Using too many separate documents causes fragmentation. In addition, it is often not easy to obtain the separate documents.

The AFM will pay particular attention to compliance with Article 28.5 of the Prospectus regulation in order to limit the number of separate documents and improve the accessibility of the information. In particular through clear identification of and reference to the separate documents. In addition, the investors should be able to easily obtain the documents.

The information incorporated by reference is as important as the information in the “main document” and should be equally accessible and comprehensible.

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