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Obligation to publish a prospectus

Parties offering securities such as shares or bonds are required to make an approved prospectus available. This obligation also applies to the admission of securities to trading on a regulated market such as Euronext Amsterdam. In the Netherlands, the AFM is the competent authority that approves prospectuses. The AFM checks whether a prospectus is comprehensible and consistent, and whether it contains all the information that is material for investors to make an informed investment decision, in particular regarding the financial position and prospects of the issuer and the conditions of the securities.

The Prospectus Regulation

An approved prospectus is mandatory if securities are offered to the public or admitted to trading on a regulated market in the Netherlands or another Member State of the European Union. This obligation is stipulated in the Prospectus Regulation (EU) 2017/1129. In order to determine whether such an obligation exists, the terms ‘securities’, ‘offer of securities to the public’ and, in case of admission to trading, ‘regulated market’ are of importance. These terms are defined in Article 2 of the Prospectus Regulation. The Prospectus Regulation also contains several exceptions to the obligation to publish a prospectus, the content requirements of the prospectus and the rules with respect to advertisements.
 
Certain requirements in the Prospectus Regulation are further delineated in separate Delegated Regulations. The European Commission published these Delegated Regulations on 15 March 2019:
 
Furthermore, the European Securities and Markets Authority (ESMA) published guidelines on the risk factors that have to be included in the prospectus, and Q&A’s on the Prospectus Regulation. ESMA also published guidelines on disclosure requirements under the Prospectus Regulation. These guidelines will become effective two months after the publication on ESMA’s website of the translations into all the official EU languages.
 
Read more about the prospectus legislation on the ESMA-website.

Exceptions to the obligation to publish a prospectus

Not in all situations in which securities are offered to the public or admitted to trading on a regulated market the publication of an approved prospectus is mandatory. Article 1 of the Prospectus Regulation sets out the circumstances under which an offer or admission to trading of securities does not require the publication of a prospectus.

Exceptions with respect to offers

In certain cases, publication of an approved prospectus is not mandatory for an offer of securities to the public. These cases are listed in Article 1(4) of the Prospectus Regulation. For example, an approved prospectus is not required in the following situations: 
 
  • offers addressed solely to qualified investorsOffers of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors
  • offers whose denomination per unit amounts to at least €100,000
  • offers addressed to investors who acquire securities for a total consideration of at least € 100.000 per investor
  • offers with a total consideration of less than €5 million. This exemption is subject to conditions. Further details are given below.
To determine whether the publication of a prospectus is mandatory, please read the Prospectus Regulation. We recommend you to engage professional legal advice.
 

Exceptions to admission to trading on a regulated market

In certain cases, publication of an approved prospectus is not mandatory for the admission of securities to trading on a regulated market. These cases are listed in Article 1(5) of the Prospectus Regulation. For example, an approved prospectus is not required in the following situations:
 
  • securities fungible with securities already admitted to trading on the same regulated market, provided that they represent, over a period of 12 months, less than 20% of the number of securities already admitted to trading on the same regulated market
  • shares resulting from the conversion or exchange of other securities where the resulting shares are of the same class as the shares already admitted to trading on a regulated market, provided that the resulting shares represent, over a period of 12 months, less than 20% of the number of shares of the same class already admitted to trading on the same regulated market. This exemption may not be combined with the above
  • securities offered by an employer to directors or employees
  • securities already admitted to trading on another regulated market, provided that those securities have been admitted to trading on that other regulated market for more than 18 months.