The New Prospectus Regulation Regime

The new EU Prospectus Regulation (EU/2017/1129) came into force in full on 21 July 2019.

The Prospectus Regulation has repealed and replaced the previous EU Prospectus Directive (2003/71/EC). Some of the provisions in the Regulation came into force in July 2017 and others in July 2018.

The remaining provisions, which came into force in July 2019, introduced shorter prospectuses and more concise investor information, a simplified regime for secondary issues by listed companies, a lighter prospectus for smaller companies and a fast track simplified regime for frequent issuers.

The requirements relating to prospectus summaries has changed and there is new guidance on writing risk factors. Ancillary requirements, such as those relating to advertisements and supplements, have also changed and there are new publication standards.

We have published six short briefings looking at the key changes introduced by the Prospectus Regulation, covering:

• Exemptions from the requirement to produce a prospectus;
• Summaries and key financial information;
• Risk factors;
• Disclosure and format;
• Approval and publication requirements; and
• Advertisements and supplements.

Changes to the FCA Handbook and website updates

In July 2019, the Financial Conduct Authority (FCA) published its final form Prospectus Regulation Rules Instrument 2019 to align the FCA Handbook with the new Prospectus Regulation. It replaced the Prospectus Rules with the Prospectus Regulation Rules (PRR).

Updates have also been made to the FCA's Forms and Checklist and Knowledge Base webpages for the Prospectus Regulation.

FCA Guidance Notes

The FCA published the 26^th edition of its Primary Market Bulletin in December 2019. It contained changes to the FCA Guidance Notes on the FCA Knowledge Base, to reflect the EU Prospectus Regulation. These are small changes i.e. updating terminology and rule references which are a direct consequence of the change in the prospectus regime, which do not materially affect the substance of the guidance in the respective notes.

The FCA has also deleted three technical notes which are no longer relevant given the additional information provided by the Prospectus Regulation and new European Securities and Markets Authority (ESMA) guidelines.

ESMA Prospectus Regulation Q&A

ESMA has published an updated version of its Q&A on the Prospectus Regulation (ESMA/2019/ESMA31-62-1258). The majority of the new Q&As have been updated and carried over from ESMA's Q&A on the Prospectus Directive (ESMA31-62-780). ESMA will continue to analyse the remaining PD Q&As and determine whether to carry them forward.

Disclosure Guidelines Consultation

ESMA published draft Guidance on disclosure requirements under the new Prospectus Regulation (ESMA31-62-1239) in July 2019 for consultation. The Guidelines are intended to help market participants comply with the disclosure requirements set out in Delegated Regulation (EU/2019/980) under the Prospectus Regulation regarding the format and content of prospectuses and to enhance consistency across Member States. The Guidelines will, when finalised, replace the ESMA Update to the CESR Recommendations (ESMA/2013/319).

The consultation closed on 4 October 2019 and ESMA expects to publish its final report and guidelines in Spring 2020.