Updated ESMA Q&A and FCA approach to prospectus disclosure guidelines

ESMA has updated its Q&A on the Prospectus Regulation to include additional questions in relation to Brexit. Issues addressed in the updates to the Q&A include:

• the status of a prospectus, where it has been approved by the FCA and passported into the EU prior to the end of the transition period, once the transition period ends; and
• the need for non-EU issuers which have the UK as their home Member State for the purposes of the Prospectus Regulation to choose a different home Member State at the end of the transition period. ESMA has also updated its Q&A on the Transparency Directive to cover the choice of a home Member State under the Transparency Directive after the end of the transition period.

The updated Q&A on the Prospectus Regulation also cover:

• the identification of profit forecasts in prospectuses; and
• the exemption from the requirement to produce a prospectus where the securities being admitted represent less than 20% of securities of the same class already admitted to trading.

FCA approach to ESMA Guidelines on prospectus disclosures

ESMA published its Final Report - ESMA Guidelines on disclosure requirements under the Prospectus Regulation in July 2020 (see our corporate update 2020/15). However, the new Guidelines will not become effective before the end of the Brexit transition period on 31 December 2020 so will not become part of UK law at that point. In Primary Market Bulletin 31 (discussed at item 1 above), the FCA confirms that this means that, for prospectuses approved in the UK, issuers should continue to have regard to the old ESMA CESR Prospectus Directive Recommendations and it will consult on its approach to the new Guidelines in due course.