Prospectus regime – FCA to adopt ESMA Guidelines on the Prospectus Regulation

The FCA has published the latest edition of its Primary Market Bulletin (PMB No.34). In it, it is consulting on a guidance note adopting the Guidelines on disclosure requirements under the Prospectus Regulation published by the European Securities and Markets Authority (ESMA). It is also consulting on incorporating some of ESMA's Q&A on the Prospectus Directive into its Guidance Notes.

Although ESMA published its final report on the Guidelines in July 2020, the Guidelines did not become effective before the end of the Brexit transition period on 31 December 2020 and so did not become part of UK law at that point. Instead the FCA said that issuers should continue to have regard to the earlier ESMA update of the CESR Prospectus Directive Recommendations (see our corporate update 2020/7).

The FCA is now proposing to create a new Technical Note to adapt the ESMA Guidelines as FCA Guidance. The ESMA Guidelines will be replicated in the new Technical Note (Primary Market/TN 619.1), with two minor modifications to the Guidelines on:

• pro forma financial information where an issuer undertakes several transactions; and
• the rules for calculation of working capital for closed-ended investment funds.

The specialist issuers measures in the CESR Recommendations will also be included in the new Technical Note and there will be a number of consequential changes to other Guidance Notes.

The FCA is also consulting on incorporating in its Technical Notes some of the guidance contained in ESMA's Q&A on the Prospectus Directive (excluding any Q&A that ESMA has announced it would not be carrying forward, or which have been superseded by ESMA's Q&A on the Prospectus Regulation). The FCA says that, in the future, it will consider replacing ESMA's PR Q&As with guidance in the FCA's Technical Notes.

The consultation closes on 4 August 2021.