On 4 December 2019, the European Securities and Markets Authority (ESMA) published its final report on the draft regulatory technical standard (RTS) amending the Prospectus RTS Regulation, which contains RTSs under the new Prospectus Regulation. The Prospectus RTS Regulation outlines the key financial information needed for the prospectus summary, the data for classification and publication of prospectuses, the supplements to prospectuses, the advertisements of securities and the functioning of the notification portal.
The draft RTS, found in ESMA’s final report, comprises of minor amendments that have been made to the Prospectus RTS Regulation including:
- pursuant to Article 18 of the Prospectus RTS Regulation, issuers of securities convertible or exchangeable into third party shares are required to publish a supplement to their prospectus. By contrast, the regulation replaced by the Prospectus RTS Regulation did not require the publication of a supplement in those situations. As the Prospectus RTS Regulation did not intend to increase the legal requirements for issuers of securities convertible or exchangeable into third party shares by asking them to publish a supplement, and given that those rules worked well and have not altered the level of investor protection, all references to issuers of securities convertible or exchangeable into third party shares should be removed from the list in Article 18(1); and
- in table 3 (Cash flow statement for non-financial entities (equity securities)) of Annex I to the Prospectus RTS Regulation, an additional column relating to the cash flow information for the two years prior to the year of prospectus is inserted because the third year of cash flow information was omitted from the key financial information in the summaries of prospectuses. This means that cash flow information is included for each year covered by the historical financial information that is included in the prospectus.
ESMA will submit the final report containing the draft RTS to the European Commission.