Ares(2018)2169999

ROADMAP
Roadmaps aim to inform citizens and stakeholders about the Commission's work to allow them to provide feedback and to participate effectively in future consultation activities. Citizens and stakeholders are in particular invited to provide views on the Commission's understanding of the problem and possible solutions and to share any relevant information that they may have.
Title of the initiative	A simplified prospectus for companies and investors in Europe
Lead DG – responsible unit	DG FISMA - C3
Likely Type of initiative	Commission Delegated Regulation
Indicative Planning	Q4 2018
Additional Information	https://ec.europa.eu/info/business-economy-euro/banking-and-finance/financial-markets/securities-markets/securities-prospectus_en
This Roadmap is provided for information purposes only. It does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content. All elements of the initiative described by the Roadmap, including its timing, are subject to change.

A. Context, problem definition and subsidiarity check

Context

Most companies that want to raise capital through public offers or have securities admitted to be traded on regulated markets need to provide investors with a prospectus. A prospectus is a legal document that describes the company, its main line of business, finances and shareholding structure and the securities that are being offered and/or admitted to trading. It contains the information an investor needs before making a decision whether to invest in the company's securities (such as shares, bonds, derivatives).

In the context of the Capital Markets Union Action Plan, the Prospectus regime is undergoing a substantial reform. The new Prospectus Regulation 2017/1129 entered into force on 20 July 2017 and will be applicable in full as of 21 July 2019.

Certain elements of this "level 1" Regulation need to be further specified in a delegated act, to be adopted by the Commission by 21 January 2019.

Problem the initiative aims to tackle

The recently established Prospectus Regulation creates a new and harmonised set of rules that supports companies raising money on capital markets to invest and grow and at the same time helps investors make better and more informed decisions.

It is the objective of this Delegated Regulation to complement the "single prospectus rulebook". Without such further specification the provisions of the Prospectus Regulation could be interpreted and applied differently by national competent authorities. This concerns:

• the reduced content and standardised format and sequence for the EU Growth prospectus;

• the format of the standard prospectus, the base prospectus and the final terms, and the schedules defining the specific information which must be included in a prospectus;

• the reduced information to be included in the schedules applicable under the simplified disclosure regime for secondary issuances;

• the schedule defining the minimum information contained in the universal registration document;

• the criteria for the scrutiny of the universal registration document and its amendments, and the procedures for the approval and the filing and review of those documents;

Basis for EU intervention (legal basis and subsidiarity check)

Articles 9(14), 13 (1), 13 (2), 14 (3), 15(2) and 20(11) of Regulation (EU) No 2017/1129 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, empower the Commission to adopt delegated acts, complementing and further specifying technical elements of the Regulation.

The Delegated Act will ensure a harmonised interpretation and application of the technical details of the Prospectus regime. This could not be achieved by action at national level.

B. What does the initiative aim to achieve and how

The objective of the Delegated Act is to ensure a harmonised interpretation and application of the technical details of the new Prospectus regime by national competent authorities and companies making a public offer or seeking admission of their securities to regulated markets.

It will do so be complementing the policy framework laid down in the Regulation with more details and clarifications for those elements where the legislator has empowered the Commission to do so.

These details concern:

• the reduced content and standardised format and sequence for the EU Growth prospectus, as well as the reduced content and the standardised format of the specific summary. An EU Growth prospectus under the proportionate disclosure regime will have a standardised format which is easy for issuers to complete. The EU Growth prospectus summary shall not impose additional burdens or costs on issuers. It shall only require the relevant information already included in the EU Growth prospectus;

• the format of the prospectus, the base prospectus and the final terms, and the schedules defining the specific information which must be included in a prospectus, thereby avoiding duplication of information when a prospectus is composed of separate documents;

When drafting the Delegated Act account will be taken of:

(a) the various types of information needed by investors relating to equity securities as compared with non-equity securities; a consistent approach shall be taken with regard to information required in a prospectus for securities which have a similar economic rationale, notably derivative securities;

(b) the various types and characteristics of offers and admissions to trading on a regulated market of non-equity securities;

(c) the format used and the information required in base prospectuses relating to non-equity securities, including warrants in any form;

(d) where applicable, the public nature of the issuer;

(e) where applicable, the specific nature of the activities of the issuer.

• the reduced information to be included in the schedules applicable under the simplified disclosure regime for secondary issuances; taking into account the need to facilitate fundraising on capital markets and the importance of reducing the cost of capital. In order to avoid imposing unnecessary burdens on issuers, when specifying the reduced information, the information which an issuer is already required disclosing under Directive 2004/109/EC, where applicable, and Regulation (EU) No 596/2014, shall be taken into account. The Delegated Act will also calibrate the reduced information so that it focusses on the information that is relevant for secondary issuances and is proportionate.

• the schedule defining the minimum information contained in the universal registration document (URD); The Delegated Act will aim to ensure that the URD contains all the necessary information on the issuer so that the same URD can be used equally for the subsequent offer to the public or admission to trading on a regulated market of equity or non-equity securities. With regard to the financial information, the operating and financial review and prospects and the corporate governance, the Delegated Act will align those as much as possible with the information required to be disclosed in the annual and half-yearly financial reports referred to in Articles 4 and 5 of Directive 2004/109/EC, including the management report and the corporate governance statement.

• the criteria for the scrutiny of the URD and its amendments, and the procedures for the approval and filing and review of those documents; which will take into account the fact that the objectives and criteria of the ex-post review of URD are aligned with those of an ex-ante scrutiny and relate to the completeness, the consistency and the comprehensibility of the information provided by the issuer.

• the criteria for the scrutiny of prospectuses, in particular the completeness, comprehensibility and consistency of the information contained therein, and the procedures for the approval of the prospectus. Aiming at creating a single rulebook that ensures a coherent implementation throughout the EU. The practices of competent authorities concerning scrutiny and approval should be aligned so as to avoid supervisory forum shopping. The criteria will accommodate a proportionate approach by competent authorities in the scrutiny of prospectuses based on the specific circumstances of the issuer and the issuance.

C. Better regulation

Consultation of citizens and stakeholders

Before presenting a legislative proposal concerning the reform of the Prospectus regime, the Commission carried out a public consultation in the first half of 2015.

Moreover, the content of the Delegated Act will be based on technical advice received from the European Securities Market Authority (ESMA). Before presenting its advice to the European Commission, ESMA carried out a public consultation on the topics covered by the Delegated Regulation from 6 July to 28 September 2017.

In addition, the technical advice will be produced by ESMA working groups which comprise all interested national competent authorities from the Member States.

Finally, in March 2017, the Commission organised a workshop with stakeholders to exchange views and collect ideas as regards the level 2 provisions of the revised prospectus regime.

Evidence base and data collection

The evidence base for this initiative consists of a number of elements:

·Data generated in the context of the Impact Assessment that was carried out in 2015 in relation to the reform of the prospectus regime;

·A cost-benefit analysis provided by ESMA, as part of its technical advice;

·Evidence resulting from the public consultation carried out by ESMA in the summer of 2017;

·The outcome of the workshop with stakeholders organised in March 2017.

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