Hamilton Perspectives Nyhetsbrev

New prospectus regime

On 21 July 2019, a new pro­spectus re­gi­me comes in­to play in Sweden and the rest of the EU when the new pro­spectus re­gu­la­tion (2017/1129) en­ters in­to full for­ce. At the sa­me ti­me, the cur­rent pro­spectus directi­ve (2003/71/EG), pro­spectus re­gu­la­tion (809/2004) and Chapter 2 of the Swedish Financial Instruments Trading Act ce­a­se to be in for­ce. The pur­po­se of the new pro­spectus re­gu­la­tion is to en­su­re in­ve­s­tor pro­tec­tion and mar­ket ef­fi­ci­en­cy, whi­le en­han­ci­ng the in­ter­nal mar­ket for ca­pi­tal. More spe­ci­fi­cal­ly, it pro­vi­des for simp­li­fi­ed ru­les and pro­ce­du­res to be ap­pli­ed when pre­pa­ring a pro­spectus, in par­ticu­lar for small and me­dium-si­zed en­ter­pri­ses (“SMEs”).

Exemptions to the ob­li­ga­tion to pre­pa­re a pro­spectus

EU mem­ber sta­tes will con­ti­nue to be ab­le to de­ter­mi­ne their own mi­ni­mum to­tal of­fer con­si­de­ra­tion th­res­hold for when com­pa­ni­es of­fe­ring secu­ri­ti­es to the ge­ne­ral pub­lic are ob­li­ga­ted to publish a pro­spectus, ho­wever the hig­hest al­lo­wed th­res­hold is incre­a­sed from to­day’s EUR 5,000,000 to EUR 8,000,000. Sweden will con­ti­nue to use a mi­ni­mum th­res­hold of EUR 2,500,000. Offers of secu­ri­ti­es ad­d­res­sed to in­ve­stors who ac­qui­re secu­ri­ti­es for a to­tal con­si­de­ra­tion of at le­ast EUR 100,000 per in­ve­s­tor, con­ti­nue to be ex­empt from the pro­spectus ob­li­ga­tion, as well as of­fers to fewer than 150 per­sons ot­her qua­li­fi­ed in­ve­stors per mem­ber sta­te.

A change, which has al­re­a­dy be­en im­ple­men­ted, is that an is­su­er do­es not ha­ve to publish a pro­spectus for the ad­mis­sion to tra­ding of ad­di­tio­nal secu­ri­ti­es of the sa­me class if such secu­ri­ti­es amount to not mo­re than 20% (com­pa­red to pre­viously 10%) of the num­ber of secu­ri­ti­es al­re­a­dy ad­mitted to the sa­me re­gu­la­ted mar­ket (cal­cu­la­ted over a 12-month pe­ri­od). This will fa­ci­li­ta­te direc­ted sha­re is­sues and ot­her ca­pi­tal ra­i­sings not be­ing of­fe­red to the ge­ne­ral pub­lic.

Simplified ru­les for cer­tain is­su­ers (EU Growth pro­spectus)

The new pro­spectus re­gu­la­tion pro­vi­des less com­plex requi­re­ments for smal­ler com­pa­ni­es by in­tro­du­cing so-cal­led EU Growth pro­spectu­ses, which will be avai­lab­le for the following com­pa­ni­es, pro­vi­ded that they do not ha­ve secu­ri­ti­es ad­mitted to tra­ding on a re­gu­la­ted mar­ket (re­gu­la­ted mar­kets in Sweden are Nasdaq Stockholm and NGM Equity):

  1. SMEs, which are de­fi­ned as com­pa­ni­es that ful­fil at le­ast two of the following th­ree cri­te­ria:
  • an ave­rage num­ber of employe­es du­ring the fi­nan­ci­al ye­ar of less than 250;
  • a to­tal ba­lan­ce she­et not ex­cee­ding EUR 43,000,000; and
  • an an­nu­al net tur­no­ver not ex­cee­ding EUR 50,000,000.

 

  1. Issuers, ot­her than SMEs, who­se secu­ri­ti­es are tra­ded or are to be tra­ded on an SME growth mar­ket and ha­ve an ave­rage mar­ket ca­pi­ta­li­sa­tion of less than EUR 500,000,000. An SME growth mar­ket is a mar­ket pro­vi­ding ac­cess to ca­pi­tal for SMEs. Nasdaq in­tends to ap­p­ly for such sta­tus for its MTF First North, with ef­fect from July 2019. Spotlight Stock Market and NGM Nordic MTF ha­ve not ap­pli­ed for sta­tus as an SME growth mar­ket.

 

  1. Unlisted is­su­ers of­fe­ring secu­ri­ti­es to the ge­ne­ral pub­lic of a to­tal con­si­de­ra­tion of less than EUR 20,000,000, cal­cu­la­ted over a pe­ri­od of 12 mont­hs, pro­vi­ded that such is­su­ers ha­ve an ave­rage num­ber of less than 500 employe­es du­ring the pre­vious fi­nan­ci­al ye­ar.

Simplified ru­les for al­re­a­dy lis­ted is­su­ers

The new pro­spectus re­gu­la­tion al­so ena­bles is­su­ers, who­se secu­ri­ti­es ha­ve be­en ad­mitted to tra­ding for at le­ast 18 mont­hs on a re­gu­la­ted mar­ket or an SME growth mar­ket, that wish to is­sue ad­di­tio­nal sha­res or ra­i­se lo­an ca­pi­tal to pre­pa­re a simp­li­fi­ed pro­spectus.

Further, a uni­ver­sal re­gi­stra­tion docu­ment is in­tro­du­ced to en­su­re fast re­gu­la­to­ry ap­pro­val for com­pa­ni­es that fre­quent­ly is­sue secu­ri­ti­es.

Content of the pro­spectus

Certain changes re­la­ting to the con­tent of the pro­spectus in the new pro­spectus re­gu­la­tion in­clu­de the following:

  • When drafting a pro­spectus, the ma­te­ri­a­li­ty of all risk factors must be as­ses­sed ba­sed on the pro­ba­bi­li­ty of their oc­cur­rence and the ex­pec­ted mag­ni­tu­de of their ne­ga­ti­ve im­pact. The risk factors shall be pre­sen­ted in a li­mi­ted num­ber of ca­te­go­ri­es and in each ca­te­go­ry, the most ma­te­ri­al risk factor shall be men­tio­ned first.
  • Summaries will nor­mal­ly need to be li­mi­ted to se­ven pa­ges and shall con­tain four main sec­tions ((1) an in­tro­duc­tion, con­tai­ning war­nings, (2) key in­for­ma­tion on the is­su­er, (3) key in­for­ma­tion on the secu­ri­ti­es, and (4) key in­for­ma­tion on the of­fer of secu­ri­ti­es to the pub­lic and/or the ad­mis­sion to tra­ding on a re­gu­la­ted mar­ket) and a num­ber of sub-sec­tions. The num­ber of risk factors in­clu­ded in the sum­ma­ry may not ex­ceed 15.

On 14 March 2019, the European Commission published a de­le­ga­ted re­gu­la­tion, in­clu­ding an­nex­es, to sup­ple­ment the new pro­spectus re­gu­la­tion, which con­tains mo­re de­tai­led ru­les on the for­mat, con­tent, scru­tiny and ap­pro­val of the pro­spectus. It re­mains ho­wever to be seen how the Swedish Financial Supervisory Authority will in­ter­pret and ap­p­ly the new pro­spectus ru­les.