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Prospectuses for investors – Simplifying equity-raising during the pandemic [EU Legislation in Progress]

Written by Angelos Delivorias (1st edition),

A prospectus is a legally required document presenting information about a company and the securities that it offers to the public or seeks to admit to trading on a regulated market. The relevant EU legislation consists of a directive, adopted in 2003, amended in 2010, and finally replaced by a regulation in 2017. Drawing up a prospectus entails time and costs, which in the current economic context may deter issuers in distress from seeking to raise new funds, in particular equity. To remedy this, the Commission proposed to amend Regulation (EU) 2017/1129. These amendments aim at creating a temporary (18 month) regime for a short-form prospectus and to simplify the procedure for issuers (so that they can rapidly raise capital), as well as to release pressure on financial intermediaries.

The Council published its negotiating mandate on 16 October 2020. The European Parliament’s Committee on Economic and Monetary Affairs (ECON) ‘is expected to vote on adoption of its report on 19 November 2020.

Complete version

Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2017/1129 as regards the EU recovery prospectus and targeted adjustments for financial intermediaries to help the recovery from the Covid‑19 pandemic
Committee responsible: Economic and Monetary Affairs (ECON) COM(2020) 281 final
Rapporteur: Ondřej Kovařík (Renew, Czechia) 2020/0155(COD)
Shadow rapporteurs: Sirpa Pietikäinen (EPP, Finland)
Alfred Sant (S&D, Malta)
Jörg Meuthen (ID, Germany)
Ernest Urtasun (Greens/EFA, Spain)
Eugen Jurzyca (ECR, Slovakia)
José Gusmão (GUE/NGL, Portugal)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Adoption of report in committee

EU Legislation in progress timeline

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