Revised thresholds for Prospectus Exemptions

04 / 07 / 2018

The new UK prospectus regulations (UK statutory instrument) were published on 29 June 2018. Confusingly, these raise one of the thresholds for public offers that are exempt from the obligation to publish a prospectus and lower one of the thresholds for excluded securities. These changes come into force on 21 July 2018.

The Financial Services and Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 (the UK Regulations) implement two provisions of the new EU prospectus regulation ((EU) 2017/1129) (the EU Prospectus Regulation) in the UK:

Maximum consideration exemption. Currently, an offer where the total consideration for the transferable securities being offered to the public in the EEA does not exceed €100,000 is exempt from the requirement to publish a prospectus (section 86(1)(e) of FSMA 2000). The UK Regulations, implementing Art 3(2) of the EU Prospectus Regulation, raise this threshold to €8,000,000.

Note, however, that this exemption only applies to the offer trigger for a prospectus. A prospectus will still be required for the admission to trading of the securities unless there is an applicable exemption.

Excluded transferable securities. Currently, transferable securities included in an offer to the public where the total consideration for the transferable securities being offered in the EEA is less than €5,000,000 are excluded from the requirement to publish a prospectus (see para 9(1) of Schedule 11A to FSMA 2000). The UK Regulations lower this threshold to €1,000,000.

This provision implements Art 1(3) of the EU Prospectus Regulation which gives member states discretion to require other disclosure requirements at national level. The UK has chosen not to make use of this option.

For further information please contact Marlies Braun.

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