BETA


2020/0155(COD) EU Recovery prospectus and targeted adjustments for financial intermediaries to help the recovery from the COVID-19 pandemic

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON KOVAŘÍK Ondřej (icon: Renew Renew) PIETIKÄINEN Sirpa (icon: EPP EPP), SANT Alfred (icon: S&D S&D), MEUTHEN Jörg (icon: ID ID), URTASUN Ernest (icon: Verts/ALE Verts/ALE), JURZYCA Eugen (icon: ECR ECR), GUSMÃO José (icon: Confederal Group of the European United Left Confederal Group of the European United Left)
Committee Opinion IMCO JORON Virginie (icon: ID ID) Dita CHARANZOVÁ (icon: RE RE), Andreas SCHWAB (icon: PPE PPE), Marcel KOLAJA (icon: Verts/ALE Verts/ALE), Eugen JURZYCA (icon: ECR ECR), Adriana MALDONADO LÓPEZ (icon: S&D S&D)
Lead committee dossier:
Legal Basis:
TFEU 114

Events

2021/02/26
   Final act published in Official Journal
2021/02/16
   CSL - Draft final act
Documents
2021/02/16
   CSL - Final act signed
2021/02/16
   EP - End of procedure in Parliament
2021/02/15
   EP/CSL - Act adopted by Council after Parliament's 1st reading
2021/02/11
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 585 votes to 50, with 55 abstentions, a legislative resolution on the 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.

As a reminder, the amendments to the Prospectus Regulation aim to create the EU Recovery Prospectus as a short form prospectus and to introduce targeted adjustments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic.

Parliament adopted its position at first reading in accordance with the ordinary legislative procedure by amending the Commission proposal as follows:

EU Recovery Prospectus

The new simplified prospectus, known as the ‘EU Recovery Prospectus’, while addressing to the economic and financial challenges specifically raised by the COVID-19 pandemic, should be easy to produce for issuers, easy to understand for investors, in particular retail investors, who wish to finance issuers, and easy to scrutinise and approve for the competent authorities.

Under the amended text, offerors of shares admitted to trading on a regulated market or an SME growth market without interruption for at least the last 18 months would be able to choose to draw up an EU recovery prospectus under the simplified regime.

The use of the EU Recovery prospectus should therefore be limited to offers comprising no more than 150 % of outstanding capital.

As the EU Recovery prospectus regime is limited to the recovery phase, that regime should expire by 31 December 2022.

Less information

The prospectus should contain the relevant reduced information which is necessary to enable investors to understand:

- the prospects and financial performance of the issuer and the significant changes in the financial and business position of the issuer that have occurred since the end of the last financial year, if any;

- its financial and non-financial long-term business strategy and objectives, including, if applicable, a specific reference of not less than 400 words to the business and financial impact of the COVID-19 pandemic on the issuer and the anticipated future impact of the same;

- the essential information on the shares, including the rights attached to those shares and any limitations on those rights, the reasons for the issuance and its impact on the issuer, including on the overall capital

structure of the issuer, as well as a disclosure of capitalisation and indebtedness, a working capital statement, and the use of proceeds.

Right of withdrawal

Where the prospectus relates to an offer of securities to the public, investors who have already agreed to purchase or subscribe for the securities before the supplement is published should have the right, exercisable within three working days after the publication of the supplement, to withdraw their acceptances, provided that the significant new factor, material mistake or material inaccuracy arose or was noted before the closing of the offer period or the delivery of the securities, whichever occurs first.

The supplement shall contain a prominent statement concerning the right of withdrawal.

In order to provide relief and free-up resources for financial intermediaries while maintaining a high level of investor protection, it is specified that financial intermediaries should contact investors who

purchase or subscribe securities at the latest at the closing of the initial offer period.

Evaluation report

Parliament specified that the report should include, inter alia:

- an estimate of the actual additional market capitalisation mobilised by EU Recovery prospectuses at the date of issue in order to gather experience about the EU Recovery prospectus for post-evaluation;

- an indication of the overall financial savings achieved and cost reductions still possible, and the total costs of compliance with the Regulation for issuers, offerors and financial intermediaries and a calculation of these costs as a percentage of operational costs;

- an analysis of whether it is appropriate to extend the duration of the EU recovery prospectus regime and whether the planned measures have achieved the objective of providing more clarity and flexibility for financial intermediaries and investors alike.

Documents
2021/02/10
   EP - Debate in Parliament
2021/01/14
   EP - Approval in committee of the text agreed at 1st reading interinstitutional negotiations
2020/12/16
   CSL - Coreper letter confirming interinstitutional agreement
2020/11/25
   EP - Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
2020/11/23
   EP - Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
2020/11/19
   EP - Vote in committee, 1st reading/single reading
2020/11/19
   EP - Committee report tabled for plenary, 1st reading/single reading
Details

The Committee on Economic and Monetary Affairs on the 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.

As a reminder, the amendments to the Prospectus Regulation aim to create the EU Recovery Prospectus as a short form prospectus and to introduce targeted adjustments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic.

The committee recommended that the European Parliament’s position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:

Duration of the derogation

Under the amended text, the EU Recovery prospectus is limited to the recovery phase, the regime of this prospectus should expire by 31 December 2022.

EU Recovery Prospectus

Companies that have had shares admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months could choose to draw up an EU recovery prospectus under the simplified regime.

The prospectus should contain the relevant simplified information necessary for investors to understand:

- the prospects and financial performance of the issuer and the significant changes in the financial and business position of the issuer that have occurred since the end of the last financial year, if any, as well as its long term business strategy and objectives, both financial and non-financial; the issuer should include, if applicable, a specific reference of not less than 400 words to the financial and business impact of COVID-19 on the issuer and a statement regarding the anticipated future impact of the same;

- the essential information on the shares, the rights attached to the shares, including any limitations on those rights, the reasons for the issuance and its impact on the overall capital structure of the issuer, disclosure of capitalisation and indebtedness, a working capital statement, and the use of proceeds.

The information contained in the EU Recovery prospectus should enable investors, especially non-professional investors, to make an informed investment decision.

Right of withdrawal

Where the prospectus relates to an offer of securities to the public, investors who have already agreed to purchase or subscribe for the securities before the supplement is published should have the right, exercisable within three working days after the publication of the supplement, provided that the significant new factor, material mistake or material inaccuracy arose or was noted before the closing of the offer period or the delivery of the securities, whichever occurs first.

The right to withdraw is exercisable within three working days of the publication of the supplement.

Evaluation report

The report should include, inter alia, the following:

- the number of EU Growth prospectuses approved and an analysis of the evolution of such number, as well as an estimate of the actual additional market capitalisation mobilised by such prospectuses at the point of issue in order to gather experience about the EU Recovery prospectus for post-evaluation;

- the cost of preparing and having an EU Recovery prospectus approved compared to the current costs for a standard prospectus, a secondary issuance prospectus and an EU Growth prospectus, together with an indication of the overall financial savings achieved and of which costs could be further reduced, and the total costs of complying with this Regulation for issuers, offerors and financial intermediaries together with the calculation of those costs as a percentage of operational costs.

Documents
2020/11/19
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
2020/11/11
   EP - Committee opinion
Documents
2020/10/29
   EP - Amendments tabled in committee
Documents
2020/10/27
   PT_PARLIAMENT - Contribution
Documents
2020/10/23
   ES_PARLIAMENT - Contribution
Documents
2020/10/08
   EP - Committee draft report
Documents
2020/09/14
   EP - Committee referral announced in Parliament, 1st reading/single reading
2020/09/07
   EP - KOVAŘÍK Ondřej (Renew) appointed as rapporteur in ECON
2020/09/02
   EP - JORON Virginie (ID) appointed as rapporteur in IMCO
2020/07/27
   EC - Document attached to the procedure
2020/07/24
   EC - Legislative proposal published
Details

PURPOSE: to create a new simplified prospectus (the ‘EU Recovery Prospectus’) and to introduce targeted changes for financial intermediaries to support recovery from the COVID-19 pandemic.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: Regulation (EU) 2017/1129 of the European Parliament and of the Council lays down the requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market in the Union.

In order to swiftly address the serious economic impact of the COVID-19 pandemic, measures shall be introduced to facilitate investment in the real economy, to promote rapid recapitalisation of companies in the EU and enable issuers to tap into public stock markets at an early stage of the recovery process. To achieve these objectives, the Commission proposes to create a new simplified prospectus for known issuers, designed to facilitate the raising of capital on stock markets.

This legislative proposal on amendments to the Prospectus Regulation is part of a ‘Capital Markets Stimulus Package’ aimed at facilitating economic recovery post-COVID-19, which also includes legislative proposals to amend the Markets in Financial Instruments Directive (MiFID II) and the Capital Requirements Regulation .

CONTENT: the amendments to the Prospectus Regulation aim to create the EU recovery prospectus as a short form prospectus and to introduce targeted amendments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic. In particular, the aim is to help companies raise capital more easily and, therefore, reduce their debt-to-equity ratios, thereby helping them stay solvent.

EU Recovery prospectus

The objective of the EU Recovery prospectus is to provide listed issuers with simplified disclosure rules that are tailored to their specific needs in a post-crisis environment while maintaining the prospectus as a relevant tool for informing potential investors.

This shortened prospectus, reduced to a maximum of 30 pages:

- shall be easy to produce for issuers, easy to read for investors and easy to scrutinise for national competent authorities;

- shall focus on the essential information investors need to make informed decisions and may be used by issuers who have been listed for at least 18 months and who wish to issue shares;

- shall benefit from the EU passport mechanism, which means that all EU investors who wish to do so all be able to finance companies using it.

The deadline for approving the EU's recovery prospectus shall be reduced to 5 working days to allow issuers to quickly seize opportunities to raise capital.

Financial intermediaries

A second set of targeted changes aims to alleviate the pressure on financial intermediaries (such as commercial and investment banks) which play a key role in financing the recovery of the real economy.

- Firstly, the proposal clarifies the obligations of financial intermediaries with regard to the ‘supplements’ that must be published in addition to the prospectus under certain conditions, when a new factor or a material mistake or inaccuracy in the information contained in the prospectus is identified.

After the publication of a supplement, the financial intermediary shall only contact investors with a withdrawal right. The proposal also extends the time limit for financial intermediaries to contact investors to 1 working day from the publication of the supplement and extends the period during which a right of withdrawal may be exercised by investors to 3 working days from the publication of the supplement.

- Secondly, the proposed amendments aim to support the financing of credit institutions in the takeover phase by increasing the threshold for the exemption from the obligation to publish a prospectus for certain types of securities offers. The Commission therefore proposes a targeted increase of the threshold from EUR 75 million to EUR 150 million per credit institution over a 12-month period.

Temporary scheme

The EU Recovery prospectus aims to facilitate recapitalisation during the recovery phase. It is therefore a temporary scheme that would expire 18 months after the date of application of the Regulation. The Commission shall, by 21 July 2022 at the latest, present a report on the application of the Regulation, accompanied, if appropriate, by a legislative proposal.

Documents

Votes

Prospectus de relance de l’Union et ajustements ciblés pour les intermédiaires financiers, destinés à soutenir la reprise après la pandémie de COVID-19 - EU Recovery prospectus and targeted adjustments for financial intermediaries to help the recovery from the COVID-19 pandemic - EU-Wiederaufbauprospekt und gezielte Anpassungen für Finanzintermediäre zur Unterstützung der wirtschaftlichen Erholung von der COVID-19-Pandemie - A9-0228/2020 - Ondřej Kovařík - Accord provisoire - Am 2

2021/02/10 Outcome: +: 585, 0: 55, -: 50
DE FR PL ES IT RO NL HU BG BE AT CZ SE SK PT DK LT FI HR LV SI MT LU EL IE EE CY
Total
91
77
50
58
74
33
28
21
17
21
19
20
20
14
21
14
11
14
12
8
8
6
6
21
13
7
6
icon: PPE PPE
181

Denmark PPE

For (1)

1

Latvia PPE

2

Malta PPE

2

Luxembourg PPE

2

Estonia PPE

For (1)

1
2
icon: S&D S&D
142

Lithuania S&D

2

Latvia S&D

2

Slovenia S&D

2

Luxembourg S&D

For (1)

1

Greece S&D

2

Estonia S&D

2

Cyprus S&D

2
icon: Renew Renew
97

Italy Renew

For (1)

1

Hungary Renew

2

Austria Renew

For (1)

1
3

Slovakia Renew

2

Lithuania Renew

1

Finland Renew

3

Croatia Renew

For (1)

1

Latvia Renew

For (1)

1

Slovenia Renew

2

Luxembourg Renew

2

Ireland Renew

2

Estonia Renew

3
icon: Verts/ALE Verts/ALE
71

Poland Verts/ALE

For (1)

1

Spain Verts/ALE

3

Netherlands Verts/ALE

3

Belgium Verts/ALE

3

Austria Verts/ALE

3

Czechia Verts/ALE

3

Sweden Verts/ALE

3

Portugal Verts/ALE

1

Denmark Verts/ALE

2

Lithuania Verts/ALE

2

Finland Verts/ALE

3

Latvia Verts/ALE

1

Luxembourg Verts/ALE

For (1)

1

Ireland Verts/ALE

2
icon: ECR ECR
61

Romania ECR

1

Bulgaria ECR

2
3

Lithuania ECR

1

Croatia ECR

For (1)

1

Latvia ECR

2

Greece ECR

1
icon: ID ID
73

Netherlands ID

Against (1)

1

Austria ID

3

Czechia ID

Against (1)

Abstain (1)

2

Denmark ID

For (1)

1

Finland ID

2

Estonia ID

Against (1)

1
icon: NI NI
27

Germany NI

Against (1)

2

Netherlands NI

1

Hungary NI

1

Slovakia NI

Abstain (1)

2

Lithuania NI

1

Croatia NI

Against (1)

Abstain (1)

2
icon: The Left The Left
38

Germany The Left

Abstain (1)

4

Netherlands The Left

Against (1)

1

Belgium The Left

Against (1)

1

Czechia The Left

Against (1)

1

Sweden The Left

Against (1)

1

Portugal The Left

4

Denmark The Left

Against (1)

1

Finland The Left

Against (1)

1

Ireland The Left

4

Cyprus The Left

2

A9-0228/2020 - Ondřej Kovařík - Déclaration de la Commission - Am 3

2021/02/10 Outcome: +: 557, 0: 96, -: 36
DE PL IT ES RO NL HU BE BG FR CZ AT SE PT SK EL DK LT FI HR IE LV SI MT LU EE CY
Total
91
50
73
58
33
28
21
21
17
77
20
19
20
21
14
21
14
11
14
12
13
8
8
6
6
7
6
icon: PPE PPE
181

Denmark PPE

For (1)

1

Latvia PPE

2

Malta PPE

2

Luxembourg PPE

2

Estonia PPE

For (1)

1
2
icon: S&D S&D
142

Greece S&D

2

Lithuania S&D

2

Latvia S&D

2

Slovenia S&D

2

Luxembourg S&D

For (1)

1

Estonia S&D

2

Cyprus S&D

2
icon: Renew Renew
97

Italy Renew

For (1)

1

Hungary Renew

2

Austria Renew

For (1)

1
3

Slovakia Renew

2

Lithuania Renew

1

Finland Renew

3

Croatia Renew

For (1)

1

Ireland Renew

2

Latvia Renew

For (1)

1

Slovenia Renew

2

Luxembourg Renew

2

Estonia Renew

3
icon: Verts/ALE Verts/ALE
71

Poland Verts/ALE

For (1)

1

Spain Verts/ALE

3

Netherlands Verts/ALE

3

Belgium Verts/ALE

3

Czechia Verts/ALE

3

Austria Verts/ALE

3

Sweden Verts/ALE

3

Portugal Verts/ALE

1

Denmark Verts/ALE

2

Lithuania Verts/ALE

2

Finland Verts/ALE

3

Ireland Verts/ALE

2

Latvia Verts/ALE

1

Luxembourg Verts/ALE

For (1)

1
icon: ECR ECR
61

Romania ECR

1

Bulgaria ECR

2
3

Greece ECR

1

Lithuania ECR

1

Croatia ECR

For (1)

1

Latvia ECR

2
icon: NI NI
27

Germany NI

Abstain (1)

2

Netherlands NI

1

Hungary NI

1

Slovakia NI

Abstain (1)

2

Lithuania NI

1

Croatia NI

Against (1)

Abstain (1)

2
icon: The Left The Left
38
4

Netherlands The Left

Abstain (1)

1

Belgium The Left

Abstain (1)

1

Czechia The Left

Abstain (1)

1

Sweden The Left

Abstain (1)

1

Portugal The Left

4

Denmark The Left

Abstain (1)

1

Finland The Left

Abstain (1)

1

Ireland The Left

4

Cyprus The Left

2
icon: ID ID
72

Netherlands ID

Against (1)

1

Czechia ID

Against (1)

Abstain (1)

2

Austria ID

3

Denmark ID

For (1)

1

Finland ID

2

Estonia ID

Against (1)

1
AmendmentsDossier
182 2020/0155(COD)
2020/10/21 IMCO 67 amendments...
source: 659.048
2020/11/03 ECON 115 amendments...
source: 660.110

History

(these mark the time of scraping, not the official date of the change)

events/13
date
2021-02-26T00:00:00
type
Final act published in Official Journal
docs
procedure/final
title
Regulation 2021/337
url
https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32021R0337
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docs/3/docs/0/url
Old
https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE658.733
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https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE658.733&secondRef=03
docs/5
date
2021-02-11T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/TA-9-2021-0047_EN.html title: T9-0047/2021
type
Text adopted by Parliament, 1st reading/single reading
body
EP
events/9/summary
  • The European Parliament adopted by 585 votes to 50, with 55 abstentions, a legislative resolution on the 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.
  • As a reminder, the amendments to the Prospectus Regulation aim to create the EU Recovery Prospectus as a short form prospectus and to introduce targeted adjustments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic.
  • Parliament adopted its position at first reading in accordance with the ordinary legislative procedure by amending the Commission proposal as follows:
  • EU Recovery Prospectus
  • The new simplified prospectus, known as the ‘EU Recovery Prospectus’, while addressing to the economic and financial challenges specifically raised by the COVID-19 pandemic, should be easy to produce for issuers, easy to understand for investors, in particular retail investors, who wish to finance issuers, and easy to scrutinise and approve for the competent authorities.
  • Under the amended text, offerors of shares admitted to trading on a regulated market or an SME growth market without interruption for at least the last 18 months would be able to choose to draw up an EU recovery prospectus under the simplified regime.
  • The use of the EU Recovery prospectus should therefore be limited to offers comprising no more than 150 % of outstanding capital.
  • As the EU Recovery prospectus regime is limited to the recovery phase, that regime should expire by 31 December 2022.
  • Less information
  • The prospectus should contain the relevant reduced information which is necessary to enable investors to understand:
  • - the prospects and financial performance of the issuer and the significant changes in the financial and business position of the issuer that have occurred since the end of the last financial year, if any;
  • - its financial and non-financial long-term business strategy and objectives, including, if applicable, a specific reference of not less than 400 words to the business and financial impact of the COVID-19 pandemic on the issuer and the anticipated future impact of the same;
  • - the essential information on the shares, including the rights attached to those shares and any limitations on those rights, the reasons for the issuance and its impact on the issuer, including on the overall capital
  • structure of the issuer, as well as a disclosure of capitalisation and indebtedness, a working capital statement, and the use of proceeds.
  • Right of withdrawal
  • Where the prospectus relates to an offer of securities to the public, investors who have already agreed to purchase or subscribe for the securities before the supplement is published should have the right, exercisable within three working days after the publication of the supplement, to withdraw their acceptances, provided that the significant new factor, material mistake or material inaccuracy arose or was noted before the closing of the offer period or the delivery of the securities, whichever occurs first.
  • The supplement shall contain a prominent statement concerning the right of withdrawal.
  • In order to provide relief and free-up resources for financial intermediaries while maintaining a high level of investor protection, it is specified that financial intermediaries should contact investors who
  • purchase or subscribe securities at the latest at the closing of the initial offer period.
  • Evaluation report
  • Parliament specified that the report should include, inter alia:
  • - an estimate of the actual additional market capitalisation mobilised by EU Recovery prospectuses at the date of issue in order to gather experience about the EU Recovery prospectus for post-evaluation;
  • - an indication of the overall financial savings achieved and cost reductions still possible, and the total costs of compliance with the Regulation for issuers, offerors and financial intermediaries and a calculation of these costs as a percentage of operational costs;
  • - an analysis of whether it is appropriate to extend the duration of the EU recovery prospectus regime and whether the planned measures have achieved the objective of providing more clarity and flexibility for financial intermediaries and investors alike.
committees/0
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Responsible Committee
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EP
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Economic and Monetary Affairs
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docs/5
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  • The Committee on Economic and Monetary Affairs on the 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.
  • As a reminder, the amendments to the Prospectus Regulation aim to create the EU Recovery Prospectus as a short form prospectus and to introduce targeted adjustments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic.
  • The committee recommended that the European Parliament’s position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:
  • Duration of the derogation
  • Under the amended text, the EU Recovery prospectus is limited to the recovery phase, the regime of this prospectus should expire by 31 December 2022.
  • EU Recovery Prospectus
  • Companies that have had shares admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months could choose to draw up an EU recovery prospectus under the simplified regime.
  • The prospectus should contain the relevant simplified information necessary for investors to understand:
  • - the prospects and financial performance of the issuer and the significant changes in the financial and business position of the issuer that have occurred since the end of the last financial year, if any, as well as its long term business strategy and objectives, both financial and non-financial; the issuer should include, if applicable, a specific reference of not less than 400 words to the financial and business impact of COVID-19 on the issuer and a statement regarding the anticipated future impact of the same;
  • - the essential information on the shares, the rights attached to the shares, including any limitations on those rights, the reasons for the issuance and its impact on the overall capital structure of the issuer, disclosure of capitalisation and indebtedness, a working capital statement, and the use of proceeds.
  • The information contained in the EU Recovery prospectus should enable investors, especially non-professional investors, to make an informed investment decision.
  • Right of withdrawal
  • Where the prospectus relates to an offer of securities to the public, investors who have already agreed to purchase or subscribe for the securities before the supplement is published should have the right, exercisable within three working days after the publication of the supplement, provided that the significant new factor, material mistake or material inaccuracy arose or was noted before the closing of the offer period or the delivery of the securities, whichever occurs first.
  • The right to withdraw is exercisable within three working days of the publication of the supplement.
  • Evaluation report
  • The report should include, inter alia, the following:
  • - the number of EU Growth prospectuses approved and an analysis of the evolution of such number, as well as an estimate of the actual additional market capitalisation mobilised by such prospectuses at the point of issue in order to gather experience about the EU Recovery prospectus for post-evaluation;
  • - the cost of preparing and having an EU Recovery prospectus approved compared to the current costs for a standard prospectus, a secondary issuance prospectus and an EU Growth prospectus, together with an indication of the overall financial savings achieved and of which costs could be further reduced, and the total costs of complying with this Regulation for issuers, offerors and financial intermediaries together with the calculation of those costs as a percentage of operational costs.
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  • PURPOSE: to create a new simplified prospectus (the ‘EU Recovery Prospectus’) and to introduce targeted changes for financial intermediaries to support recovery from the COVID-19 pandemic.
  • PROPOSED ACT: Regulation of the European Parliament and of the Council.
  • ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.
  • BACKGROUND: Regulation (EU) 2017/1129 of the European Parliament and of the Council lays down the requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market in the Union.
  • In order to swiftly address the serious economic impact of the COVID-19 pandemic, measures shall be introduced to facilitate investment in the real economy, to promote rapid recapitalisation of companies in the EU and enable issuers to tap into public stock markets at an early stage of the recovery process. To achieve these objectives, the Commission proposes to create a new simplified prospectus for known issuers, designed to facilitate the raising of capital on stock markets.
  • This legislative proposal on amendments to the Prospectus Regulation is part of a ‘Capital Markets Stimulus Package’ aimed at facilitating economic recovery post-COVID-19, which also includes legislative proposals to amend the Markets in Financial Instruments Directive (MiFID II) and the Capital Requirements Regulation .
  • CONTENT: the amendments to the Prospectus Regulation aim to create the EU recovery prospectus as a short form prospectus and to introduce targeted amendments for financial intermediaries. The aim is to enable companies to quickly access new financing in order to contribute to economic recovery after the COVID-19 pandemic. In particular, the aim is to help companies raise capital more easily and, therefore, reduce their debt-to-equity ratios, thereby helping them stay solvent.
  • EU Recovery prospectus
  • The objective of the EU Recovery prospectus is to provide listed issuers with simplified disclosure rules that are tailored to their specific needs in a post-crisis environment while maintaining the prospectus as a relevant tool for informing potential investors.
  • This shortened prospectus, reduced to a maximum of 30 pages:
  • - shall be easy to produce for issuers, easy to read for investors and easy to scrutinise for national competent authorities;
  • - shall focus on the essential information investors need to make informed decisions and may be used by issuers who have been listed for at least 18 months and who wish to issue shares;
  • - shall benefit from the EU passport mechanism, which means that all EU investors who wish to do so all be able to finance companies using it.
  • The deadline for approving the EU's recovery prospectus shall be reduced to 5 working days to allow issuers to quickly seize opportunities to raise capital.
  • Financial intermediaries
  • A second set of targeted changes aims to alleviate the pressure on financial intermediaries (such as commercial and investment banks) which play a key role in financing the recovery of the real economy.
  • - Firstly, the proposal clarifies the obligations of financial intermediaries with regard to the ‘supplements’ that must be published in addition to the prospectus under certain conditions, when a new factor or a material mistake or inaccuracy in the information contained in the prospectus is identified.
  • After the publication of a supplement, the financial intermediary shall only contact investors with a withdrawal right. The proposal also extends the time limit for financial intermediaries to contact investors to 1 working day from the publication of the supplement and extends the period during which a right of withdrawal may be exercised by investors to 3 working days from the publication of the supplement.
  • - Secondly, the proposed amendments aim to support the financing of credit institutions in the takeover phase by increasing the threshold for the exemption from the obligation to publish a prospectus for certain types of securities offers. The Commission therefore proposes a targeted increase of the threshold from EUR 75 million to EUR 150 million per credit institution over a 12-month period.
  • Temporary scheme
  • The EU Recovery prospectus aims to facilitate recapitalisation during the recovery phase. It is therefore a temporary scheme that would expire 18 months after the date of application of the Regulation. The Commission shall, by 21 July 2022 at the latest, present a report on the application of the Regulation, accompanied, if appropriate, by a legislative proposal.