BETA


2020/0155(COD) EU Recovery prospectus and targeted adjustments for financial intermediaries to help the recovery from the COVID-19 pandemic
Next event: Debate in plenary scheduled 2021/02/10 more...

Progress: Awaiting Parliament's position in 1st reading

RoleCommitteeRapporteurShadows
Lead ECON KOVAŘÍK Ondřej (icon: Renew Renew) PIETIKÄINEN Sirpa (icon: Unknown Group Unknown Group), SANT Alfred (icon: Unknown Group Unknown Group), MEUTHEN Jörg (icon: Unknown Group Unknown Group), URTASUN Ernest (icon: Unknown Group Unknown Group), JURZYCA Eugen (icon: Unknown Group Unknown Group), GUSMÃO José (icon: Confederal Group of the European United Left Confederal Group of the European United Left)
Committee Opinion IMCO JORON Virginie (icon: Unknown Group Unknown Group) 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

2021/02/10
   Debate in plenary scheduled
2021/02/10
   Vote in plenary scheduled
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 (Unknown Group) 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

  • Coreper letter confirming interinstitutional agreement: GEDA/A/(2020)007618
  • Committee report tabled for plenary, 1st reading/single reading: A9-0228/2020
  • Committee opinion: PE658.733
  • Amendments tabled in committee: PE660.110
  • Contribution: COM(2020)0281
  • Contribution: COM(2020)0281
  • Committee draft report: PE658.908
  • Document attached to the procedure: EUR-Lex
  • Document attached to the procedure: SWD(2020)0120
  • Legislative proposal published: COM(2020)0281
  • Legislative proposal published: EUR-Lex
  • Document attached to the procedure: EUR-Lex SWD(2020)0120
  • Committee draft report: PE658.908
  • Amendments tabled in committee: PE660.110
  • Committee opinion: PE658.733
  • Coreper letter confirming interinstitutional agreement: GEDA/A/(2020)007618
  • Contribution: COM(2020)0281
  • Contribution: COM(2020)0281

History

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

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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.