The completed Form A, the relevant fee, and drafts of all other documents referred to above must be submitted to the FCA at least 20 working days before the intended approval date, in the context of an IPO or an issuer not otherwise listed on a regulated market that has not previously had a prospectus approved by the FCA, or at least 10 working days before the intended approval date, in the context of a prospectus published by an issuer with a listing on a regulated market. Final-form versions of any draft documents submitted must be submitted to the FCA before midday on the required approval date.
On 30 November 2015, the European Commission published a delegated regulation with regard to regulatory technical standards for approval and publication of prospectuses (the "Delegated Regulation"). The Delegated Regulation made the following key changes:
Further changes set out in the Delegated Regulation have been discussed in more detail in this chapter.
Moreover, if adopted by the European Parliament and the Council of the EU, the Proposed Prospectus Regulation will reform some of the current requirements for approval and publication of prospectuses. Where relevant, proposed changes under the Proposed Prospectus Regulation have been highlighted throughout this chapter.
Under the Amending Directive, an issuer that publishes a prospectus in accordance with (i) and (ii) above must also publish the prospectus in electronic form, on either its own website or that of its placing agent.
Under the Delegated Regulation, the prospectus published in electronic form must:
Prospectuses made available via the issuer's website "shall take measures" (e.g. insertion of a disclaimer) to avoid targeting jurisdictions where the public offer is not being made. Access to a prospectus in electronic form must not be conditional on registration, the acceptance of a disclaimer limiting legal liability or payment of any fee.
The Proposed Prospectus Regulation seeks to remove two of the publication options for an approved prospectus: (i) the publication in a newspaper; and (ii) the distribution in printed form at the office of the issuer. However, the requirement to provide a free copy to anyone who requests it is retained.37 The prospectus will be deemed available to the public where it is made available on the website of any one of the issuer, offeror or person asking for admission, the financial intermediaries placing or selling the securities or the website of the regulated market. It is also proposed that ESMA will develop an online searchable library for EU investors. The competent authority will be tasked with supplying ESMA an electronic prospectus once it is approved, as well as data necessary for ESMA classification.
The home member state of an issuer of equity (including convertibles) or low-denomination debt incorporated in the EEA (an EEA issuer) will always be the member state in which it has its registered office.However, the analysis is more complex for an issuer of equity (including convertibles) and low-denomination debt38 not incorporated in the EEA (a non-EEA issuer), as its home member state will be either:
at the election of the issuer, offeror or person asking for admission, although an election by either of the latter two can effectively be overridden by the issuer. The flow chart in Appendix II illustrates the manner in which a home member state may be selected.
The regulations are ambiguous in the context of a public offer made simultaneously in a number of member states or where securities are admitted to trading on a regulated market at the end of the public-offer period—this suggests that an issuer could still choose, but this would need to be reviewed on a case-by-case basis. For the purpose of determining whether a “public offer” has been made, the relevant rules are the ones that were in force in the relevant state at the time the offer was made.
Non-EEA issuers already listed on a regulated market are also required to elect their home member states, by notice in writing to the relevant competent authority. Whilst the market view is that the home member states of such issuers will be the states in which they are listed, given the ambiguity in the definition, non-EEA issuers do need to ensure that they have made valid elections in this regard.
The determination of a home member state for a non-EEA issuer is permanent and cannot subsequently be changed by the issuer. In addition to its implications under the Prospectus Directive, the member state selected will generally be the issuer’s home member state for the purposes of the Transparency Directive, which was implemented in member states on 20 January 200739.
Both EEA and non-EEA issuers of debt with a denomination equal to, or greater than, €1,000 (or a near equivalent in another currency) and most derivatives (unless the underlying securities belong to the issuer’s group) still have a free choice of home member state on an issue-by-issue basis. This means that an issuer may have several home member states: one governing all issues of equity and low-denomination debt, and different ones for individual debt issues.
Under the Proposed Prospectus Regulation, a third country issuer will also be required to designate a representative established in its chosen home member state (subject to and supervised by EU financial services regulation) as a contact point for the national competent authority. This requirement is similar to the existing requirement for a sponsor in a premium listing on the Main Market.
If the issuer’s home member state is the UK, the procedure for seeking a transfer from the FCA to another competent authority is as follows:
- the person making the request must do so in writing to the FCA at least 10 working days before the date the transfer is sought;- the request must:
- the FCA will consider transferring the function of approving a prospectus to the competent authority of another EEA State:
In practice, if a transfer to another competent authority is to be sought, issuers and their advisers would be well advised to contact the FCA and the other relevant competent authority at the earliest possible stage, but in our experience, a transfer from one competent authority to another is extremely rare. The FCA has stated that it is likely to look more favourably upon a transfer request where the issuer can demonstrate that it does not have any of its securities listed in the UK, is not making the offer in the UK and has most of its shareholders outside the UK. However, in circumstances where the FCA has a clear regulatory interest, such as an issuer listed in the UK with a large UK shareholder base, it is less likely to agree to a transfer.
A request to the FCA to supply the Required Information to the competent authority in the proposed Host State can be submitted either at the time the draft prospectus is submitted for approval by the FCA or subsequently (bearing in mind that a prospectus is, in principle, valid for a period of 12 months from approval). The request must be made in writing on a Form B and must include:
The FCA must provide the Required Information to the competent authority of the relevant Host State:
The FCA will inform the applicant as soon as practicable after it has supplied the Required Information to the competent authority of the relevant Host State, and the relevant public offer in that state can then be made. Under the Amending Directive, the FCA will be obliged to notify the applicant at the same time as the relevant Host State.
The procedure whereby the securities are to be admitted to trading on a regulated market of another member state will be the same as above, but the issuer will have to comply with any additional requirements relating to the admission of securities to trading on the relevant market.
The relevant issuer will then be able to offer securities to the public in the UK. If the issuer also wishes to apply for admission of the securities to trading on a regulated market, then in addition to the above, it should be required to follow the procedures set out in the Listing Rules for admission to listing of securities of the relevant type. (See Chapter 2 for further details.)