A securities prospectus is a written compilation of information about the nature, subject matter and risks of securities . In a broader sense, the issue prospectus as well as the stock exchange or listing prospectus are occasionally referred to as the “securities prospectus ” (for differentiation see below). At Union law level, the regulations for preparing securities prospectuses were for the first time substantially harmonized by the prospectus directive for the European Economic Area (EEA). The Prospectus Directive was replaced by the Prospectus Ordinance on July 21, 2019 .
Background and prospectus requirement
Before every public offer of securities and before every listing on a regulated market within the EEA, a prospectus must be published in accordance with the Prospectus Directive (“prospectus obligation”). It should be noted here that, in the opinion of the Federal Financial Supervisory Authority (BaFin), advertising measures for a security or other financial instrument are viewed as a public offer and can therefore trigger the prospectus requirement. The prospectus is prepared by the specialist departments of the issuing company (legal and tax departments, accounting, investor relations, funding, etc.) and - depending on the product and form of placement - in cooperation with one or more investment banks , specialized law firms and auditing companies. The prospectus, in particular any incorrect or incomplete information on relevant risk factors, can be used as a basis for civil liability claims. The respective scope of liability is (largely) not harmonized under Union law and is therefore based on the applicable jurisdiction of the Member State of the European Union affected by the offer or the listing on the stock exchange .
In the case of capital increases that make up less than 10 percent of the number of shares of the same class that are already admitted to trading on the same organized market, there is no obligation to publish a prospectus, unless a public offer is made at the same time (disputed; see in particular CESR, F&Q) . According to this view, there is no public offer, for example, if this offer is executed as a capital increase without subscription rights as a private placement or as a subscription rights issue exclusively aimed at existing shareholders , and the remaining non-subscribed shares in the rump placement are also privately placed. In the latter case, however, it should be noted that no public subscription rights trading is set up, as this includes a larger, public group of people and this creates a prospectus obligation.
When Scale shares are re-listed in the Prime Standard , a prospectus is also inevitable, as this is the first time that this class of shares is publicly admitted to public trading on an organized market .
The obligation to prepare a securities prospectus does not apply under certain circumstances. It is necessary for this that the corresponding security is not publicly distributed. This is the case , for example, in the context of a private placement . However, a subsequent prospectus liability can also arise here if z. B. a press release is classified as an indirect sales promotion.
The issue of dedicated employee shares is basically a public offer, but the obligation to publish a prospectus can be avoided by providing a prospectus-replacing document that must contain certain minimum information.
There are further exceptions to the prospectus requirement for free offers, for offers with an issue volume of up to 100,000 euros per year, for minimum denominations of 100,000 euros or for offers to exclusively qualified investors or to fewer than 150 (including non-qualified) investors.
In the area of prospectus liability under judicial law, however, any advertising material that serves to inform and attract investors and form an essential basis for decision-making for them is also considered a prospectus (WM 80, 794).
Minimum content & costs
The preparation of a securities prospectus for an IPO is very complex and time-consuming and costly (estimated at around 350,000 euros on average). However, the costs vary greatly depending on the product and the form of placement.
The content of the securities prospectus is determined by the prospectus ordinance . According to this, detailed information on the issuer (registration document), the security (security description) and a summary (English building block approach ) are required .
Obligation to publish a prospectus for other financial instruments
In Germany, in addition to securities, all publicly offered company shares, shares in trust assets , open or closed funds or registered bonds are subject to the prospectus requirement . Exempt from the prospectus requirement are u. a. Cooperative shares , insurance pension funds, so-called private placements (max. 20 shareholders or minimum investment of € 200,000 or total investment of max. € 100,000 in 12 months or only to employees), offers only to institutional investors and most government bonds .
In Austria, in addition to the securities that are harmonized under Union law, other investments also require a prospectus, including in particular unsecuritized investments and securities that are not covered by Directive 2014/65 / EU on markets for financial instruments (Financial Market Directive ).
Deadlines and timing
The statutory period for the first official statement is 20 working days for an initial issue and 10 working days for securities that are already publicly traded or admitted to a regulated market. The prospectuses are submitted to the competent securities supervisory authority (in Germany this is BaFin). BaFin carries out a comprehensive review of the prospectus and reports the result in its opinion in the form of detailed comments. After the prospectus has been adjusted by BaFin in cooperation with the issuer in accordance with the (possibly several) statements made by the BaFin, the prospectus is submitted to BaFin for a final review. After the examination has been completed, BaFin usually reports the mostly positive result (the so-called "approval") within one week. The notification procedure with the so-called “EU passport” for securities prospectuses also offers the option of transferring the prospectus to all other EU member states upon request.
In Austria, the Financial Market Authority (FMA) is responsible for approving prospectuses. Due to the EEA harmonization, the approval procedure is largely similar to the procedure before the BaFin (10/20 bank working days approval period). Due to different national general administrative procedural provisions, however, in Austria, as in other EEA member states, there are also different procedural regulations.
Terminology relating to the securities prospectuses in Switzerland
While at the European level, because the EU member states make different demarcations between issuance and listing, the prospectuses are standardized and no longer an official differentiation is made between issuing and sales prospectuses, Switzerland is not bound by the common requirements and maintains the differentiation of prospectuses upright. The definition of the terms “ primary market ” and “ secondary market ” is also different to that in Germany ; in Switzerland, the former is linked to the issue, the latter to exchange trading; in Germany, on the other hand, the stock exchange market is included in the primary market, provided that the securities are first issued there.
The term “issue prospectus” or “sales prospectus” is understood to mean the information that has to be published on the occasion of the public subscription of securities (primary market in Swiss terms) (“advertising for the purpose of raising capital by the company”). Any invitation to subscribe that is not addressed to a limited number of people is public. The aim is to provide investors with information about the company's financial position over the long term. All public companies must prepare such a prospectus, i. hu a. all public companies that issue shares to investors you do not know. The shares are issued publicly, but not publicly traded. A typical example would be a ski lift that needs more capital and therefore publicly issues securities that are subscribed to by a public but relatively limited group of investors (e.g. the residents and hoteliers of the village who have held their ski lift shares for decades, and receive about an annual subscription as dividends).
A "stock exchange prospectus", "listing prospectus" or "admission prospectus", however, must be published on the occasion of the stock exchange listing (secondary market in the Swiss word understanding) and should enable the investor to compare the performance of the security with that of other listed companies ("advertising for the purpose of admission to stock exchange trading" ). Investors are provided with the clear and complete information they need to make an informed investment decision. This is less about the individual, project-oriented investment, and more about generating returns. The requirements placed on the listing prospectus are much more precise and detailed in order to ensure comparability. The group of investors is “atomized”.
Very few companies prepare a stock exchange prospectus, because: of the approximately 170,000 Swiss stock corporations, only about 300 are listed on the stock exchange, so that only 300 companies also have to prepare listing prospectuses. In the case of companies that are listed on the stock exchange, the issue prospectus often already meets the requirements of the stock exchange prospectus in order to keep the workload low.
The differentiation between securities prospectuses is based on the following consideration: On the primary market, the main thing is that issuers can convince investors to buy their securities. The issuers therefore have an interest in obtaining information about themselves, which is why the issue prospectus requirements can be kept relatively low. On the secondary market (stock exchange), on the other hand, investors “fight” each other in order to secure those securities that promise the most returns. In order to ensure efficient allocation here, easily comparable information is required, which is why increased requirements are placed on the stock exchange prospectuses and, in particular, ad hoc publicity is required. In addition, significantly higher amounts of money are involved on the secondary market, so that the potential risk and thus the need for regulation are greater.
- ; OJ 2003/345, p. 64
- Michael Schlitt: Listing in the Entry Standard attractive as an interim solution . In: Börsen-Zeitung . No. 91 , May 14, 2008.
- Entry Standard is very attractive
- prospectus. Accessed February 3, 2018 (German).
- The Commission Prospectus Regulation 2017/1129 (Article 46 Paragraph 2 Regulation (EU) 2017/1129). By of the European Commission has been of 21 July 2019 abolished (Article 46). : in the currently applicable version is now to be understood as a reference to the
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