EEA

• Prospectus regime: There is a standardised regime governing securities prospectuses across the European Economic Area (EEA). An issuer or offeror of securities must prepare a prospectus where an offer is made to the public in the EEA or an application is made for securities to be admitted to trading on an EEA regulated market. From 21 July 2019, the Prospective Directive regime under (2003/71/EC) was replaced in full by Regulation (EU) 2017/1129 and underlying legislation. The prospectus regime under the 2017 Prospectus Regulation is commonly referred to as "PD3".

• On-going transparency regime: In the EEA, the Transparency Directive places on-going disclosure obligations on issuers, once listed on an EEA regulated market.

UK

• Following Brexit, both EEA regimes were “onshored”, with very few changes, via the European Union (Withdrawal) Act 2018.

On the horizon

• EEA prospectus regime changes: On 7 December 2022 the European Commission published the draft EU Listing Act which proposes changes to Regulation (EU) 2017/1129. The Commission's proposal, which forms part of the EU CMU package, had been widely expected in the fourth quarter of 2022 and followed a November 2021 public consultation which closed in February 2022. The Commission requested public comments on its EU Listing Act proposal by 27 March 2023, alongside the on-going consideration by the Council of the European Union and the European Parliament. As at end-July 2023, compromise papers had been prepared by the European Council and the Rapporteur for the European Parliament - see link. On 29 January 2024, the EU Council announced that the EU Parliament had reached a provisional agreement on the EU Listing Act - see press release. The compromise text was published on 14 February 2024, via a modified press release

UK prospectus regime changes: The UK Prospectus Regulation currently remains almost identical to the EEA Prospectus Regulation. That will change next year, however, with changes to the UK prospectus regime as part of the UK Government's 'Edinburgh Reforms' package to UK financial services legislation announced on 9 December 2022. Proposals in the Edinburgh Reform Package build on earlier HMT and FCA consultations:

Changes to the UK prospectus regime are being created pursuant to the UK Financial Services and Markets Act 2023 and powers, whereby many powers are delegated by the government to the UK FCA (see our UK Financial Services and Markets Act Topic Guide).  

Accordingly, the new UK prospectus regime is being created in two separate parts:

UK SI: The framework for the UK’s prospectus regime is contained in a UK Statutory Instrument made on 29 January 2024: the Public Offers and Admissions to Trading Regulations 2024 (the "UK SI", often referred to by the acronym "POATRs"). See our Clifford Chance briefing "The New UK Public Offers and Admission to Trading Regime - Impact on Debt Capital Markets" dated 24 April 2024. (The final UK SI followed the July 2023 Policy Note and near-final UK SI, and the earlier December 2022 Policy Note and draft, illustrative UK SI published by HM Treasury alongside the Edinburgh Reforms announcement.) However, even though the UK SI has been made, the UK SI will only enter fully into force on the same day that revocation of the "assimilated law" UK Prospectus Regulation by s.1(1) and Schedule 1 of FSMA 2023 takes place - and that is likely to be in Spring or Summer 2025.

FCA rules - CP24/12: The more detailed content under the new framework, to complete the new public offer and admission to trading regime, will be provided by the UK FCA. On 26 July 2024, the FCA published a consultation (CP24/12) on its proposals for new rules in relation to the new UK SI or POATRs. 

CP24/12 focuses on proposals for securities being admitted to a regulated market or primary multilateral trading facility (MTF). The deadline for comments is 18 October 2024 and the FCA has indicated that rules are likely to be made in the first half of 2025.

Progress and background can be tracked on the UK FCA webpage.

On 29 August 2024, we published a high-level Clifford Chance briefing "The New UK Prospectus Regime – Filling in the blanks" which highlights the implications for debt of the CP24/12 proposals.   The briefing compares proposals with current UK requirements, as a well as current and future EU regime requirements.

CP24/12 also contains a full suite of suggested prospectus disclosure Annexes.  For ease of reference, we prepared blacklines of four of the main debt Annexes, showing how proposals differ from the current UK prospectus regime:

• Blackline - Annex 6 - Retail debt - registration doc
• Blackline - Annex 7 - Wholesale debt - registration doc
• Blackline - Annex 14 - Retail debt - securities note
• Blackline - Annex 15 – Wholesale debt - securities note

For those wishing to look into further background to the Consultation, CP24/12 follows on from the FCA's market engagement last year (2023). The engagement process was summarised in the UK FCA 12 December 2023 summary of feedback received on its six Engagement Papers published in May and July 2023. The 2023 Engagement Papers were:

• Engagement Paper 1 - admission to trading on a regulated market; 
• Engagement Paper 2 - further issuances of equity on regulated markets; 
• Engagement Paper 3 - protected forward-looking statements; 
• Engagement Paper 4 - non-equity securities; 
• Engagement Paper 5 - The public offer platform; and 
• Engagement Paper 6 - Primary multilateral trading facilities.

As well as CP24/12, on 26 July 2024 the FCA also published a parallel consultation on the new regime for public offer platforms (CP24/13).

The FCA also indicated in CP24/12 that a further consultation will follow in Q4 of 2024 to consider removing barriers to low denomination securities issuance and encouraging retail participation.