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Will UK issuers benefit from the EU's proposed introduction of lighter prospectus disclosure requirements pursuant to the EU Recovery Prospectus?

On 20 July 2020, the European Commission adopted a capital markets recovery package as part of its overall COVID-19 recovery strategy.  As part of the package, the Commission released a proposal to amend the Prospectus Regulation which aims to reduce the regulatory burden issuers face under the existing prospectus regime.

The proposal to amend the Prospectus Regulation (Amending Regulation) will create a new type of short-form prospectus for those companies undertaking a secondary issue of shares which are admitted to trading on a regulated market or an EU growth market for a continuous period of at least 18 months (EU Recovery Prospectus).

The EU Recovery Prospectus will have reduced disclosure requirements that focus on essential information, thereby shortening the length of prospectuses from hundreds of pages to just 30 pages. The intention is to help companies with their COVID-19 pandemic recovery plans and facilitate capital raises through secondary issuances of shares by:

1. making prospectuses easier to prepare;

2. reducing the cost and time required to prepare a prospectus;

3. shortening the time required for the relevant regulator to review and approve the prospectus;

and generally enabling shorter timetables; and

4. making prospectuses easier to read and easier to scrutinise so that potential investors are able to make an informed investment decision.

To read the full summary please click this link.



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