The Prospectus Regulation: Facilitating Security Token Offerings

22 Jul 2019

As of the 21st of July 2019, Regulation (EU) 2017/1129 (the “Prospectus Regulation”) came fully into effect and is directly applicable in all EU member states.


The Prospectus Regulation facilitates the so-called prospectus obligation and the issuance of new security tokens in the EU through the following concepts:

 

  • EU Growth Prospectus: the Prospectus Regulation introduces the concept of an EU Growth Prospectus, which permits certain companies to draw up a simplified documentation;

  • Simplified disclosure regime for secondary issues

  • Alleviated wholesale disclosure regime: there is no requirement to include a summary in the prospectus, and more flexible language requirements are available under certain circumstances;

  • Universal registration document: an optional registration document is available for frequent issuers admitted to trading on regulated markets or MTFs.

 

Exemption from publishing a prospectus


In contrast to the above, there is no obligation to publish a prospectus where the offer:

 

  • is made solely to qualified investors;

  • is made to fewer than 150 persons other than qualified investors per member state;

  • consists of securities denominated in units of at least EUR 100,000; or

  • consists of securities addressed to investors who acquire securities for a total consideration of at least EUR 100,000.

 

Furthermore, the Prospectus Regulation exempts offers of less than 1 million euro from the obligation to publish a prospectus and also provides member states the possibility to exempt offers which are not more than 8 million euro from this obligation. In this regard, Malta has decided to exempt offers of securities to the public from the obligation to publish a prospectus which consist of offers below 5 million euro, calculated over a period of 12 months.


Please feel free to contact us in order to obtain more information about the Prospectus Regulation.

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