On November 30, 2015, the European Commission published a proposal for a new European (“EU”) Prospectus Regulation which is intended to repeal and replace the existing EU Prospectus Directive. Pursuant to this proposal, it is anticipated that issuers not listed or incorporated in the EU will be entitled to rely on the Employee Share Plan Exemption from the EU prospectus filing requirement.
This development is welcome news for companies that have been required to file an annual EU prospectus for the offering of their share plan(s) in the EU, as well as for companies that have had to closely monitor reliance on one of the other exemptions from the EU prospectus requirement (e.g., reliance on the €5 million exclusion). Under the Employee Share Plan Exemption, companies need not file a prospectus provided they provide certain disclosure information concerning the offer to employees eligible to participate in the share plan.
Because the proposal will still have to work its way through the EU legislative process, it is unlikely to become effective before late 2017 or early 2018.