Directive 2003/71/EC (the Prospectus Directive) was transposed into Irish Law by the Prospectus (Directive 2003/71/EC) Regulations 2005. One of the mechanisms built into the Prospectus Directive was the requirement that the European Commission make an assessment of the application of the Directive 5 years after it came into force and to present, where appropriate, proposals for its review.
That assessment was carried out and revealed that certain elements of the Prospectus Directive should be amended in order to simplify and improve its application, increase its efficiency and enhance the international competitiveness of the European Union, thereby contributing to the reduction of administrative burdens.
Directive 2010/73/EU (the New PD Directive) is the legislation which will amend the Prospectus Directive in an effort at introducing the efficiencies described above.
Some of the key changes to the Prospectus Directive can be listed as follows:
- The threshold of €50,000 in the Prospectus Directive was no longer considered to be an accurate distinction between retail investors and professional investors. This threshold is now being increased to €100,000.
- The New PD Directive will contain a requirement to publish new prospectuses online. This publication can be on the website of an issuer, on the website of an intermediary or on the websites of either the ISE or Central Bank of Ireland. This only relates to prospectuses approved from 1 July 2012.
- Any issuances to retail investors will need to be accompanied by a summary which contains more detail than is the case under the Prospectus Directive rules.
- Any debt issuances issued by means of "final terms" should set out that the content of the final terms is limited to dealing with specific information, all key information being retained in the base prospectus.
Issuers should consider updating debt programmes prior to 1 July 2012 in order to benefit from the 12 month grandfathering provisions that apply to base prospectuses in situ as at 1 July 2012.