Yesterday, the European Commission published its consultation document on the Prospectus Directive. This document was disclosed alongside the Commission's Green Paper on the Capital Markets Union which sets out a roadmap for boosting capital markets across its 28 Members. 

The purpose of the consultation is to gather views on the functioning of the Prospectus Directive and the implementing legislation.The current prospectus framework provides issuers with several tools initially intended to make the procedure of drawing up prospectuses more flexible and to lower the associated costs (proportionate disclosure regime, incorporation by reference, base prospectus, tripartite prospectus). However, the prospectus framework is seen today by some as burdensome and ineffective at facilitating access to capital markets, in particular for SMEs and companies with lower market capitalisation. 

These fundamental aspects of the Directive under review are grouped under the following headings:

  1. When a prospectus is needed: the scope of the requirement to prepare a prospectus;
  2. What information a prospectus should contain: the contents of a prospectus and the responsibility attaching to it;
  3. How prospectuses are approved: the role of national competent authorities in the approval process of prospectuses, the equivalence of third-country prospectus regimes.