Expansion of employee share plan exemption under the EU Prospectus Directive further delayed to 2015

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European Union
Expansion of Employee Share Plan Exemption under the EU Prospectus Directive Further Delayed to 2015 The European Commission (the “Commission”) will not make a final determination on the equivalency of non-EU regulated exchanges for purposes of expanding the "employee share plan exemption" under the EU Prospectus Directive in 2014 according to unofficial comments made to Baker & McKenzie lawyers by various securities regulators.
The European Securities and Markets Authority ("ESMA") internally established a deadline of December 31, 2014 to provide technical advice to the Commission on which stock exchanges will qualify as equivalent to an EU-regulated exchange (both the New York Stock Exchange and NASDAQ are expected to qualify). However, the ESMA still has not issued its advice to the Commission and the Commission will need to review and consider such advice prior to making a final determination on equivalency.
As a result, U.S. companies that have delayed equity compensation offerings to employees in Europe with the hope of being able to rely on the expanded employee share plan exemption (for purposes of avoiding the need to prepare and distribute an approved EU prospectus) should anticipate further delays through the end of 2014 and into 2015. In the interim, various EU member states continue to implement other amendments to the EU Prospectus Directive (such as the increase in the applicable thresholds for certain exemptions and exclusions from the prospectus filing requirements) that may make previously deferred offerings now possible without triggering the need for an approved EU prospectus.
For additional information on these amendments or the status of the employee share plan exemption, please contact your GES attorney.
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For more information: • Narendra Acharya • June Anne Burke • Edward Burmeister • Valerie Diamond • Denise Glagau • Sinead Kelly • Barbara Klementz • Aimee Soodan • Alison Wright • Brian Wydajewski
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