Filing and documentary requirements

General filing requirements

Give details of any filing requirements for public offerings of debt securities. Outline any requirements for debt securities that are not applicable to offerings of other securities.

The Prospectus Regulation requires a prospectus to be published if securities are to be offered to the public or admitted to trading on a regulated market in the Netherlands. The Prospectus Regulation defines an 'offer of securities to the public' as 'a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities'. This definition also applies to the placing of securities through financial intermediaries.

The Dutch Authority for the Financial Markets (AFM) is the Dutch competent authority with regards to approving prospectuses. Typically, a draft prospectus is sent to the AFM together with all incorporated information and reference tables, allowing the AFM to verify where mandatory disclosure items have been reflected in the prospectus. Should the AFM have any comments, these should be incorporated in the prospectus. Once the AFM has indicated that it has no further comments, the prospectus can be filed for official approval. After the prospectus is approved, the AFM publishes it on its website. Supplements to the prospectus must be approved by the AFM as well and include additional disclosure in relation to the issuer of the securities, such as the incorporation of recent financial results.

If the final terms of the offer of debt securities are not included in the base prospectus, the final terms need to be filed with the AFM, where possible prior to the offer of such securities.

Additional disclosure requirements apply to securitisations and packaged retail investor products, such as the making available of the prospectus and relevant transaction documentation through a securitisation repository and a key information document, respectively.

Prospectus requirements

In a public offering of debt securities, must the issuer produce a prospectus or similar documentation? What information must it contain?

Unless an exception or exemption applies, an issuer will have to publish an approved prospectus before offering debt securities to the public in the Netherlands. The prospectus must comply with the requirements set out in the Prospectus Regulation and its underlying regulations.

An issuer can publish either a prospectus or a registration document, together with a summary and a securities note. The approved prospectus will be valid for 12 months following approval, provided it is supplemented from time to time in accordance with applicable regulations.

The standard of disclosure in a prospectus is that it must contain the information required by an investor to make an informed investment decision in respect of the debt instruments. This includes information about the issuer and the debt instruments, such as:

  • the assets and liabilities, profits and losses, financial position, and prospects of the issuer and any guarantor;
  • the rights attaching to the debt instruments;
  • the reasons for the issuance and its impact on the issuer;
  • relevant risk factors; and
  • the terms and conditions of the debt instruments.

 

In general terms, the content requirements are more onerous for complex debt securities and those aimed at retail investors. Depending on the product, other requirements may apply. For example, the Packaged Retail and Insurance-based Investment Products Regulation requires issuers to produce a key information document when offering packaged retail investor products to retail investors, which may include structured notes.

Offering and listing documents follow recommendations by regulatory bodies, such as the European Securities and Markets Authority (ESMA) and the AFM, and industry bodies, such as the International Capital Markets Association, to ensure the prospectus is consistent with market practice. For example, following guidance from regulators and best market practices identified by industry associations, green, sustainability-linked, social and other environmental, social and governance bonds require additional disclosure to inform investors of their particular characteristics.

Documentation

Describe the drafting process for the offering document.

In the Dutch market, either counsel to the issuer or the arranger may hold the pen on drafting the prospectus and other issuance documentation, while the other side provides comments. The dealers, agents, auditors, rating agencies and other third parties involved provide further input to the documentation. Regardless of the division of tasks and responsibilities when preparing the prospectus, the issuer is ultimately responsible for all information contained in the prospectus, while other parties sometimes take responsibility for specific parts of the prospectus.

Key documentation issues typically revolve around the inclusion and contents of risk factors, transaction structure, description of the issuer and, if relevant, assets backing the transaction. In addition, selling restrictions are included in the prospectus to ensure compliance with applicable securities offering and listing laws. Often, local counsel are engaged to cover relevant offering or listing jurisdictions.

In determining what information to disclose, the issuer needs to consider whether such information is required to be included for investors to understand the investment and the debt securities offered or otherwise relevant to their investment decisions. In reviewing the prospectus, the AFM will also consider whether the information contained in the prospectus is sufficiently clear, concise and material. However, the AFM's approval of the prospectus cannot be seen as an endorsement of the issuer or the debt instruments that are the subject of the prospectus.

Private placements are usually structured in such a way that they are exempt from the prospectus requirements. However, sometimes an offering circular is drafted for private placements that closely follow the form of prospectuses used in public transactions.

Which key documents govern the terms and conditions of the debt securities? Who are the parties to such documents? How can such documents be accessed?

The terms and conditions of debt securities (and their offerings) are primarily provided for in:

  • the prospectus, which must be approved by the AFM and made available to the public;
  • the underwriting or subscription agreement, which is entered into by the issuer, lead managers or dealers, setting out the terms governing the subscription for the debt security offer. It is usually not publicly available (in the case of a base prospectus, this subscription agreement is typically a short-form document that builds upon the terms of an underlying programme-wide programme or dealership agreement);
  • the agency agreement, which is entered into by the issuer and agents (such as the paying agent or calculation agent), setting out the terms and conditions concerning services to be rendered on behalf of the issuer in relation to the notes or the noteholders. It is usually not publicly available;
  • the trust deed and deed of covenant, which sets out the rights of noteholders and responsibilities of the (security) trustee (if applicable). The trust deed or deed of covenant will not be published, but the terms and conditions will generally be included in the prospectus; and
  • any security documents: when the debt securities are secured, security documents will be entered into by, among others, the issuer and the security trustee.

 

Which of these documents are used in a particular transaction depends on the nature of the instrument and the governing law. For example, a vanilla debt instrument governed by Dutch law would typically not involve a deed of covenant or trust deed.

Note that for securitisations, the transaction documents need to be made available to investors, competent authorities and, upon request, potential investors prior to pricing.

Does offering documentation require approval before publication? In what forms should it be available?

Yes, the AFM must review and approve a prospectus (including supplements) before it can be published and before debt securities can be offered to the public or listed and traded on a regulated market. A final prospectus must be submitted to the AFM in PDF format and in a version that can be directly published (including the date, final format and any images). The Prospectus Regulation requires a prospectus to be made available to the public. In this context, issuers will generally also publish their prospectus upon approval on their website. The prospectus may also be made available in other forms provided for in the Prospectus Regulation. The AFM will also publish prospectuses on its website, which the AFM also submits to ESMA for inclusion in its register of approved prospectuses.

Authorisation

Are public offerings of debt securities subject to review and authorisation? What is the time frame for approval? What are the restrictions imposed, if any, on the issuer and the underwriters during the review process?

An issuer seeking to offer debt securities to the public, or admit them to trading on a regulated market, must submit a draft prospectus to the AFM for approval. The AFM has 10 business days to review the prospectus and notify the applicant of its decision. If the prospectus is for public debt securities to be issued for the first time, the time frame for approval is 20 business days. The AFM can approve the prospectus or request the issuer to incorporate additional information in the prospectus in the form of a response sheet, after which it will review the prospectus again within 10 business days. It may be that the procedure is repeated several times before the prospectus is approved, and this is not atypical, in particular, for new issuers.

Once the prospectus has been approved, it can only be amended or supplemented via a supplement in accordance with the terms of the Prospectus Regulation. In principle, the AFM must approve supplements to prospectuses within five business days, although it may occur that the AFM provides comments before a supplement can be approved. Previously, the AFM allowed for the approval of a supplement within one business day if that supplement related exclusively to incorporation by reference to a press release, quarterly report or (semi-)annual financial results of the issuer. This is no longer an officially guaranteed procedure, although similar supplements can typically still be approved quite swiftly.

There are no restrictions imposed on the issuer and underwriters during the review process, other than that they are not allowed to offer the debt securities, and changes can be made to the prospectus and transaction documents (which will also need to be reflected in the prospectus where relevant). Changes to the prospectus will need to be reviewed and approved by the AFM and could therefore result in delays in the approval process. Once a prospectus is approved, and changes are made to the prospectus during an offer by way of a supplement, investors may be entitled to revoke their investment orders pursuant to the Prospectus Regulation.

A preliminary prospectus is typically used for marketing purposes and roadshows, but no debt securities may be marketed in such a way that this constitutes a public offer of debt securities.

On what grounds may the regulators refuse to approve a public offering of securities?

The AFM will only approve a prospectus once it is satisfied that it meets all the requirements set out in the Prospectus Regulations and its underlying regulations. If relevant requirements are not met, it will refuse to approve a prospectus, whether for a public offering or a listing.

How do the rules differ for public and private offerings of debt securities? What types of exemptions from registration are available?

The Prospectus Regulation exempts certain public offers of debt instruments from requiring an approved and published prospectus. These exemptions are related to, among other things:

  • debt securities offered solely to qualified investors;
  • debt securities offered to fewer than 150 natural or legal persons per member state, other than qualified investors;
  • debt securities that can only be acquired for a total consideration of at least €100,000 per investor, per offer;
  • debt securities with a denomination of at least €100,000; and
  • debt securities with a total consideration of less than €5 million in all EEA member states, calculated over a period of 12 months, provided that such offering is notified to the AFM and an information document is provided to the AFM, and a warning is included in marketing and offering materials that there is no requirement to publish a prospectus and that the offering does not fall under the supervision of the AFM.

 

Separate exemptions apply in relation to the admission of trading of debt securities. If one of the exceptions for a public offer applies and the debt securities are admitted to trading on a regulated market, a prospectus is still required in accordance with the Prospectus Regulation unless a separate exemption applies for this admission to trading.

Offering process

Describe the public offering process for debt securities. How does the private offering process differ?

The timetable for a debt securities offering depends on various factors. Most importantly, it depends on whether the issuance is done under an existing debt issuance programme, which can be done within a matter of days or weeks, or as a stand-alone issue, which can take two months or more to complete. A private placement typically takes less time to complete than a public offering, in particular, where no approved prospectus is required.

A deal typically starts with the appointment of the (lead) managers and legal counsel to both the issuer and the managers. Together with the auditors, these parties will agree on the transaction's structural features, draft the transaction documentation and, if applicable, the prospectus, and liaise with relevant third parties, including the AFM, credit rating agencies and third-party service providers. The main transaction documents are:

  • the prospectus;
  • the underwriting or subscription agreement;
  • the agency agreement;
  • the trust deed and deed of covenant; and
  • any security documents.

 

Once the prospectus is in final form (subject to pricing information) and the transaction documents are either signed or in agreed form, a public offering is launched with a public announcement. The marketing often comprises:

  • a roadshow, during which the issuer (and sometimes the arranger or managers) speaks to investors; and
  • an investor information package, which typically include, among other things, an investor presentation, term sheet and a preliminary prospectus.

 

After launching the deal, the issuer, arranger and lead managers answer questions from prospective investors and fill their order book.

During or shortly after the marketing period, the transaction documents are signed. The final prospectus is then submitted for approval to the AFM and, following approval, the notes are issued, and settlement takes place.

Closing documents

What are the usual closing documents that the underwriters or the initial purchasers require in public and private offerings of debt securities from the issuer or third parties?

Closing documents generally include:

  • legal opinions in respect of legal and tax elements relevant to the transaction, including the enforceability of the transaction documents and the capacity of the issuer and other relevant transaction parties, such as guarantors;
  • corporate authorisations and closing certificates;
  • comfort letters;
  • due diligence reports and reliance letters (if applicable); and
  • rating and listing confirmations.
Listing fees

What are the typical fees for listing debt securities on the principal exchanges?

Issuers pay a fee to the AFM for the approval process for a prospectus, information document or supplement. These fees range from €7,500 to €15,000 for the approval process relating to a prospectus for debt securities (depending on the nature of the issuer) and amount to €2,500 for a supplement to the prospectus.

To list medium- or long-term debt securities on Euronext, the following fees can be expected:

  • annual fee: no fee for straight debt securities, and up to €2,500 for issuers of debt securities linked to equity securities;
  • admission fee for a stand-alone debt securities issuance: €165 per tranche of €25 million (with a maximum of €4,000);
  • admission fee for an issuance under a programme: €800 per issuance;
  • annuity fee: between €600 and €700, depending on the issued amount; and
  • maximum fees of €18,000 (stand-alone) or €14,500 (programme).

 

To list short-term debt securities on Euronext, the following fees can be expected:

  • admission fee: €150;
  • per million admitted to Euronext market on a pro rata temporis basis: €10;
  • maximum total fee: €15,000.

Law stated date

Correct on

Give the date on which the information above is accurate.

16 December 2020.