On January 9, the European Commission launched a consultation on the application of the EU Prospectus Directive (2003/71/EC). Following discussions with the Committee of European Securities Regulators and the European Securities Markets Expert Group, the Commission considers that some aspects of the Prospectus Directive (which has been in force since July 2005) now merit a review and has put forward proposals in the consultation to improve and simplify the Directive.

The Prospectus Directive introduced a "single passport for issuers", making securities available to investors either through a public offer procedure or by admitting their shares to trading. Once approved by the regulatory authority of one EU Member State, a prospectus must be accepted in any other EU Member State. The Directive aims to ensure that investors are provided with clear and comprehensive information when making investment decisions.  

Particularly, the Commission suggests measures to address: (i) definition of qualified investors; (ii) revision of exempt offers; (iii) revision of annual disclosure obligation; (iv) time limit for exercise of right of withdrawal; and (v) certain thresholds of the Prospectus Directive.  

The consultation also considers issues that have been brought to the Commission's attention such as the effectiveness of the prospectus summary, disclosure requirements for government guaranteed offers and disclosure requirements for small quoted companies and rights issues.  

The consultation closes on March 10.  

www.ec.europa.eu/internal_market/consultations/docs/2009/prospectus/background_en.pdf