As reported in our June 2017 Clients and Friends Newsletter the new EU Prospectus Regulation will replace the current EU Prospectus Directive as of July 21, 2019, at which time virtually all equity compensation grants to employees in Europe will be exempt from the prospectus requirements.

However, one provision of the new EU Prospectus Regulation will come into effect on July 21, 2018 and may be problematic for some companies. More specifically, the exclusion from the prospectus requirements for EU/EEA offerings with a value of EUR 5 million during a 12-month period will be decreased to EUR 1 million, with each EU/EEA country having the discretion to establish a country-specific threshold of up to EUR 8 million. Offerings made before July 21, 2018 will still be able to rely on the current EUR 5 million exclusion under the existing EU Prospectus Directive.