What's happened?

The long-awaited directive setting out the final text of the amendments to the EU Prospectus Directive and Transparency Directive has been published in the EU's Official Journal. This means that it will come into force on 31 December 2010, leaving Member States until 1 July 2012 to implement changes to their national legislation to bring the rules into their local law.

What is the key change with immediate impact?

The key provision which requires action now is the change of bond denomination threshold between the "retail" and "wholesale" regimes from €50,000 to €100,000 denominations (or equivalent amount in other currencies at the issue date).

Which bond issuers should act now?

The immediate impact falls on any issuer who wants to continue to be treated as a "wholesale" issuer exempt from ongoing financial reporting requirements under the Transparency Directive. The newly published amending directive contains a grandfathering provision which provides that the "wholesale" exemption will only be available to issuers of debt securities with a minimum denomination of €50,000 admitted to trading on a "regulated market" issued on or before 30 December 2010. After that date, if an issuer does an issue with a €50,000 denomination it will be classed as a "retail" issuer for TD purposes with the attendant increase in the level of periodic financial reporting it must publish to the market. Issuers who want to remain in the "wholesale" TD reporting regime must, therefore, issue in denominations of €100,000 from 31 December 2010.


Because the market has known for a few months that there would be no grandfathering for future tap issues provided for in the amending directive, many issuers had already moved to €100,000 (or equivalent) denominations for recent issues so this is not going to come as a shock to most market participants. The publication of the directive is simply a confirmation of a concrete date when issuers wanting to remain in the "wholesale" TD reporting regime must make their move to €100,000 denominations if they have not already done so.

Click on this link to download the amending directive (2010/71/EC) in English.