Article 29 of the Prospectus Regulation (809/2004) requires a prospectus or base prospectus published in electronic form to be easily accessible when entering the relevant website. The question of whether access to such website can be described as easily accessible when it is subject to various conditions was considered recently by the Advocate General in Michael Timmel v Aviso Zeta AG (Case C-359/12).

The prospectus relevant to the case was published on a website that would only provide access to the document following a complicated registration process involving agreeing to a comprehensive legal disclaimer and providing an email address. Only 2 documents could be freely accessed per month, with access to any additional documents requiring payment of a fee. In the case it was alleged that to obtain all the required information, downloading of at least 3 documents was required.

The national court of Austria asked whether a base prospectus can be said to be “easily accessible” to potential investors entering a website where the issuer grants access subject to certain conditions being met, e.g. (i) there is a registration requirement; or (ii) registration is subject to acceptance of a disclaimer and provision of an email address; or (iii) payment is required; or (iv) no fee is required but free access to the required information as laid down in Article 22(1) of the implementing regulation is restricted to 2 documents per month.

The language of Article 29(1)(1) of the implementing regulation setting out the rules on publication in electronic form is plain in so far as it states that a base prospectus should be easily accessible to an investor when entering the website.

The Advocate General made the following comments:

  • A simple registration requirement could be compatible with that provision if the procedure for investors to register is straightforward. However, a condition such as making access to a website subject to registration, acceptance of a disclaimer and provision of an email address is incompatible with the concept of easy accessibility. Not all potential investors have an email address and such a condition would automatically exclude any investor who does not use email.
  • The imposition of a requirement to accept a disclaimer creates an inequality of arms which is inconsistent with the Prospectus Directive’s aim of investor protection, in so far as the issuer (the party holding the information) is effectively able to impose the disclaimer on the investor but the latter cannot obtain access to necessary information concerning potential investments unless he agrees to accept the disclaimer. Such a condition is likely to dissuade potential investors and/or (potentially, at least) reduce the legal protection that they would otherwise enjoy.
  • Under the Prospectus Directive paper copies of the prospectus should be made available free of charge. Therefore, it would be out of step with that position to permit a fee to be imposed for electronic access to documentation. It is clear that requiring investors to pay a fee to obtain access to a website hinders access and is therefore inconsistent with Article 29(1) of the implementing regulation.
  • Where free access is restricted to 2 documents per month but the information that the investor needs is included in more than 2 documents, such a requirement is plainly inconsistent with the obligation in Article 5(1) of the Prospectus Directive to make available to the investor, in easily analysable and comprehensible form, the information which is necessary for him to make an informed assessment.
  • The Advocate General therefore considered that it is incompatible with Article 29 of the implementing regulation to make access via a website to a prospectus or base prospectus subject to conditions such as: (i) requiring registration subject to acceptance of a disclaimer and provision of an email address; or (ii) requiring payment; or (iii) restricting free access to the required information as laid down in Article 22(1) of the implementing regulation to 2 documents per month.

To view the judgment in full click here.