Implementation Of The New Prospectus Regime In Luxembourg

As of 21 July 2019, a new Luxembourg law on prospectuses for securities came into effect (the New Prospectus Law), repealing and replacing the Luxembourg law of 10 July 2005 on prospectuses for securities (the Law of 2005).

  1. Background

    The New Prospectus Law implements Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (the New Prospectus Regulation).

    Being a EU regulation, the New Prospectus Regulation is directly applicable throughout the EU, but leaves the Member States with some level of discretion with respect to certain provisions relating to applicable thresholds.

    This new regime applies to prospectuses approved on or after 21 July 2019, whilst the prospectuses approved before that date in accordance with the Law of 2005 continue to be governed by the former regime until the end of their validity period or 21 July 2020.

  2. Key changes of the new regime

    a. Increase of exemption thresholds

    Offers of securities to the public with a total consideration of less than EUR 8,000,000 in the European Union over a period of 12 months are exempted from the obligation to publish a prospectus in accordance with the New Prospectus Regulation. An information note is required and must be published in case of an offering of securities to the public with a total consideration of at least EUR 5,000,000 and lower than EUR 8,000,000 over a period of 12 months. Such note shall set out certain information about the issuer, the guarantor (if applicable), the securities, the conditions, and the reasons for the securities' offering. → a notification has to be made to the Luxembourg financial sector regulator (the CSSF) to benefit from this exemption, but no formal approval of the CSSF is required.

    → this exemption should prove particularly attractive for smaller businesses who may in the past have been deterred by the obligation to publish a prospectus...

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