Implementation Of The Directive 2010/73/EU In Luxembourg Law

The Directive 2010/73/EU dated 24 November 2010, amending the directive 2003/71/EC (the "Directive"), aims at simplifying rules on prospectuses for securities and on information about the issuers of transferable securities on financial markets, and at upgrading investor protection. Said directive forms part of a legislative simplification plan agreed by the European Council in March 2007 with the aim of boosting the competitiveness of European companies by reducing administrative burdens that generate costs and inefficiencies.

On 3 July 2012, the law aiming at implementing the directive (the "Law") was voted, amending both the prospectus law dated 10 July 2005 and the transparency law dated 11 January 2008, as further detailed hereunder.

Qualified investors redefined

In order to facilitate private placements falling within the exemption available for offers to "qualified investors," the definition of qualified investor has been aligned with the definitions of professional clients and eligible counterparties set out in the Financial Markets Directive (MiFID). This change is intended to reduce the complexity and costs of private placements by allowing security issuers to rely on their lists of professional clients and eligible counterparties already in place.

Increase of EUR 50,000 threshold

Before entry into force of the Law, offers made to investors who acquired securities for a total consideration of at least EUR 50,000 were exempt from the requirement of an approved prospectus. Securities with a denomination of at least EUR 50,000 were likewise exempted. This threshold is now increased to EUR 100,000 by reference in the Law to the limits set forth by the Directive, with the argument that the 50,000 threshold no longer reflected the distinction between retail investors and professional investors in terms of investment capacity.

The same increase of the threshold, previously fixed at EUR 50,000, is enacted in the transparency law dated 11 January 2008. Under said law, issuers with minimum denominations of EUR 50,000 were exempted from the obligation to publish annual and semi-annual reports as well as further reporting obligations. In this regard, it should be noted that the increased threshold is applicable as of 31 December 2010, so that any securities admitted or to be admitted to an EU–regulated market from this date on need to be issued in denominations of at least EUR 100,000 in order to benefit from this exemption.

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