Council of the European Union Adopts Amendments to Prospectus Directive

The amendments to the Prospectus Directive aim to address deficiencies in the existing legal framework relating to securities prospectuses with a view of improving legal clarity and reducing burdens for issuers and intermediaries, while at the same time enhancing investor protection.

On 11 October 2010, the Council of the European Union adopted a new directive amending the Prospectus Directive 2003/71/EC and the Transparency Directive 2004/109/EC. The new directive is expected to be published in the Official Journal of the European Union shortly and has to be implemented by Member States into their national law within 18 months of the 20th day following publication in the Official Journal.

Key amendments

Key changes proposed by the new directive relate to the following:

Form of summary of prospectus

The form of the prospectus summary will be further harmonized as to format and content. This shall facilitate comparability of summaries of similar products. The summary shall serve as the key source of information for retail investors. It shall, in a concise and non-technical language provide key information on the following: (i) a short description of the...