In-depth Listed companies & corporate financing: Equity markets

Prospectus Directive revised and transposed

Published on December 3, 2012

The revision of the “Prospectus” Directive by Directive 2010/73/EU of 24 November 2010 introduced or amended a number of provisions with which issuers must now comply. These provisions have been transposed at both legislative (order) and regulatory (decrees and AMF General Regulation) levels. This transposal was carried out in two stages, with first an amendment of the AMF General Regulation in July 2012 and then amendments to the law (by order) and decrees in November 2012. The latest amendments to the General Regulation further to this law are currently under approval.

Main provisions of Order n° 2012-1240 of 8 November 2012 transposing the Prospectus Directive

  • The period during which the occurrence of a new event should be mentioned in a supplement to the prospectus is specified: this period falls “between the approval of the prospectus and the final closing of the offer or, where applicable, the start of trading on a regulated market if this event occurs later”. The law also stipulates that the summary note, and any translation of it, must give rise to a supplement, if necessary, in order to take the new information featuring in the supplement into account;
  • The threshold above which there is no periodic disclosure requirement for debt securities is raised from €50,000 to €100,000, although there is a “grandfather clause” for debt securities with a nominal value of at least €50,000 and which were admitted prior to 31 December 2010;
  • The threshold below which an offer of financial securities other than equity securities issued on a continuous or repeated basis by credit institutions is not subordinated to the obligations governing offers of securities to the public is specified, with an amount fixed in reference to the AMF General Regulation;
  • The provisions under which the liability of an issuer cannot be invoked solely on the basis of the prospectus summary, except in certain specified cases, are completed.

Main provisions of Decree n° 2012-1242 of 8 November 2012

  • An increase from €50,000 to €100,000 of the threshold above which the issuer can choose the location for the meeting of bondholders, with a “grandfather clause” for bondholders with bonds admitted to trading before 31 December 2010.

Main provisions of Decree n° 2012-1243 of 8 November 2012

  • The threshold for the list of qualified investors is raised from 100 to 150 persons;
  • Any natural or legal persons that were registered in the qualified investors file (and therefore not qualified investors by nature) shall not automatically have the status of professional client and may not invoke their registration in the qualified investors file for transactions that require this status (Article D. 411-4 of the Monetary and Financial Code).

In order to be entitled to claim professional client status, any such person must now fulfil at least two of the three criteria stipulated in Article D. 533-11 of the Monetary and Financial Code:

  • A total balance sheet of at least €20 million,
  • Net sales or net revenues of at least €40 million,
  • Shareholders’ equity of at least €2 million;

Failing this, any such person must apply to be treated under the professional client option on the terms set out in Article 314-6 of the AMF General Regulation. The investment services provider then conducts an assessment aiming, among other things, to ensure that the person fulfils at least two of the following criteria:

  • hold a portfolio of financial instruments worth more than €500,000;
  • have carried out an average of at least ten trades per quarter in financial instruments, all of which significant in size, over the previous four quarters;
  • have held a professional position in the financial sector for at least one year that required knowledge of investments in financial instruments.

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Head of publications: The Executive Director of AMF Communication Directorate.
Contact: Communication Directorate – Autorité des marches financiers 17 place de la Bourse – 75082 Paris cedex 02