On June 29, the Financial Services and Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 were published. The Regulations make some minor amendments to the Financial Services and Markets Act 2000 (FSMA) for the purposes of the United Kingdom’s implementation of part of the new EU Prospectus Regulation (Prospectus Regulation).
The Prospectus Regulation consolidates the existing EU Prospectus Directive provisions relating to the scope of the requirement to publish a prospectus and makes a number of adjustments to the types of offer and issue of securities captured by the regime. It also introduces an option for EU member states to exempt further offers from the prospectus requirement, provided they notify the European Commission and European Securities and Markets Authority in accordance with the Prospectus Regulation.
The Regulations increase the threshold for offers to the public that are exempt from the obligation to publish a prospectus under FSMA from €100,000 to €8 million.
The Regulations also reduce the threshold for securities exempt from the prospectus regime under FSMA from €5 million to €1 million. According to the Prospectus Regulation, this is intended to prevent the cost of producing a prospectus from being disproportionate to the offering proceeds.
In addition, as part of the United Kingdom’s transposition of the revised Markets in Financial Instruments Directive (MiFID II), the Regulations include other minor amendments to FSMA as well as other primary and secondary legislation.
The Regulations become effective on July 21.
The Prospectus Regulation is available here.