On July 24, the European Commission (the Commission) adopted a legislative proposal to amend the Prospectus Regulation and assist with the recapitalization of companies that have been affected by the COVID-19 pandemic (the Proposal).

The key changes under the Proposal are:

  1. the introduction of a new simplified, short-form, temporary prospectus. The temporary prospectus reduces the number of pages typically required for a prospectus from hundreds to just 30. It will be available in relation to secondary issuances of shares by issuers that are already admitted to trading on a regulated market or a small and medium enterprises (SME) growth market for a continuous period of at least 18 months;
  2. extensions to certain deadlines regarding supplementary prospectuses; and
  3. temporarily increasing the prospectus exemption threshold from EUR 75 million to EUR 150 million for certain non-equity securities issued by a credit institution in a continuous or repeated manner.

The Commission has confirmed that the temporary prospectus regime and the measures mentioned above will expire 18 months after the date of application of the amending Prospectus Regulation.

In order for the proposal to go into effect, it must be adopted by the European Parliament and the Council of the EU.

The Proposal is available here.