To meet the deadline for transposition of the EU Prospectus
Directive, legislation aiming to implement the Directive into the
1995 Act on the Supervision of the Securities Trade (Wte 1995) was
submitted to Dutch parliament in March 2005. A consultation
document describing the necessary amendments to the 1995 Decree on
the Supervision of the Securities Trade (Bte 1995) has also been
published and a similar document for the Exemption Regulation
relating to the Wte 1995 is expected shortly.
Although some of the most relevant implementing legislation has
not yet been finalized, it is expected that the Prospectus
Directive will be implemented in the Netherlands on July 1
2005.
The Prospectus Directive aims to harmonize - using the principle
of maximum harmonization - the requirements for drawing up,
approving and distributing the prospectus to be published when
securities are offered to the public or admitted to trading on a
regulated market in the EU. The Dutch implementing legislation is
drafted to amend the Wte 1995 so that it will be prohibited to
offer securities that fall within the scope of the Prospectus
Directive in the Netherlands, unless a prospectus that is approved
by the Dutch Authority for the Financial Markets (AFM) or a
competent authority in another EU member state is made publicly
available.
The Bte 1995 will contain detailed provisions relating to the
contents, form and validity of a prospectus, and the Exemption
Regulation will provide for the exemptions from the prospectus
requirement. Securities that do not fall within the scope of the
Prospectus Directive, such as non-transferable securities, will
remain subject to the provisions of Dutch securities laws.
The proposed legislation will introduce several new exemptions
from the offering prohibition contained in the Wte 1995. Examples
are those for offers targeted at fewer than 100 persons in each
member state (not including qualified investors), for offers of
securities with a total consideration of less than €100,000
calculated over 12 months and for offers with a total consideration
of less than €2.5 million within a 12-month period. Furthermore, as
the new offering prohibition will not extend to offers made from
within the Netherlands, the present exemption for offers to
non-residents of the Netherlands is no longer required. Moreover,
the Dutch Minister of Finance has indicated that natural persons
and small and medium-sized enterprises can be considered qualified
investors for purposes of the exemption for offers to qualified
investors. This will allow a more frequent use of the exemption for
offers to qualified investors, which is at present reserved for
offers to individuals and legal entities trading or investing in
securities in the course of a profession or business.
Another consequence of the implementation of the Prospectus
Directive will be that the AFM will be the Dutch competent
authority for the review and approval of prospectuses for offers to
the public and admission to regulated markets. At present, Euronext
Amsterdam reviews and approves prospectuses for securities listed
on its stock exchange. Prospectuses for non-listed offers are filed
with, but not reviewed or approved by, the AFM.
The AFM will probably charge €680 (supplemental documents),
€3,200 (non-equity securities) and €9,600 (equity securities) for
its review. The AFM had initially proposed amounts up to
€28,000.
The transition of the authority to approve prospectuses from
Euronext Amsterdam to the AFM will, together with changing the
requirements relating to the contents of prospectuses, create
practical difficulties around July. To deal with these, the AFM has
adopted a system whereby issuers may request the AFM to read new
disclosure documents for compliance with the Prospectus Directive
requirements. If the AFM concludes that the document complies with
the new requirements, then the regulator will issue a written
notice to this effect. Subject to changes to the definitive
legislation and new developments affecting the issuing institution,
the AFM will approve the document on the day of the formal
submission after July 1 2005 if the issuer declares that the
prospectus is identical to the one previously submitted and
approved and if there is no reason to amend it.
Alexander Harmse