Prospectus Directive implemented

Author: | Published: 1 Dec 2005
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Moussas & Tsibris




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While Greece missed the July 1 implementation deadline, a first draft bill for implementing the Prospectus Directive (PD) into Greek law was published in mid-July. Following a two-month consultation period with market participants, the bill was then presented to the Hellenic parliament in early September and approved on September 28 2005. The new law (Law 3401/2005) came into force on October 17 2005, following publication in the government gazette, repealing the pre-existing legal framework. Since the PD is a maximum harmonization directive, the Greek implementing law closely follows the wording of the Directive.

European passport

The introduction of the European passport is one of the major amendments to the respective legal framework. Based on the principle of mutual recognition and supervision by the competent authorities of the home member state, the law sets out that prospectuses that have been approved by the competent authorities of another member state are valid in Greece without any further approval by the competent authority, the Hellenic Capital Market Commission (CMC), provided that the latter has been notified as appropriate by the competent authority of the home member state.

Scope and exemptions

It is provided that all offers to the public or admissions to trading in a regulated market of securities require a prospectus to be published, following approval by the CMC, unless an exemption is applicable.

The law identifies several such exemptions from the obligation to publish a prospectus. In terms of types of offers, the exemptions are similar to the ones existing under the previous legislation, but are certainly clearer.

The law also establishes a qualified investor regime for individuals and/or small and medium-sized enterprises that meet certain criteria and exempts qualified investors from the obligation to publish a prospectus.

Failure to comply with the obligation to issue a prospectus entails the application of sanctions. The exemptions from the obligation to publish a prospectus do not affect other issuers' obligations provided for in the law.

Prospectus format – language

The Law adopts the tri-partite document system, allowing the issuers to draw up the prospectus either as a single document or by way of three separate documents: a registration document, a securities note and a summary note. The law allows for a prospectus to be drawn up in a language customary in the sphere of international finance, while the CMC can only require that the summary be translated into Greek, in case Greece is the host member state.


Depending on the nature of the issuer and of the securities involved in the offer or admission to trading, the prospectus must contain in a comprehensible manner all information that is necessary for investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to the securities.

The prospectus concerning a public offer or the admission of securities to trading in a regulated market is valid for twelve months from the date of its publication. The validity is contingent upon the completeness of the prospectus by a supplement if a significant new factor, material mistake or inaccuracy relating to the information in the prospectus is identified between the time of publication and the end of the offer period or the commencement of trading in a regulated market.


Following its approval, the prospectus must be published by the issuer, the person making the offer or the person requesting the admission of securities to trading in a regulated market as soon as possible. The law provides various publication alternatives. However, publication in newspapers or handing out copies of the prospectus free to the public must be followed by posting the prospectus on the website of the issuer and underwriters.


Responsibility for the information contained in a prospectus lies with:

  • the issuer, the offeror or the person asking for the admission of securities to trading in a regulated market, as the case may be, and their board members; and
  • any underwriters or advisers.

These persons are liable to those who acquired securities within 12 months from the publication of the prospectus for direct damages attributable to inaccurate or incomplete information negligently or intentionally included in the prospectus. This rule amends a prior civil liability rule in that it extends liability to all persons responsible for issuing a prospectus, includes as possible beneficiaries all investors that acquired securities in the subsequent period of twelve months (as opposed to those buying in the offer only) and prolongs the statute of limitations to three years (compared to one previously). However, no liability derives solely from the summary note, including its translation, unless said note is inaccurate, deceptive or bears no relevance to other parts of the prospectus.


In case of infringement, the implementing decisions and the provisions of the Commission Regulation (EC) Nr. 809/2004, the CMC can issue a reprimand or impose on responsible persons administrative fines, ranging from €3,000 to €1,000,000.

Georgia Plagou and Stratos Voulgaridis