The European Securities and Markets Authority
(Esma) has launched a Prospectus Directive consultation. The
paper, released on June 15, is seeking comments on the
technical advice it proposes to give the EC on delegated
Esma is seeking comments by July 15. View the
consultation paper here
Much attention has centred on final terms. The
consultation has requested a fully completed summary for the
individual issue merged into the final terms
"I find this slightly worrying," said one source.
He argued that the summary is the introduction to the base
prospectus, intended only to help investors in their reading of
"The idea of separately completing the summary and
adding it onto the final terms goes back to the short-form idea
of simply ignoring the prospectus," he added.
The paper suggests other more onerous requirements
regarding final terms, available to view here.
"All these things are small, incrementally, but
they are turning what has been an efficient issuance mechanism
into a more cumbersome one," said the source.
The source believed this could be exacerbated in
the volatile, tighter listing windows of the current market,
where issuers’ programs need to be perfect in
order to launch quickly.
"The slightest thing being changed might mean an
updated prospectus, which could throw them out of the issuance
window. How would that impact funding?"
There are also problems surrounding the readability
requirements of a prospectus. The more information included up
front, the more it hits the readability requirement. Issuers
will then have to break down their programmes into individual
ones, which will add to costs.
In January the EC requested Esma to advise on
possible delegated acts concerning the Prospectus Directive as
amended by Directive 2010/73.
Esma has been asked to deliver its advice by
September 30. But in an executive statement on its website, the
regulator said it would deliver its advice on the areas also
included in section 3.3 by September 30 ('Instructions in
relation to the requirements of the securities note schedules
and the building blocks’).
The regulator has asked those providing comments to
indicate material concerns over the impact of the advice being