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.