EU Prospectus Regulation

EU Prospectus Regulation (PR) – Mandatory for Public Offerings

Under Regulation (EU) 2017/1129, an issuer must prepare a prospectus if they offer securities to the public or seek admission to a regulated trading venue (such as an exchange).

• The prospectus must be approved by a national financial authority (e.g., BaFin in Germany, AMF in France, or CNMV in Spain) before distribution.

• It must contain detailed financial disclosures, risk assessments, and investor information.

• Once approved in one EU country, the prospectus is passportable across the entire EEA, allowing an STO to target investors in multiple jurisdictions.

Advantages: Full market access within the EU, increased investor trust.

Limitations: High compliance costs, extensive reporting obligations.

The full prospectus framework is designed for large-scale offerings targeting a broad audience across the EU. It involves detailed disclosures and compliance requirements but allows unrestricted access to EU investors.

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Target Investors

• Both retail investors (ordinary individuals) and professional investors (qualified entities and HNWI).

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Offering Cap

• Unlimited—issuers can raise any amount of capital.

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Restrictions

• Requires full approval under the EU Prospectus Regulation, including comprehensive documentation.

• Disclosure requirements include financial statements, risk factors, governance details, and the terms of the offering.

• If the offering spans multiple EU countries, the prospectus summary must be translated into the local languages in many Member States.

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Compliance Notes

• Approved prospectuses enable passporting, meaning the issuer can solicit investors across all EU member states without additional approvals.

• Issuers must adhere to ongoing reporting obligations, such as annual disclosures and updates on material changes.

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Why Choose This Framework?

Full prospectus registration is the best choice for issuers with ambitious fundraising goals targeting both retail and professional investors across the EU. It provides maximum reach and regulatory clarity but involves higher costs and preparation time.

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