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, CNMV in Spain, etc.) 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.
Pro: Full market access within the EU, increased investor trust.Con: High compliance costs and 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.
Who Can Invest?
Both retail investors (ordinary individuals) and professional investors (qualified entities and high-net-worth individuals, a.k.a. HNWI).
How Much Money Can Be Raised?
There is no limit on the amount you can raise under the EU Prospectus Regulation.
Are There Any 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 of many Member States.
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.
Why Choose EU Prospectus Regulation?
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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