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PRR 5.1 Validity of prospectus

Validity of prospectus

PRR 5.1.1 EU

1Article 12 of the Prospectus Regulation provides for the validity of a prospectus, registration document or a universal registration document:

Article 12

Validity of a prospectus, registration document and universal registration document

  1. 1. A prospectus, whether a single document or consisting of separate documents, shall be valid for 12 months after its approval for offers to the public or admissions to trading on a regulated market, provided that it is completed by any supplement required pursuant to Article 23.

    Where a prospectus consists of separate documents, the period of validity shall begin upon approval of the securities note.

  2. 2. A registration document which has been previously approved shall be valid for use as a constituent part of a prospectus for 12 months after its approval.

    The end of the validity of such a registration document shall not affect the validity of a prospectus of which it is a constituent part.

  3. 3. A universal registration document shall be valid for use as a constituent part of a prospectus for 12 months after its approval as referred to in the first subparagraph of Article 9(2) or after its filing as referred to in the second subparagraph of Article 9(2).

    The end of the validity of such a universal registration document shall not affect the validity of a prospectus of which it is a constituent part.

PRR 5.2 Certificate of approval

Certificate of approval – prospectus

PRR 5.2.1 EU

1Article 25(1) and (2) provides:

Article 25

Notification of prospectuses and supplements and communication of final terms

  1. 1. The competent authority of the home Member State shall, at the request of the issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the prospectus and within one working day following receipt of that request or, where the request is submitted together with the draft prospectus, within one working day following the approval of the prospectus, notify the competent authority of the host Member State with a certificate of approval attesting that the prospectus has been drawn up in accordance with this Regulation and with an electronic copy of that prospectus.

    Where applicable, the notification referred to in the first subparagraph shall be accompanied by a translation of the prospectus and any summary, produced under the responsibility of the issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the prospectus.

    The same procedure shall be followed for any supplement to the prospectus.

    The issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the prospectus shall be notified of the certificate of approval at the same time as the competent authority of the host Member State.

  2. 2. Any application of the provisions of Article 18(1) and (2) shall be stated in the certificate of approval, as well as its justification.

Certificate of approval – registration documents or universal registration documents

PRR 5.2.2 EU

1Article 26(1) to (5) provides:

Article 26

Notification of registration documents or universal registration documents

  1. 1. This Article shall only apply to issues of non-equity securities referred to in point (m)(ii) of Article 2 and to issuers established in a third country referred to in point (m)(iii) of Article 2, where the home Member State chosen for the prospectus approval pursuant to those provisions is different from the Member State whose competent authority has approved the registration document or universal registration document drawn up by the issuer, the offeror or the person asking for admission to trading on a regulated market.

  2. 2. A competent authority that has approved a registration document, or a universal registration document and any amendments thereto, shall, at the request of the issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up such document, notify the competent authority of the home Member State for the prospectus approval with a certificate of approval attesting that the registration document, or universal registration document and any amendments thereto, has been drawn up in accordance with this Regulation and with an electronic copy of that document. That notification shall be made within one working day following receipt of the request or, where the request is submitted together with the draft registration document or draft universal registration document, within one working day following the approval of that document.

    Where applicable, the notification referred to in the first subparagraph shall be accompanied by a translation of the registration document, or universal registration document and any amendments thereto, produced under the responsibility of the issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up such documents.

    The issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the registration document, or the universal registration document and any amendments thereto, shall be notified of the certificate of approval at the same time as the competent authority of the home Member State for the prospectus approval.

    Any application of the provisions of Article 18(1) and (2) shall be stated in the certificate, as well as its justification.

    The competent authority that has approved the registration document, or the universal registration document and any amendments thereto, shall notify ESMA of the certificate of approval of those documents at the same time as it is notified to the competent authority of the home Member State for the prospectus approval.

    No fee shall be charged by those competent authorities for the notification, or receipt of notification, of registration documents, or universal registration documents and any amendments thereto, or any related supervisory activity.

  3. 3. A registration document or universal registration document notified pursuant to paragraph 2 may be used as a constituent part of a prospectus submitted for approval to the competent authority of the home Member State for the prospectus approval.

    The competent authority of the home Member State for the prospectus approval shall not undertake any scrutiny nor approval relating to the notified registration document, or universal registration document and any amendments thereto, and shall approve only the securities note and the summary, and only after receipt of the notification.

  4. 4. A registration document or a universal registration document notified pursuant to paragraph 2 shall contain an appendix setting out the key information on the issuer referred to in Article 7(6). The approval of the registration document or universal registration document shall encompass the appendix.

    Where applicable pursuant to the second subparagraph of Article 27(2) and the second subparagraph of Article 27(3), the notification shall be accompanied by a translation of the appendix to the registration document or universal registration document produced under the responsibility of the issuer, offeror or person responsible for drawing up the registration document or the universal registration document.

    When drawing up the summary, the issuer, offeror or person responsible for drawing up the prospectus shall reproduce the content of the appendix without any changes in the section referred to in point (b) of Article 7(4). The competent authority of the home Member State for the prospectus approval shall not scrutinise that section of the summary.

  5. 5. Where a significant new factor, material mistake or material inaccuracy arises or is noted within the timeframe specified in Article 23(1) and relates to the information contained in the registration document or the universal registration document, the supplement required pursuant to Article 23 shall be submitted for approval to the competent authority which approved the registration document or the universal registration document. That supplement shall be notified to the competent authority of the home Member State for the prospectus approval within one working day following its approval, under the procedure set out in paragraphs 2 and 3 of this Article.

    Where a registration document or a universal registration document is simultaneously used as a constituent part of several prospectuses, as provided for in Article 23(5), the supplement shall be notified to each competent authority which has approved such prospectuses.

Requests to the FCA to supply a certificate of approval

PRR 5.2.3 G

  1. 1(1) The following guidance applies to a request by a person to the FCA to supply information referred to in article 25 of the Prospectus Regulation to the competent authority of a relevant Host State.

  2. (2) The request should be in writing and should include:

    1. (a) the relevant prospectus as approved (if it has already been approved);

    2. (b) a translation of the summary if required by the competent authority of a relevant Host State; and

    3. (c) any information reasonably required by the FCA to enable it to supply the information to the other competent authority.

      [Note: Information on the required data and format of submission can be found on the Markets section of the FCA website.]

PRR 5.2.4 G

1The FCA will inform the person who made the request as soon as practicable after it has supplied the information to the other competent authority.

Certificate received from another competent authority

PRR 5.2.5 G

1If the FCA receives information referred to in article 25 of the Prospectus Regulation from another competent authority it will as soon as practicable give notice on the FCA website that it has received the information.

PRR 5.3 Persons responsible for a prospectus

Rules only apply if UK is Home State

PRR 5.3.1 R

1The rules in this section only apply in respect of a prospectus if the United Kingdom is the Home State for the issuer in relation to the transferable securities to which the prospectus relates.

Equity shares

PRR 5.3.2 R
  1. (1)

    1This rule applies to a prospectus relating to:

    1. (a)

      equity shares;

    2. (b)

      warrants or options to subscribe for equity shares, that are issued by the issuer of the equity shares; and

    3. (c)

      other transferable securities that have similar characteristics to transferable securities referred to in paragraphs (a) or (b).

  2. (2)

    Each of the following persons are responsible for the prospectus:

    1. (a)

      the issuer of the transferable securities;

    2. (b)

      if the issuer is a body corporate:

      1. (i)

        each person who is a director of that body corporate when the prospectus is published;

      2. (ii)

        each person who has authorised themselves to be named, and is named, in the prospectus as a director or as having agreed to become a director of that body corporate either immediately or at a future time; and

      3. (iii)

        each person who is a senior executive of any external management company of the issuer;

    3. (c)

      each person who accepts, and is stated in the prospectus as accepting, responsibility for the prospectus;

    4. (d)

      in relation to an offer:

      1. (i)

        the offeror, if this is not the issuer; and

      2. (ii)

        if the offeror is a body corporate and is not the issuer, each person who is a director of the body corporate when the prospectus is published;

    5. (e)

      in relation to a request for the admission to trading of transferable securities:

      1. (i)

        the person requesting admission, if this is not the issuer; and

      2. (ii)

        if the person requesting admission is a body corporate and is not the issuer, each person who is a director of the body corporate when the prospectus is published; and

    6. (f)

      each person not falling within any of the previous paragraphs who has authorised the contents of the prospectus.

PRR 5.3.3 R

1In PRR 5.3.2R(2)(b)(iii), external management company means in relation to an issuer that is a company which is not a collective investment undertaking, a person who is appointed by the issuer (whether under a contract of service, a contract for services or any other commercial arrangement) to perform functions that would ordinarily be performed by officers of the issuer and to make recommendations in relation to strategic matters.

PRR 5.3.4 G

1In considering whether the functions the person performs would ordinarily be performed by officers of the issuer, the FCA will consider, among other things:

  1. (1)

    the nature of the board of the issuer to which the person provides services, and whether the board has the capability to act itself on strategic matters in the absence of that person’s services;

  2. (2)

    whether the appointment relates to a one-off transaction or is a longer-term relationship; and

  3. (3)

    the proportion of the functions ordinarily performed by officers of the issuer that is covered by the arrangement.

All other securities

PRR 5.3.5 R
  1. (1)

    1This rule applies to a prospectus relating to transferable securities other than those to which PRR 5.3.2R applies.

  2. (2)

    Each of the following persons are responsible for the prospectus:

    1. (a)

      the issuer of the transferable securities;

    2. (b)

      each person who accepts, and is stated in the prospectus as accepting, responsibility for the prospectus;

    3. (c)

      in relation to an offer, the offeror of the transferable securities, if this is not the issuer;

    4. (d)

      in relation to a request for an admission to trading of transferable securities, the person requesting admission, if this is not the issuer;

    5. (e)

      if there is a guarantor for the issue, the guarantor in relation to information in the prospectus that relates to the guarantor and the guarantee; and

    6. (f)

      each person not falling within any of the previous paragraphs who has authorised the contents of the prospectus.

Issuer not responsible if it has not authorised offer or admission to trading

PRR 5.3.6 R

1A person is not responsible for a prospectus under PRR 5.3.2R(2)(a) or (b) or PRR 5.3.5R(2)(a) if the issuer has not made or authorised the offer or the request for admission to trading in relation to which the prospectus was published.

Publication without director’s consent

PRR 5.3.7 R

1A person is not responsible for a prospectus under PRR 5.3.2R(2)(b)(i) if it is published without their knowledge or consent and on becoming aware of its publication they, as soon as practicable, gives reasonable public notice that it was published without their knowledge or consent.

Offeror not responsible in certain circumstances

PRR 5.3.8 R

1A person is not responsible for a prospectus under PRR 5.3.2R(2)(d) or PRR 5.3.5R(2)(c) if:

  1. (1)

    the issuer is responsible for the prospectus in accordance with the rules in this section;

  2. (2)

    the prospectus was drawn up primarily by the issuer, or by one or more persons acting on behalf of the issuer; and

  3. (3)

    the offeror is making the offer in association with the issuer.

Person may accept responsibility for, or authorise, part of contents

PRR 5.3.9 R

1A person who accepts responsibility for a prospectus under PRR 5.3.2R(2)(c) or PRR 5.3.5R(2)(b) or authorises the contents of a prospectus under PRR 5.3.2R(2)(f) or PRR 5.3.5R(2)(f), may state that they do so only in relation to specified parts of the prospectus, or only in specified respects, and in that case the person is responsible under those paragraphs:

  1. (1)

    only to the extent specified; and

  2. (2)

    only if the material in question is included in (or substantially in) the form and context to which the person has agreed.

Advice in professional capacity

PRR 5.3.10 R

1Nothing in the rules in this section is to be construed as making a person responsible for any prospectus by reason only of the person giving advice about its contents in a professional capacity.

PRR 5.4 Miscellaneous

Information to be disclosed to all investors to whom offer addressed

PRR 5.4.1 EU

1Article 22(5) of the Prospectus Regulation provides:

Article 22

Advertisements

…

  1. 5. In the event that material information is disclosed by an issuer or an offeror and addressed to one or more selected investors in oral or written form, such information shall, as applicable, either:

    1. (a) be disclosed to all other investors to whom the offer is addressed, in the event that a prospectus is not required to be published in accordance with Article 1(4) or (5); or

    2. (b) be included in the prospectus or in a supplement to the prospectus in accordance with Article 23(1), in the event that a prospectus is required to be published.

Exercise of powers under section 87K or 87L of the Act

PRR 5.4.2 G

1Under sections 87K and 87L of the Act, the FCA has various powers including powers to prohibit, restrict or suspend an offer and to prohibit, restrict or suspend an advertisement. The FCA will use these powers if it is necessary to protect investors or the smooth operation of the market is, or may be, jeopardised.

Calculation of amounts not denominated in euros

PRR 5.4.3 R

1For the purposes of articles 7(1) and 27(5) of the Prospectus Regulation, a reference to an amount denominated in euros is also a reference to an equivalent amount.

PRR 5.4.4 R

1For the purposes of PRR 5.4.3R, an amount is an “equivalent amount” if it is an amount of equal value denominated wholly or partly in another currency or unit of account, calculated at:

  1. (1)

    in relation to a prospectus drawn up as a single document, the date on which the prospectus is approved;

  2. (2)

    in relation to a prospectus consisting of a registration document or a universal registration document together with a securities note and a summary, the date on which the registration document or the universal registration document is approved;

  3. (3)

    in relation to a prospectus consisting of a base prospectus and final terms of the offer, the date on which the final terms are filed.

Property valuation reports

PRR 5.4.5 G

1To comply with paragraph 130 of the ESMA Prospectus Recommendations (to the extent applicable) the FCA would expect a valuation report for a property company to be in accordance with either:

  1. (1)

    the Appraisal and Valuation Standards (5th edition) issued by the Royal Institution of Chartered Surveyors; or

  2. (2)

    the International Valuation Standards (7th edition) issued by the International Valuation Standards Committee.

PRR 5.4.6 G

1To comply with item 2.7 of Annex 4 of the PR Regulation, the FCA would also expect a valuation report for a property collective investment undertaking to comply with a relevant standard set out in PRR 5.4.5G.