Related provisions for SUP 1A.4.7
Sections 85 and 86 of the Act provide for when a prospectus approved by the FCA will be required:
85 |
(1) |
It is unlawful for transferable securities to which this subsection applies to be offered to the public in the United Kingdom unless an approved prospectus has been made available to the public before the offer is made. |
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(2) |
It is unlawful to request the admission of transferable securities to which this subsection applies to trading on a regulated market situated or operating in the United Kingdom unless an approved prospectus has been made available to the public before the request is made. |
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(3) |
A person who contravenes subsection (1) or (2) is guilty of an offence and liable – |
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(a) |
on summary conviction, to imprisonment for a term not exceeding 3 months or a fine not exceeding the statutory maximum or both; |
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(b) |
on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine or both. |
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(4) |
A contravention of subsection (1) or (2) is actionable, at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty. |
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(5) |
Subsection (1) applies to all transferable securities other than – |
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(a) |
those listed in Schedule 11A; |
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(b) |
such other transferable securities as may be specified in prospectus rules [see PR 1.2.2 R]. |
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(6) |
Subsection (2) applies to all transferable securities other than – |
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(a) |
those listed in Part 1 of Schedule 11A; |
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(b) |
such other transferable securities as may be specified in prospectus rules [see PR 1.2.3 R]. |
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(7) |
"Approved prospectus" means, in relation to transferable securities to which this section applies, a prospectus approved by the competent authority of the home State in relation to the issuer of the securities. |
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86 |
Exempt offers to the public |
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(1) |
A person does not contravene section 85(1) if – |
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(a) |
the offer is made to or directed at qualified investors only; |
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(b) |
the offer is made to or directed at fewer than 1502 persons, other than qualified investors, per EEA State; |
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(c) |
the minimum consideration which may be paid by any person for transferable securities acquired by him pursuant to the offer is at least 100,0003 euros (or an equivalent amount); 3 |
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(d) |
the transferable securities being offered are denominated in amounts of at least 100,0003 euros (or equivalent amounts); 33 |
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(e) |
the total consideration for the transferable securities being offered in the EEA states3 cannot exceed 100,000 euros (or an equivalent amount); or3 3 |
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3(f) |
the offer falls within subsection (1A). |
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3(1A) |
An offer (“the current offer”) falls within this subsection where transferable securities are resold or placed through a financial intermediary where: |
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3(a) |
the transferable securities have previously been the subject of one or more offers to the public; |
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3(b) |
in respect of one or more of those previous offers, any of paragraphs (a) to (e) of subsection (1) applied; |
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3(c) |
a prospectus is available for the securities which has been approved by a competent authority no earlier than 12 months before the date the current offer is made; and |
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3(d) |
the issuer or other person who was responsible for drawing up the prospectus has given written consent to the use of the prospectus for the purpose of the current offer. |
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(2) |
Where - |
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(a) |
a person who is not a qualified investor ("the client") has engaged a qualified investor falling within point (1) of Section 1 of Annex II to the markets in financial instruments directive3 to act as his agent; and 3 |
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(b) |
the terms on which the qualified investor is engaged enable him to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client, |
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an offer made to or directed at the qualified investor is not to be regarded for the purposes of subsection (1) as also having been made to or directed at the client. |
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(3) |
For the purposes of subsection (1)(b), the making of an offer of transferable securities to – |
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(a) |
trustees of a trust, |
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(b) |
members of a partnership in their capacity as such, or |
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(c) |
two or more persons jointly, |
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is to be treated as the making of an offer to a single person. |
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(4) |
In determining whether subsection (1)(e) is satisfied in relation to an offer ("offer A"), offer A is to be taken together with any other offer of transferable securities of the same class made by the same person which – |
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(a) |
was open at any time within the period of 12 months ending with the date on which offer A is first made; and |
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(b) |
had previously satisfied subsection (1)(e). |
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(5) |
For the purposes of this section, an amount (in relation to an amount denominated in euros) is an "equivalent amount" if it is an amount of equal value denominated wholly or partly in another currency or unit of account. |
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(6) |
The equivalent is to be calculated at the latest practicable date before (but in any event not more than 3 working days before) the date on which the offer is first made. |
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(7) |
"Qualified investor" in relation to an offer of transferable securities,3 means – |
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(a) |
a person described in points (1) to (4) of Section I of Annex II to the markets in financial instruments directive, other than a person who, before the making of the offer, has agreed in writing with the relevant firm (or each of the relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II to that directive;3 3 |
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(b) |
a person who has made a request to one or more relevant firms to be treated as a professional client in accordance with Section II of Annex II to that directive and has not subsequently, but before the making of the offer, agreed in writing with that relevant firm (or each of those relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II to that directive;3 3 |
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(c) |
a person who is recognised as an eligible counterparty in accordance with article 24 of that directive and has not, before the making of the offer, agreed in writing with the relevant firm (or each of the relevant firms) to be treated as a non-professional client in accordance with the final paragraph of Section I of Annex II of that directive;3 3 |
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3(d) |
a person whom any relevant firm is authorised to continue to treat as a professional client in accordance with article 71(6) of that directive. |
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3(8) |
In subsection (7) “relevant firm” means an investment firm or credit institution acting in connection with the offer. |
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3(9) |
Investment firms and credit institutions must communicate their classification of their clients as being or not being qualified investors on request to an issuer, subject to complying with the Data Protection Act 1998 or any directly applicable EU legislation relating to data protection. |
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3(10) |
In subsections (8) and (9) - “credit institution” means - (a) a credit institution authorised under the banking consolidation directive; or (b) an institution which would satisfy the requirements for authorisation as a credit institution under that directive if it had its registered office (or if it does not have one, its head office) in an EEA State. |
Articles 25 and 26 of the PD Regulation provide for the format of prospectuses and base prospectuses:
Format of the prospectus |
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25.1 |
Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to [PR 2.2.1 R] to draw up a prospectus as a single document, the prospectus shall be composed of the following parts in the following order: |
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(1) |
a clear and detailed table of contents; |
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(2) |
the summary provided for in [section 87A(5) of the Act]; |
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(3) |
the risk factors linked to the issuer and the type of security covered by the issue; |
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(4) |
the other information items included in the schedules and building blocks according to which the prospectus is drawn up. |
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2. |
Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to [LR 3.1.1 R], to draw up a prospectus composed of separate documents, the securities note and the registration document shall be each composed of the following parts in the following order: |
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(1) |
a clear and detailed table of contents; |
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(2) |
as the case may be, the risk factors linked to the issuer and the type of security covered by the issue; |
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(3) |
the other information items included in the schedules and building blocks according to which the prospectus is drawn up. |
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3. |
In the cases mentioned in paragraphs 1 and 2, the issuer, the offeror or the person asking for admission to trading on a regulated market shall be free in defining the order in the presentation of the required information items included in the schedules and building blocks according to which the prospectus is drawn up. |
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4. |
Where the order of the items does not coincide with the order of the information provided for in the schedules and building blocks according to which the prospectus is drawn up, the [FCA] may ask the issuer, the offeror or the person asking for the admission to trading on a regulated market to provide a cross reference list for the purpose of checking the prospectus before its approval. Such list shall identify the pages where each item can be found in the prospectus. [see PR 3.1.1 R (3)2] 2 |
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5. |
Where the summary of a prospectus must be supplemented according to [section 87G of the Act], the issuer, the offeror or the person asking for admission to trading on a regulated market shall decide on a case-by-case basis whether to integrate the new information in the original summary by producing a new summary, or to produce a supplement to the summary. |
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If the new information is integrated in the original summary, the issuer, the offeror or the person asking for admission to trading on a regulated market shall ensure that investors can easily identify the changes, in particular by way of footnotes. |
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2In any case, a new filing of final terms and summary of the individual issue annexed thereto corresponding to offers made prior to the production of a new summary or a supplement to the summary shall not be required. |
Format of the base prospectus and its related final terms |
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26.1 |
Where an issuer, an offeror or a person asking for the admission to trading on a regulated market chooses, according to [PR 2.2.7 R] to draw up a base prospectus, the base prospectus shall be composed of the following parts in the following order: |
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(1) |
a clear and detailed table of contents; |
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(2) |
the summary provided for in [section 87A of the Act]; |
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(3) |
the risk factors linked to the issuer and the type of security or securities covered by the issue(s); |
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(4) |
the other information items included in the schedules and building blocks according to which the prospectus is drawn up. |
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2. |
Notwithstanding paragraph 1, the issuer, the offeror or the person asking for admission to trading on a regulated market shall be free in defining the order in the presentation of the required information items included in the schedules and building blocks according to which the prospectus is drawn up. The information on the different securities contained in the base prospectus shall be clearly segregated. |
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3. |
Where the order of the items does not coincide with the order of the information provided for by the schedules and building blocks according to which the prospectus is drawn up, the [FCA] may ask the issuer, the offeror or the person asking for admission to trading on a regulated market to provide a cross reference list for the purpose of checking the prospectus before its approval. Such list should identify the pages where each item can be found in the prospectus. [see PR 3.1.1 R (3)2] 2 |
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4. |
In case the issuer, the offeror or the person asking for admission to trading on a regulated market has previously filed a registration document for a particular type of security and, at a later stage, chooses to draw up base prospectus in conformity with the conditions provided for in [PR 2.2.7 R], the base prospectus shall contain: |
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(1) |
the information contained in the previously or simultaneously filed and approved registration document which shall be incorporated by reference, following the conditions provided for in Article 28 of this Regulation; |
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(2) |
the information which would otherwise be contained in the relevant securities note less the final terms where the final terms are not included in the base prospectus. |
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5. |
The final terms shall be presented in the form of a separate document or be included in the base prospectus. The final terms shall be prepared in an easily analysable and comprehensible form.2 2 |
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The items of the relevant securities note schedule and its building blocks, which are included in the base prospectus shall not be reproduced in the final terms.2 2 |
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The issuer, the offeror or the person asking for admission to trading on a regulated market may include any of the additional information set out in Annex XXI in the final terms.2 2 |
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2A clear and prominent statement shall be inserted in the final terms indicating: |
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(a) |
that the final terms have been prepared for the purpose of Article 5(4) of Directive 2003/71/EC and must be read in conjunction with the base prospectus and its supplement(s); |
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(b) |
where the base prospectus and its supplement(s) are published in accordance with Article 14 of Directive 2003/71/EC; |
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(c) |
that in order to get the full information both the base prospectus and the final terms must be read in conjunction; |
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(d) |
that a summary of the individual issue is annexed to the final terms. |
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The final terms may include the signature of the legal representative of the issuer or the person responsible for the prospectus according to the relevant national law or the signature of both. |
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5a |
The final terms and the summary of the individual issue shall be drawn up in the same language respectively as the approved version of the form of the final terms of the base prospectus and as the summary of the base prospectus. |
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When the final terms are communicated to the competent authority of the host Member State or, if there is more than one host Member State, to the competent authorities of the host Member States, in accordance with Article 5(4) of Directive 2003/71/EC, the following language rules shall apply to the final terms and the annexed summary: |
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(a) |
where the summary of the base prospectus is to be translated pursuant to Article 19 of Directive 2003/71/EC, the summary of the individual issue annexed to the final terms shall be subject to the same translation requirements as the summary of the base prospectus; |
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(b) |
where the base prospectus is to be translated pursuant to Article 19 of Directive 2003/71/EC, the final terms and the summary of the individual issue annexed thereto, shall be subject to the same translation requirements as the base prospectus. |
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The issuer shall communicate those translations, together with the final terms, to the competent authority of the host Member State or, if there is more than one host Member State, to the competent authorities of the host Member States. |
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6. |
Where a base prospectus relates to different securities, the issuer, the offeror or the person asking for admission to trading on a regulated market shall include a single summary in the base prospectus for all securities. The information on the different securities contained in the summary, however, shall be clearly segregated. |
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7. |
Where the summary of a base prospectus must be supplemented according to [section 87G of the Act], the issuer, the offeror or the person asking for admission to trading on a regulated market shall decide on a case-by-case basis whether to integrate the new information in the original summary by producing a new summary, or by producing a supplement to the summary. |
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If the new information is integrated in the original summary of the base prospectus by producing a new summary, the issuer, the offeror or the person asking for admission to trading on a regulated market shall ensure that investors can easily identify the changes, in particular by way of footnotes. |
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8. |
Issuers, offerors or persons asking for admission to trading on a regulated market may compile in one single document two or more different base prospectuses. |
2[Note: See transitional provisions in Regulation (EU) No 486/2012]
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