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Capital Markets Headline - August 2018 : The New Belgian Prospectus Law

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16/08/2018

1. Introduction
On 20 July 2018, the new Belgian prospectus law (the New Prospectus Law) was published in the Belgian Official Journal. The New Prospectus Law exercises a few options the EU Prospectus Regulation (the Prospectus Regulation) offers, and will repeal the Belgian Prospectus Law of 16 June 2006 (the Existing Prospectus Law) as from the date it will fully apply, i.e. 21 July 2019.

In this Capital Markets Headline, we give a brief overview of the main changes introduced by the New Prospectus Law.


2. Scope of the New Prospectus Law
The scope of the New Prospectus Law remains unchanged compared to the Existing Prospectus Law. Whereas the Prospectus Regulation (as the Prospectus Directive) establishes a prospectus regime for the public offering and admission to trading on a regulated market of “securities”, the New Prospectus Law continues to apply to the extended concept “investment instruments” (“beleggingsinstrumenten”/“instrument de placement”).


3. Threshold for the application of the disclosure requirements
As from its entry into force, the Prospectus Regulation will not only replace the Prospectus Directive, it will as well replace – given the fact that it is directly applicable in the Member States – certain relevant sections of the Existing Prospectus Law. Public offerings or admissions to trading of investment instruments will therefore, in principle, be directly subject to the prospectus regime under the Prospectus Regulation.

The Prospectus Regulation does, however, include a number of legislative options for Member States, in particular the option to include a de minimis exception or specific disclosure regime for offers not exceeding EUR 8,000,000. The Belgian legislator has now exercised a number of these options.


3.1. Exemption regime under the Prospectus Regulation – Need to publish a prospectus
Under the Prospectus Regulation:

- offers of securities with a total consideration in the EU not exceeding EUR 1,000,000 are exempt from the requirement to publish a prospectus, but Member States are entitled to require for such offerings other disclosure requirements at national level to the extent that such requirements do not constitute a disproportionate or unnecessary burden; and
- Members States may also opt to exempt public offers with a total consideration in the EU below EUR 8,000,000 calculated over a period of 12 months period from the obligation to publish a prospectus.

3.2. Exemption and proportionate disclosure regime under the New Prospectus Law
The Belgian legislator has now exercised the above options and introduced a proportionate disclosure regime that includes different disclosure requirements depending on whether an offer is made to the public or not and whether the investment instruments are offered to trading on a regulated market or on a multilateral trading facility (“MTF”).

The regime can be summarized as follows:

- An Information note (and no prospectus) will be required for:

o offers of investment instruments to the public for a total consideration equal or below EUR 5,000,000, calculated on a 12 months period;
o offers of investment instruments to the public for a total consideration equal or below EUR 8,000,000,calculated on a 12 months period provided that these will be admitted to trading on an MTF (if not, a prospectus might be required); and
o direct admissions to trading (without offer to the public) of investment instruments on an MTF (it being understood that exemptions may be foreseen by Royal Decree).

- A Prospectus will be required for:

o offers of investment instruments to the public for a total consideration exceeding EUR 8,000,000, calculated on a 12 months period;
o offers of investment instruments to the public for a total consideration exceeding EUR 5,000,000, calculated on a 12 months period provided that these will not be admitted to trading on an MTF;
o admissions to trading of investment instruments on a regulated market (irrespective of the amount of the offering).

- No prospectus or information note will be required for:

o offers to the public of investment instruments for a total consideration below EUR 500,000 if these instruments are not admitted to trading on an MTF or regulated market and if the contribution of each investor does not exceed EUR 5,000.


4. Information note
The information note (referred to in section 3 above) is a shorter and less detailed document than a prospectus and its main characteristics are as follows :

- Format. It cannot be longer than 15 (A4) pages (in a readable format).
- Content. It must include information on the issuer, the amount and the nature of the investments instruments offered, the reasons and the modalities of the offering and/or the admission to trading and the risks related to the issuer and the investment instruments concerned. In addition, the annual accounts for the last 2 financial years should be included.
- Language. The information note can be drawn-up in Dutch, French or English but in any case in the language(s) used for the marketing materials.
- FSMA. It is not subject to prior approval of the FSMA. However, the FSMA has the power to do an a posteriori review and impose certain administrative measures and sanctions.
- Publication. The information note must be published on the website of the issuer, the offeror or the financial intermediaries, at the latest on the day of the opening of the public offering.

The information note remains valid for a 12 months period following the filing with the FSMA.


5. Takeover Law
Unlike in many other EU countries, the scope of the Belgian Takeover Law (and the requirements imposed therein) is extended to tender offers on debt instruments.

The New Prospectus Law now introduces a simplified regime for tender offers made by the issuer on its own financial instruments. Under this regime, the issuer making a such tender offer must publish a communication containing information on its identity and the conditions of the offer and only a limited number of the provisions of the Belgian Takeover Law will apply.


6. Entry into force
The New Prospectus Law will, in principle, enter into force on 21 July 2019. However, provisions concerning the prospectus requirements, prospectus exemptions, and the information note entered into force on 21 July 2018. The amendments to the Takeover Law entered into force on 30 July 2018.

The New Prospectus Law provides for a transitory regime for offers ongoing on 21 July 2018 that will remain subject to the Existing Prospectus Law (subject to certain exceptions).

 


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This Capital Markets Headline is not a legal advice and cannot be relied upon.

 

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