The new prospectus regime and its practical implications

Christian Alexander Mecklenburg-Guzmán Mayer Brown LLP, Frankfurt.

Introduction

The EU prospectus regime has the primary objectives of facilitating access to investment on institutional side and ensuring investor protection which together are necessary to improve market resilience. In the context of the post-financial effort to strengthen the financial market, it was suggested that the existing prospectus regime did not sufficiently ensure that investors were capable of identifying opportunities and risks in prospectuses, and therefore, further development was thought to be necessary to improve quality and effectiveness of disclosure.[1] Therefore, the European Commission (EC) mandated the European Securities and Markets Authority (ESMA) to elaborate a new prospectus regime.[2] ESMA engaged in significant discussions with market participants to prepare technical standards that were submitted to the EC to legislate the new legal framework.[3]