The European Commission has adopted a Delegated Regulation setting out standards for the publication of supplements to a prospectus. The Regulation supplements the Prospectus Directive (2003/71/EC) which sets out the requirements for prospectuses relating to securities offered to the public or admitted to trading on a regulated market within the EU.

The Prospectus Directive requires publication of a supplement to reflect any significant new factor, mistake or inaccuracy relating to the information contained in the prospectus. The Regulation specifies situations where publication of a supplement to the prospectus is mandatory.

The introduction of minimum standards seeks to ensure provision of full information concerning the securities and issuers with the aim of the protection of investors.  It is, however, acknowledged in the preamble to the Regulation that it is not possible to identify every situation requiring the publication of a supplement. The Regulation prescribes publication of a supplement to the prospectus to reflect new information in the following situations:

• Publication of new annual audited financial statements of the issuer of equity securities or the issuer of underlying shares (where the prospectus relates to depository receipts)
• Publication of an amendment to a profit forecast or a profit estimate by the issuer of equity securities or the issuer of underlying shares
• Change in control of the issuer of equity securities or the issuer of underlying shares
• Public takeover bid by third parties and the outcome of any public takeover bid
• Change in the working capital statement included in the prospectus, for example where new information on the issuer’s ability to access cash / other liquid resources to meet its liabilities becomes available
• Issuer seeking admission to trading on a regulated market / intending to make an offer to the public in an additional EU member state
• The undertaking by the issuer of a new significant financial commitment likely to affect the financial position or the business of the issuer
• Increase in the aggregate nominal amount of the issuer’s offering programme which could indicate the issuer’s necessity for financing or an increase in the demand for the issuer’s securities

The Regulation became effective on 5 May 2014.

Contributed by Sergey Dolomanov