Pursuant to Article 16(4) of the Regulation (EU) No. 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (the “Prospectus Regulation”) ESMA has been mandated to issue guidelines to assist competent authorities in their review of the specificity and materiality of risk factors and of the presentation of risk factors across categories depending on their nature. On March 29th 2019 ESMA published its final report on the guidelines (which are attached as annex II to the report) (the “Guidelines”). Although the Guidelines are addressed to competent authorities in Member States, they should be taken into consideration by any person responsible for drafting a prospectus.
The Guidelines deal with six key topics related to risk actors:
- Corroboration of the materiality and specificity;
- Focused/concise risk factors, and
- Risk factors in the summary.
The Guidelines must now be translated into each of the official languages of the European Union and then published on ESMA’s website, taking effect two months after the publication in all official languages. The Prospectus Regulation itself will be fully applicable as from July 21st 2019.