In December 2025, ESMA issued two Q&As (Q&A 2741 and Q&A 2742) offering welcome clarity to issuers grappling with the intricacies of the EU Prospectus Regulation (2017/1129). These clarifications address critical questions about supplement obligations and prospectus exemptions, offering meaningful relief for issuers executing rights offerings and fungible securities admissions.
ESMA Q&A 2741: no supplement required for Annex IX documents
ESMA addressed whether issuers must update documents drawn up in accordance with Annex IX of the Prospectus Regulation when significant new factors, material mistakes, or material inaccuracies arise. The answer is clear: No. Documents drawn up in accordance with Annex IX PR are not prospectuses. Therefore, Article 23 of the Prospectus Regulation on supplements does not apply.
Annex IX documents are required when securities fungible with those already admitted to trading on a regulated market for at least 18 months are themselves admitted to trading or offered to the public, provided certain conditions are met. These simplified documents are limited to a maximum of 11 sides of A4-sized paper when printed, making them significantly less burdensome than full prospectuses.
Article 23 of the Prospectus Regulation requires issuers to publish a supplement when significant new factors, material mistakes, or material inaccuracies arise between prospectus approval and the closing of the offer period or commencement of trading. This supplement must grant investors a right of withdrawal exercisable within three working days, creating administrative complexity and potential deal disruption
In confirming that Annex IX documents lie beyond Article 23's reach, ESMA has delivered a pragmatic clarification that will prove particularly valuable for repeat issuers leveraging the fungible securities exemption in connection with follow-on offerings.
ESMA Q&A 2742: subscription rights inherit prospectus exemptions from underlying shares
ESMA clarified whether subscription rights fall under the exemptions in Article 1(5)(a) and (ba) of the Prospectus Regulation. The answer is affirmative - yes, subscription rights fall under these exemptions provided they relate to shares which themselves qualify under these exemptions.
Article 1(5)(a) exempts securities fungible with securities already admitted to trading on the same regulated market, provided they represent less than 30% over 12 months, whilst Article 1(5)(ba) exempts securities fungible with those admitted to trading continuously for at least 18 months, subject to specific conditions including that the issuer is not subject to restructuring or insolvency proceedings and that an Annex IX document is filed.
Subscription rights (also known as pre-emption rights) are instruments that give existing shareholders the right to subscribe for new shares, typically in proportion to their existing holdings. ESMA's guidance establishes that where the underlying shares qualify for exemption, the subscription rights inherit that exemption status, thereby enabling issuers to admit subscription rights to trading without the burden of publishing a discrete prospectus for the rights instrument itself.
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