On 2 July 2019, the Luxembourg Parliament (Chambre des Députés) adopted the final text of the draft law No.7328 on prospectuses (the “New Prospectus Law”) for the purposes of implementing Regulation (EU) 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”).
In our July 2018 Newsletter, we gave a brief overview of the first draft of the New Prospectus Law issued by the Luxembourg Parliament (Chambre des Députés); specifically we explained that according to first draft, the New Prospectus Law was divided into five parts in a similar way to the law of 10 July 2005 on prospectuses (the “Existing Law”) which it will replace. This remains the case in the final text of the New Prospectus Law.
Exercise of the option regarding the exemption threshold
While the Prospectus Regulation is directly applicable throughout the EU, Member States are given some discretion to set the threshold under which offers of securities to the public shall be exempt from the obligation to publish a prospectus. In this regard, the Luxembourg legislator has opted to fix the threshold at EUR 8,000,000 calculated on a total consideration basis over twelve months, which is the the maximum level permitted under the Prospectus Regulation. In case of an offering of securities to the public with a total consideration of at least EUR 5,000,000 but less than EUR8,000,000, an information note (which does not require any formal approval) is required.
Domestic prospectus regime
The domestic prospectus regime (which applies to those offers of securities made to the public in Luxembourg and admissions to trading of securities on a regulated market, which fall outside the scope of the Prospectus Regulation) has been, for the most part, retained in Part III of the New Prospectus Law, with such offers requiring only an alleviated prospectus similar to the simplified prospectus required under Part III of the Existing Law.
Similar exemption thresholds as those applied by the New Prospectus Law to offers to the public which are within the scope of the Prospectus Regulation, have been applied to offers to the public under the domestic regime in Chapter 1 of Part III of the New Prospectus Law.
What is next?
The Prospectus Regulation will be fully applicable on 21 July 2019 in all Member States. It is anticipated that the New Prospectus Law will be applicable as from the same date, thereby repealing and replacing the Existing Law.