The proposed EU Recovery Prospectus

Source: BSP
23 octobre 2020 par
vanessa Icardi Serrami

The EU Recovery Prospectus has been proposed by the European Commission in direct response to the Covid-19 pandemic

The goal of the proposed Regulation which would amend Regulation (EU) 2017/1129 (the “Prospectus Regulation”) as regards the EU Recovery prospectus and targeted adjustments for financial intermediaries to help the recovery from the COVID-19 pandemic (the “Proposal”) is to help companies to access new funding in a short time period to facilitate the economic recovery from the COVID-19 pandemic. In particular, it aims to help companies raise equity so that they can restore sustainable debt-to-equity ratios and become more resilient.


The proposal aims at simplifying the procedure for issuers to quickly raise capital by the creation of a new type of short-form prospectus (the “EU Recovery Prospectus”) as well as targeted amendments to release pressure on financial intermediaries (notification of supplements and non-equity issuances by credit institutions).

The EU Recovery Prospectus aims to focus on essential information and would only be available for secondary issuances of shares. Provided that issuers have shares already admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months, the alleviated disclosure is expected to reduce the cost of drawing up a prospectus and to make the document easier to understand.

The EU Recovery Prospectus is expected to be a single document with a maximum of 30 pages, and a short summary of two pages. Additionally, the proposed EU Recovery Prospectus regime intends to shorten prospectus approval to 5 working days.

This new type of prospectus would also benefit from the EU single passport of approved prospectuses for cross-border offers and admissions to trading.

Article 1(1) of the Proposal deals with non-equity securities issued by credit institutions in a continuous or repeated manner (Article 1(4) of the Prospectus Regulation).

An offer of such securities is, under certain conditions, not subject to the obligation of publishing a prospectus if the total consideration is less than EUR 75 million per credit institution calculated over a period of 12 months. A targeted increase of the threshold from EUR 75 million to EUR 150 million is proposed. As this measure is limited to the recovery phase, it would therefore be available for a limited time period of 18 months. Articles 1(2) and 1(3) of the Proposal deal with technical adjustments on the materiality test (Article 6 of the Prospectus Regulation) and summary (Article 7 of the Prospectus Regulation) in relation with the EU Recovery Prospectus regime.

Article 1(4) of the Proposal creates a new regime for the EU Recovery Prospectus (Article 14a of the Prospectus Regulation).

The EU Recovery Prospectus regime should expire after an 18 months period of application (Article 47a of the Prospectus Regulation).

Next steps

The next step is for the European Parliament and the Council to agree to the legislative text of the Proposal. If and when the Proposal is adopted and enters into force, the changes to the Prospectus Regulation will apply directly in the Member States.