The European Securities and Markets Authority (ESMA) has updated its Q&As concerning the Prospectus Regulation and the Transparency Directive in the context of the Brexit transition period. ESMA also updated the Prospectus Q&As as part of an ongoing Q&A revision exercise.
Brexit related Q&As
The Brexit related Q&As concern the choice of home member state under the Prospectus Regulation and the Transparency Directive, as well as the use of prospectuses approved by the competent authority in the UK once the Brexit transition period is concluded.
ESMA also updated its Q&As on the Prospectus Regulation, specifically question 7.3 on the identification of profit forecasts in prospectuses. On this point, ESMA has clarified that in order to determine what can be considered a profit forecast, one must also read Guidelines 10 to 13 of the Guidelines on disclosure requirements under the Prospectus Regulation.
These Guidelines provide that:
(1) The persons responsible for the prospectus should apply due care and diligence when compiling profit forecasts and estimates, and should ensure that profit forecasts and estimates are not misleading to investors (Guideline 10);
(2) The persons responsible for the prospectus should ensure that profit forecasts and estimates are: (i)understandable; (ii)reliable; (iii)comparable; and (iv)relevant (Guideline 11);
(3) The persons responsible for the prospectus should ensure that the statement required is clean (Guideline 12);
(4) Where there is an outstanding profit forecast or estimate related to a material undertaking which the issuer has acquired, the persons responsible for the prospectus should consider whether the profit forecast or estimate made by the material undertaking is still valid and correct, and whether it is necessary to provide disclosure on this matter in the prospectus (Guideline 13).
Originally Published By Ganado, November 2020
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