The Prospectus Regulation is coming: getting your debt prospectuses ready

The latest piece of the Prospectus Regulation puzzle has arrived. On 28 November 2018 the European Commission published the Commission delegated regulation and annexes on the format, content, scrutiny and approval of the prospectus. The delegated regulation largely follows ESMA's final report (published in March 2018), although there has been some reformatting of the annexes.

The European Commission has until 21 January 2019 to adopt this delegated regulation which will apply, along with the Prospectus Regulation, from 21 July 2019.

Market participants need to start thinking now about how they are going to address these new requirements in their debt prospectuses, in particular the:

  • new approach to risk factors, which cannot be generic and must be categorised and restricted;
  • new requirements for the summary and interaction with the PRIIPs KID; and
  • additional disclosure requirements for credit linked notes and securitisations

Some of these changes, such as the categorisation of risk factors could lead to increased costs and liability for issuers.

For more information on the main changes and the impact on structured products and securitisations and impact of Brexit please see our note here.

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