On 31 December 2012 Royal Decree 1698/2012 of 21 December, amending
the regulations on securities’ prospectuses and transparency
requirements in relation to the issuance of securities ( “RD
1698/2012”), was published in the Spanish Official Gazette (Boletín
Oficial del Estado) and came into force on the date following its
publication.
This regulation completes the transposition into Spanish law of
Directive 2010/73/EU of 24 November 2010, amending Directive 2003/71/EC
(the Prospectus Directive) and Directive 2004/109/EC (the Transparency
Directive), which had already been partially transposed by Royal
Decree-Law 24/2012 of 31 August (subsequently validated by Law 9/2012 of
14 November), amending Law 24/1988 of 28 July on the Securities Market
(the “Securities Market Law”).
The transposition of Directive 2010/73/EU mainly affects Royal Decree
1310/2005 of 4 November (“RD 1310/2005”), although it also
amends, to a lesser extent, Royal Decree 1362/2007 of 19 October (“RD
1362/2007”). Likewise, RD 1698/2012 introduces amendments to RD
1310/2005 which exceed the mere transposition of the abovementioned
Directive (see paragraph 1.4).
1. AMENDMENT OF ROYAL DECREE 1310/2005
1.1. The summary of the prospectus: format,
content and liability regime
With regard to its format and content, the summary of
the prospectus must: (i) be «drawn up in a common format» (in
accordance with the applicable regulations, as provided under Annex XXII
to the Commission Delegated Regulation (EU) No. 486/2012 of 30 March)
and; (ii) its content should convey «the key information, taken
together with the rest of the prospectus, to aid investors when
considering whether to invest in the securities».
The new concept of key information is defined in RD 1310/2005
(Art. 4.l)) as that information which allows investors to «[…]
understand the nature and the risks of the issuer, guarantor and
securities that are being offered or admitted to trading […]».
In connection with the foregoing, the liability regime for the
content of the summary of the prospectus is also modified, providing
that civil liability may arise not only when its content is misleading,
inaccurate or inconsistent, but also when «[…] it does not provide,
when read together with the other parts of the prospectus, key
information in order to aid investors when considering whether to invest
in the securities».
Although RD 1698/2012 transposes the new EU regime in connection with
the summary of the prospectus into Spanish law, these changes concerning
its format, content and liability regime have been applicable in Spain
since 1 July 2012 by virtue of the direct effect of the aforementioned
Commission Delegated Regulation (EU) No. 486/2012.
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1.2. The definition of public offer and the
exemptions from the obligation to publish an offer prospectus
The definition of “public offer”
Pursuant to the latest drafting of Art. 30 bis of the Securities
Market Law, which has been consistent with the EU regulations since 31
August 2012, the following thresholds which determine whether an offer
qualifies as a public offer, and is therefore exempt from the
obligation to publish an offer prospectus, have increased:
(i) the maximum number of investors to which the offer is addressed
(from 100 to 150);
(ii) the minimum amount per investor (from EUR 50,000 to 100,000);
(iii) the minimum denomination of the securities (from EUR 50,000
to 100,000); and
(iv) the total maximum aggregated value of the offer(s) made in the
European Union (EU) within the previous twelve months (from EUR 2.5 to
5 million).
Therefore, the requirements of high nominal value offers
(items (ii) and (iii)) have been tightened up, while offers with a
reduced scope have been granted greater flexibility (items (i) and
(iv)).
Exemption from the obligation to publish a public offer prospectus
Directive 2010/73/EU introduces certain technical improvements that
have been included in RD 1698/2012. Possibly, the most significant of
these consists of the removal of the exemption from the obligation to
publish a prospectus when shares are offered, allotted or are to be
allotted at no cost to the shareholders. Given that such offers are
free and, therefore, below the minimum total value provided under the
definition of a public offer, they cannot be considered as such (and,
therefore, no express exemption is required in this regard).
Likewise, it was considered that the current exemptions for
securities offered, allotted or to be allotted to existing or former
employees or directors of the issuer or of an affiliate thereof were too
restrictive to be useful to a significant number of employers operating
share schemes for employees. Therefore, this exemption has been extended
to: (i) companies having their head office or
registered office in the EU (regardless of whether or not
they are admitted to trading on a secondary market in the EU); and (ii)
companies of third countries admitted to trading, either
on a regulated market in the EU or on a third-country market (provided
that in the latter case the European Commission has adopted an
equivalence decision regarding the regulations and supervision in the
third country concerned).
It must be noted that the amendments described in the two preceding
paragraphs are only applicable with regard to the exemptions from the
obligation to publish a public offer prospectus (Art. 41.1.d) and
e)); the exemptions from the obligation to publish a prospectus
in connection with the admission to trading (Art. 26.1.e) and f)) have
not been adjusted accordingly.
Likewise, the limit provided for “plain vanilla” debt offers
made in the EU within a twelve-month period making it exempt from the
obligation to publish an offer prospectus has increased from EUR 50 to
75 million.
Finally, the resale of securities carried out through
financial intermediaries is also exempt from the obligation to publish a
public offer prospectus, provided that a valid prospectus is already
available to the public and the issuer has consented in writing to its
use.
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1.3. Other modifications
Right of withdrawal upon publication of a supplement to the
prospectus
The acceptors’ right to withdraw their acceptance of an offer will
apply when a new factor, mistake or inaccuracy arises that may affect
the assessment of the securities and require the publication of a
supplement, provided this event arose before the delivery of the
securities.
“Qualified investor” definition and investors registry
The definition of qualified investor has been adjusted in
accordance with arts. 78bis.3 and 78 ter of the Securities Market Law
(which is aligned with the MiFID definition of professional investor).
The legal regime has also been further developed regarding the
potential issuers’ right of access to the qualified investors registries
created by investment firms and credit entities providing for investment
firms detailing the natural persons and SMEs that voluntarily requested
them to be considered as qualified investors.
Final terms to a base prospectus passporting
Issuers willing to launch a tender offer or request for the admission
to trading of debt securities under a base prospectus previously filed
with the competent authorities of other Member States must communicate
the final terms to the competent authority of the relevant host Member
State (this communication was already market practice since European
legislation only required the issuer to file the final terms with the
competent authority of the home Member State).
Exemptions from publishing or translating the summary of the
prospectus
As regards the admission to trading of non-equity securities, the
minimum denomination per unit threshold to apply the exemptions to the
obligations to publish a summary or translate it into Spanish is
increased from EUR 50,000 to 100,000.
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1.4. Amendments introduced outside the
transposition of Directive 2010/73/EU
Admission to trading requirements
In relation to the exemption to deliver the annual accounts for the
last three years where the CNMV so decides, whether in the issuer’s or
the investors’ best interest, it has been clarified that, in the case of
issuers with a complex financial history, investors will be deemed to
have all necessary information as long as the prospectus includes the
information required by Commission Regulation (EC) no. 211/2007 of 27
February regarding financial information in prospectuses where the
issuer has a complex financial history or has made a significant
financial commitment.
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Securities already admitted to trading on an official secondary
market
The admission to trading process of securities already admitted to
trading on a different Spanish official secondary market, where all
requirements will be deemed to be complied with, has been simplified,
except for the obligation to prepare an informative prospectus, without
prejudice to the availability of the exemption established in Art.
26.1.h) of RD 1310/2005 relating to securities previously admitted to
trading on an EU regulated market.
Regime of commercial papers with maximum maturity of 12 months
The issue of commercial papers with a maximum maturity of 12 months
will not require the preparation of the final terms; instead, it will
suffice to supplement the base prospectus with the certificate referred
to in Art. 6.2 of Royal Decree 116/1992.
2. AMENDMENT OF ROYAL DECREE 1362/2007
Certain cases have been clarified where Spain will be considered as
home Member State for issuers of debt securities in a currency other
than the euro with a minimum denomination per unit equivalent to less
than EUR 1,000.
Likewise, following Directive 2010/73/EU, the thresholds related to
the issuers’ right to choose: (i) the language for the disclosure of the
regulated information; and (ii) the location to hold a meeting of
bondholders in another Member State, have increased from EUR 50,000 to
EUR 100,000.
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