Last Updated June 10, 2019

Law and Practice

Contributed By Walkers

Authors



Walkers is a global firm with ten substantive offices around the world. Its transactions often involve Cayman Islands, British Virgin Islands, Bermuda, Jersey and/or Guernsey legal matters, and it provides an integrated service to clients across its offices, legal systems and time zones. The finance and capital markets group in Ireland comprises a team of 23, including two listing agents. The group also includes four tax-advisers (including two tax partners) who support a number of practice areas and 16 dedicated capital markets fee-earners who spend the vast majority of their time advising on debt capital markets activity. In addition, the team works with asset finance, corporate, real estate and investment funds teams on multi-disciplinary, cross-border mandates. It is one of the largest dedicated debt capital markets teams in Ireland. The firm was a founding member of the Irish Debt Securities Association (IDSA) and sits on the Executive Council and Legal, Tax, CSP and Listing Sub-committees.

Generally speaking, in the context of debt securities, a prospectus will be required where an issuer wishes to:

  • make an offer of securities to the public (the "Public Offer Rule"); and/or
  • have its securities listed on a regulated market.

A prospectus must contain all information which, according to the particular nature of the issuer and of the securities offered and/or admitted to trading, is necessary to enable investors to make an informed assessment of:

  • the assets and liabilities, financial position, profit and losses and prospects of the issuer and/or any guarantor; and
  • the rights attaching to such securities.

A prospectus, drawn up as a single document, must contain the following parts:

  • a clear and detailed table of contents;
  • if applicable, a summary;
  • appropriate risk factors linked to the issuer and the type of securities covered by the issue; and
  • the other information items included in the relevant annexes to the Prospectus Regulation according to which the Prospectus is drawn up.

In accordance with the Irish Prospectus Regulations, more than one person may be required to take responsibility for the whole of a prospectus. At a minimum the issuer, offeror and the person seeking admission to trading will be responsible for the whole of the prospectus.

The persons responsible for the information contained in a prospectus must be clearly identified within the prospectus by their names and functions or, in the case of legal persons, by their names and registered offices. The persons responsible must also include declarations in the prospectus that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import.

A guarantor is required to take responsibility for information contained in the prospectus that relates to itself and the guarantee.

A prospectus prepared in connection with the listing of debt securities must meet the requirements of Irish and EU prospectus law and the Euronext Rules. The GEM Rules set out the content requirements for listing particulars in respect of debt securities to be listed on GEM.

Where the minimum denomination of the debt securities being offered is less than EUR100,000 (ie, a retail offering) it will be necessary for the prospectus to include a summary. 

Under the existing prospectus regime in Ireland, the summary is required, in concise and plain terms, to provide key information in the language in which the prospectus was originally drawn up. Summaries are required to be prepared in a common format that facilitates comparison with other similar securities. The summary should include key information on the underlying debt securities to assist investors in determining whether or not to invest in the debt securities. Summaries are required to take into account the complexity of the issuer and the underlying debt securities, but should not exceed 7% of the length of a prospectus or 15 pages, whichever is the longer. Summaries must not contain cross-references to other parts of the prospectus.

Summaries must also contain a warning that:

  • it should be read as an introduction to the prospectus;
  • any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor;
  • where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member State, have to bear the costs of translating the prospectus before the legal proceedings are initiated; and
  • no civil liability shall attach to those legally responsible for the contents of the prospectus solely on the basis of the summary unless the summary, including any translation thereof is, when read together with the other parts of the prospectus, misleading, inaccurate or inconsistent, or does not provide, when so read, key information in order to aid investors when considering whether to invest in such securities.

Regulation (EU) 2017/1129 (the “New Prospectus Regulation”) entered into force in Ireland on 20 July 2017. The New Prospectus Regulation will take effect from 21 July 2019 (noting that certain provision of the New Prospectus Regulation are already in force in Ireland). The New Prospectus Regulation forms part of the EU’s Capital Markets Union initiative which aims to ensure investor protection and market efficiency, while enhancing the internal market for capital.

The New Prospectus Regulation has retained the requirement to include a summary. While the New Prospectus Regulation prescribes a uniform structure, issuers have discretion to include information in the summary that they deem to be material and meaningful provided that such information is presented in a fair and balanced way. The summary should not be a mere compilation of excerpts from the prospectus.

Under the New Prospectus Regulation and, subject to certain exceptions, the summary shall be drawn up as a short document written in a concise manner and of a maximum length of seven sides of A4-sized paper when printed. The summary shall comprise four sections:

  • an introduction,  containing warnings;
  • key information on the issuer;
  • key information on the securities; and
  • key information on the offer of securities to the public and/or the admission to trading on a regulated market.

A brief description of the risk factors that the issuer considers most material must be included in the summary but cannot exceed 15 risk factors in total.

Once a prospectus has been approved and filed in accordance with the prospectus regime, the issuer, offeror or person seeking admission to trading of the securities, as the case may be, must make the prospectus available to the public as soon as practicable, and in any case at a reasonable time in advance of, and at the latest at the beginning of, the offer or the admission to trading of the securities involved.  A prospectus can be published in one or more of the following ways:

(i)       by insertion in a widely circulated newspaper;

(ii)       in printed form (to be made available free of charge) at the offices of Euronext Dublin, or at the registered office of the issuer and at the offices of the financial intermediaries placing or selling the securities, including paying agents;

(iii)       in electronic form on the issuer's website or, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents;

(iv)       in electronic form on Euronext Dublin's website; or

(v)       in electronic form on the CBI's website.

Where the issuer, offeror or person seeking admission to trading of the securities, as the case may be, publishes a prospectus in accordance with (i) or (ii) above, publication in accordance with (iii) above is also required.

Unless a non-publication request is submitted to the CBI, the CBI will publish all prospectuses which have been approved by the CBI  during the preceding 12 months on its website. Once published on the CBI website, a prospectus cannot be removed and will remain on the CBI's website for at least one year from the date of approval of the prospectus. Where the CBI receives a non-publication request, it will publish a notification on its website specifying the method of publication to be adopted by the issuer, offeror or person seeking admission to trading of the securities in respect of the prospectus. A non-publication request received by the CBI after a prospectus has been approved and published on the CBI's website will not be accepted.

Where a prospectus is produced by an Irish company and approved by the CBI, a Form B18 together with the prospectus must be filed with the Registrar of Companies in Ireland within 14 days of the publication of the prospectus.

Where an issuer of debt securities is able to avail of an exemption from the Public Offer Rule and chooses to list debt securities on the GEM, then, in order to be listed on the GEM, a listing particulars must have been approved by and filed with Euronext Dublin and made available to the public as soon as practicable and in any case at a reasonable time in advance of, and at the latest at the beginning of, the admission to trading of the securities involved. The listing particulars must remain available to the public for as long as the securities are admitted to trading on the GEM. A listing particulars will be deemed "available to the public" when published in one or more of the following ways:

  • in printed form to be made available, free of charge, to the public at the offices of Euronext Dublin;
  • at the registered office of the issuer and at the offices of the financial intermediaries placing or selling the securities, including paying agents;
  • in electronic form on the issuer's website and, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents; or
  • in electronic form on the website of Euronext Dublin.

There are a number of exemptions to the Public Offer Rule under the Irish prospectus regime, including where the offer of securities:

  • is addressed solely to qualified investors;
  • is addressed to fewer than 150 natural or legal persons, other than qualified investors;
  • is addressed to investors who acquire securities for a total consideration of at least EUR100,000 per investor, for each separate offer;
  • where the denomination per unit amounts to at least EUR100,000; and
  • has a total consideration in the European Union of less than EUR5,000,000, (which shall be calculated over a period of 12 months).

Where an issuer of debt securities is able to avail of one of the exemptions from the Public Offer Rule outlined above, a prospectus will still be required if the issuer intends to have the securities admitted to trading on a regulated market (including Euronext).

Where an issuer of debt securities can avail of an exemption from the Public Offer Rule and is happy to list the securities on the GEM, no prospectus will be required. 

Walkers Global

The Exchange,
George's Dock, IFSC,
Dublin 1,
Ireland

+353 1 470 6600

+353 1 470 6601

info@walkersglobal.com www.walkersglobal.com
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Authors



Walkers is a global firm with ten substantive offices around the world. Its transactions often involve Cayman Islands, British Virgin Islands, Bermuda, Jersey and/or Guernsey legal matters, and it provides an integrated service to clients across its offices, legal systems and time zones. The finance and capital markets group in Ireland comprises a team of 23, including two listing agents. The group also includes four tax-advisers (including two tax partners) who support a number of practice areas and 16 dedicated capital markets fee-earners who spend the vast majority of their time advising on debt capital markets activity. In addition, the team works with asset finance, corporate, real estate and investment funds teams on multi-disciplinary, cross-border mandates. It is one of the largest dedicated debt capital markets teams in Ireland. The firm was a founding member of the Irish Debt Securities Association (IDSA) and sits on the Executive Council and Legal, Tax, CSP and Listing Sub-committees.

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