MEPs of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) approved, on Thursday 19 November, by 47 votes in favour, 5 against and 7 abstentions, the Draft report prepared by Ondřej Kovařík (Renew Europe, Czech Republic) on the Commission proposal to create a “EU Recovery Prospectus” abstract in order to contributing to economic recovery after the Covid-19 pandemic (see EUROPE 12535/11).
“The Recovery Prospectus is a great tool for those who have previously issued prospectuses to save money while increasing their equity. It will contribute to encouraging SMEs to go to the markets for equity rather than to take out more loans and therefore debt from banks”, said the rapporteur, welcoming the outcome of the vote.
The MEPs wished to expand the use and content of this simplified prospectus and strengthen investor protection.
According to the endorsed text, the EU Recovery Prospectus could thus be used not only by issuers, but also by offerors, who have been listed for at least 18 months, and for the issues of shares already admitted to the market, for which information has already been published by means of an ordinary prospectus.
The text specifies that the information contained in the simplified prospectus must be written and presented in a form that is easily analysable, concise and comprehensible and that enables investors, particularly non-professional investors, to take an informed investment decision.
Among the reduced information it should contain, MEPs also added the issuer’s long-term business strategy and objectives, both financial and non-financial, as well as a specific reference of at least 400 words to the financial and commercial impact of the Covid-19 crisis on the issuer.
The political groups agreed on 31 December 2022 as the date for the expiry of the simplified prospectus, 6 months longer than the 18 months proposed by the Commission.
However, the text includes a safeguard clause so that EU Recovery Prospectuses drawn up before 31 December 2022 can continue to benefit from the simplified regime until the end of their validity or 12 months after the 31 December 2022 deadline.
MEPs also set 31 December 2022 as the end date for raising the threshold for exempting credit institutions from the obligation to publish prospectuses for certain types of offers to 150 million euros (instead of 75 million euros).
The final text also asks the Commission to present to Parliament and the Council of the EU, before 21 July 2022, a report on the application of the Prospectus Regulation, which should also assess if the EU Recovery Prospectus strikes the right balance between reducing the administrative and financial burden and protecting investors
Also on Wednesday, the MEPs supported the mandate to start interinstitutional negotiations with the Council of the EU (by 47 votes to 8, with 4 abstentions). (Original version in French by Marion Fontana)