Adoption of the new Prospectus Law in Luxembourg

News

Adoption of the new Prospectus Law in Luxembourg

12 July 2019

Regulatory News Alert

Context and objectives

On 2 July 2019, the Luxembourg Parliament adopted the final text of the bill of Law n°7328 (the “New Prospectus Law”), implementing Regulation 2017/1129/EU of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. As of 21 July 2019, the New Prospectus Law will repeal and replace the Luxembourg law of 10 June 2005 on prospectuses for securities (the “2005 Law”).

It should be noted however that prospectuses approved by the CSSF in accordance with the 2005 Law before 21 July 2019 will continue to be governed by such law until the end of their validity, or until 12 months have elapsed after 21 July 2019, whichever occurs first.

Although the Prospectus Regulation is directly applicable in the Member States, it provides for certain provisions, which require transposition into national law, and in this regard, New Prospectus Law has introduced the following changes to the existing prospectus regime in Luxembourg:

  • The Luxembourg legislator has opted to exempt offers of securities to the public with a total consideration of less than €8,000,000 in the EU over a period of 12 months from the obligation to publish a prospectus in accordance with the Prospectus Regulation. The amount of such total consideration corresponds to the maximum amount that was allowed to be exempted pursuant to the option provided for by the Prospectus Regulation;
  • However, in case of an offering of securities to the public with a total consideration of at least €5,000,000, an information note is required. Such an information note will contain brief information about the issuer, the securities, the conditions, and reasons for the offering of the securities. An issuer wishing to make use of this exemption will notify the CSSF prior to making such an offer. No formal approval of the offering and the information note is required;
  • Offers of securities to the public falling outside of the scope of the Prospectus Regulation will be made pursuant to the domestic prospectus regime as mentioned in the New Prospectus Law. This domestic prospectus regime is mostly comparable to the simplified prospectus regime currently existing under the 2005 Law;
  • The Luxembourg national prospectus law regime is aligned with the exemption mentioned above, which means that a simplified prospectus will have to be drawn up and approved by the CSSF according to the New Prospectus Law in case of an offering of securities to the public with a total consideration of at least €8,000,000. However, in case of an offering of securities to the public with a total consideration of at least €5,000,000 an information note and a notification to the CSSF prior to making an offer to the public is required;
  • Following the notion of the voluntary prospectus regime introduced by the Prospectus Regulation, the New Prospectus Law will allow issuers otherwise exempted from the obligation to publish a simplified prospectus to draw up and publish such prospectus on a voluntary basis in accordance with the provisions of the New Prospectus Law. 


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