Term · Regulation & Capital-Market Communication
Prospectus Requirement
In briefThe prospectus requirement calls for an approved prospectus in the case of public securities offerings or market admissions. The legal basis in the EU is the Prospectus Regulation. Exemptions, for example by offer size or investor group, shape the choice of financing route for small issuers.
Definition
The prospectus requirement mandates that an approved securities prospectus be published in the case of a public offering of securities or their admission to a regulated market. The basis in the EU is the Prospectus Regulation. There are exemptions, for example for certain offer sizes or investor groups.
Why it matters for small caps
For small and micro caps, the prospectus requirement and its exemptions determine how expensive and burdensome raising capital is. Exemption thresholds often decide the choice of issuance route.
Common misreadings
- The prospectus requirement is seen as a mere formality, even though the prospectus carries liability and exemptions limit investor protection.
Frequently asked
When does the prospectus requirement apply?
In principle, on a public offering of securities or their admission to trading on a regulated market, unless an exemption applies.
What exemptions are there?
The Prospectus Regulation provides for exemptions, for example for smaller offer volumes or offers to qualified investors. The details are governed by the regulation together with national implementation.
Who approves the prospectus in Germany?
The competent national supervisory authority, in Germany BaFin, reviews and approves the securities prospectus before its publication.
Related terms
Sources
Primary
EUR-Lex, Verordnung (EU) 2017/1129 (Prospektverordnung)
https://eur-lex.europa.eu/legal-content/DE/TXT/?uri=CELEX:32017R1129
https://eur-lex.europa.eu/legal-content/DE/TXT/?uri=CELEX:32017R1129
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.