Prospectus Regulation And Prospectus Liability

This new work provides integrated analysis of and guidance on the Prospectus Regulation 2017, civil liability for a misleading prospectus, and securities litigation in a European context. The prospectus rules are one of the cornerstones of the EU Capital Markets Union and analysis of this aspect of harmonisation, the areas not covered by the rules, and the impact of Brexit, provides valuable reference for all advising and researching this field. The first section serves as an introduction to the volume with relevant context. Part two discusses the subjects of Prospectus Regulation from both a legal and economic perspective. Each chapter within part two focuses on a key subject of the new Prospectus Regulation, providing an in-depth analysis of each issue. Part III of the work explains the domestic law on liability for a misleading prospectus, this issue being omitted from the Regulation. The law and practice in each of the key capital markets centres in Europe is analysed and compared, with the UK chapter covering the issues and possible solutions under Brexit. In the chapter on securities litigation there is full consideration of conflicts of laws issues with reference to the Brussels I regulation, and the Rome I and II Regulations. The fifth and final section looks to the future of disclosure practices in connection with securities offerings in the EU. The editors evaluate their key findings in a succinct summary to inform and enlighten the reader.

The need for maximization of liquidity for companies acting in the EU markets through the establishment of an internal market for financial services, has since 1998 led to the harmonization of the European disclosure rules to a large extent. However, this does not apply to the corresponding civil liability standards.The Framework Acts, with few exceptions, do not make any provision on the civil law instruments of standard enforcement. The regulation of civil liability for misinformation in the IPO-prospectus is, therefore, still left to the Member States. For this reason, PIL is invoked to determine, which prospectus liability law applies to intra-European cases, when investors or issuers leave national borders to benefit from other European capital markets.

Pierre Schammo provides a detailed analysis of EU prospectus law (and the 2010 amendments to the Prospectus Directive) and assesses the new rules governing the European Securities and Markets Authority, including the case law on the delegation of powers to regulatory agencies. In a departure from previous work on securities regulation, the focus is on EU decision-making in the securities field. He examines the EU's approach to prospectus disclosure enforcement and its implementation at Member State level and breaks new ground on regulatory competition in the securities field by providing a 'law-in-context' analysis of the negotiations of the Prospectus Directive.

The book provides a practical survey of Dutch financial law, and explains the following topics: specific rules applicable to investment institutions; specific rules applicable to debt instruments; offering securities in both primary and secondary markets; set-off and calculation of obligations of market participants (netting); structures for custody and book-entry transfer of securities; obtaining and terminating listings; mandatory bids, competing bids, friendly and unfriendly bids under public offering regulations; alternative investment funds and fund governance; meaning, jargon and function of derivatives, forwards, futures, options, swaps, etc.; securities repurchase and lending transactions; bond regulations; caretaking duties in private and public law; structure of legal proceedings of a prospectus liability claim; unfair commercial practices rules; case law in insider trading and market manipulation; securities litigation in Dutch private, criminal, and administrative law.

There is a growing consensus among regulators and commentators that some cryptocurrencies (so-called 'investment tokens' or 'security tokens') are securities, provided that they grant their owner rights that are comparable to those of an investor. As a consequence, EU initial disclosure regulation applies, requiring the issuer to draw up a prospectus that contains all the information relevant for an investor to make an informed decision. Issuers of investment tokens are also subject to prospectus liability if the prospectus is flawed or no prospectus was made available at all.However, this conclusion is only the first step of the wider debate of the best regulation of investment tokens, and many questions remain. The element in the room is whether the current regulation can be sensibly applied to public offers of investment tokens. This article discusses open questions in this regard, such as which national regulator is responsible for prospectus review and administrative measures? How can issuers from outside the EU ensure they do not become subject to the EU initial disclosure obligations? Who would the 'issuer' be the tokens were offered by a decentralised network? The article concludes that EU initial disclosure regulation can be sensibly applied to initial coin offerings. However, the fact that supervision and enforcement are currently carried out on the national level poses serious problems that should be addressed in the future.

'European Securities Law' is a guide to the law and regulations which govern the European securities market. It discusses practical application of the key EU directives within the context of corporate transactions, as well as the legal issues which arise as a result of the differences in implementation between member states.

Risk management provisions can be divided into provisions that require companies to have risk management systems in place, provisions that require the disclosure of information on such systems, and provisions that require the disclosure of information on actual risks. Disclosure requirements have necessitated including information on corporate risks in such documents as the annual report, quarterly reports, and the prospectus. The prospectus plays a pivotal role in attracting capital from public investors. This paper focuses on information disclosure requirements on risk management in the prospectus. In more detail, this paper discusses which information companies should disclose to comply with these requirements. A generally neglected issue is that prospectus liability could be triggered by giving either too little information or too much information. Information overload and boilerplate text can obscure the main risks. Both might be qualified as misleading information. Analysing prospectuses, this paper shows that it could be debated whether the actual reporting complies with Directive 2003/71/EC and Commission Regulation 809/2004 regarding information on risks disclosed in prospectuses. A safe harbour could, however, be reached by adequately balancing the information disclosure on risks. To determine the minimum information on risks that should be disclosed in prospectuses, the four-step method presented in this paper could be used. These steps are: (1) identifying risks with a material adverse effect on a company and its securities; (2) classifying risks based on their probability and impact; (3) allocating risk responses; (4) and selecting the minimum information that should be disclosed. By using this method, companies can provide sufficient and objective investor information. Finally, this paper concludes with the improvements to be gained applying the four-step method instead of the actual ad hoc method.

In its Kolassa judgment, the CJEU has for the first time decided which national court in the EU has jurisdiction for claims against an issuer of securities based on an allegedly false prospectus. This contribution analyses this fundamental and at the same time ambiguous ruling. The ruling's most important part concerns tort jurisdiction, in particular the identification of the place where loss is suffered by the investor. The court's mixture between the domicile of the investor and the location of the bank that manages his account is unsatisfying and leads to problems, which will be analysed. With regard to the place of conduct, the decision will be criticized for hesitating between four different connecting factors, the relation of which among each other remains unclear. Moreover, this contribution argues that prospectus liability never falls under the consumer provisions or the contractual head of jurisdiction in the Brussels I(a) Regulation because such liability is delictual in nature. Contrary to the CJEU's assumption, the particularities of the securities holding system do not play any role in the determination of the competent court.Finally, it will be shown that the judgment is not limited to the determination of the competent court, but also affects the governing law for prospectus cases. It will be argued that the consequences of the Kolassa judgment under the Rome II Regulation are so drastic that a legislative reform of this Regulation has become necessary.