05-06-2025 Article

Relief from prospectus requirements under the EU Listing Act

Update Capital Market Law No. 56

The EU Listing Act has been in force since December 4, 2024. Among other things, it contains amendments to the EU Prospectus Regulation that are intended to facilitate the access to the capital market for issuers. For example, the requirements for the prospectus that generally has to be published prior to a public offering or the admission of securities to a regulated market are streamlined. In addition, the exceptions from the prospectus requirement are extended, in particular if the issuer is already listed and therefore already known to investors. While the rules on prospectus formats and content will not apply until 2026, most of the changes to the prospectus exemptions have already been in force since the EU Listing Act entered into force.

Extended exemption from the prospectus requirement

Already prior to the EU Listing Act entering into force the EU Prospectus Regulation provided for exceptions from the requirement to publish a prospectus for public offers of securities if they were directed exclusively at qualified investors (equivalent to professional clients under MiFID) or to fewer than 150 non-qualified investors per EU member state. Further exceptions applied to small issues. In addition, issuers can now also make a public offer without a prospectus if the securities offered belong to a class that is already admitted to trading on a regulated market or SME growth market.

[NOTE: A regulated market is defined as any “regulierter Markt” on a German stock exchange. In Germany, the "Scale" market segment, which is part of the open market on the Frankfurt Stock Exchange, is registered as an SME growth market.]

However, before the offer is made, a short document replacing the prospectus, having a maximum length of eleven DIN A4 pages and containing key information for investors, must be published (more on this below). If the relevant class of securities has been listed for less than 18 months, this exemption is limited to 30 % of the number of securities already admitted for a period of twelve months.

The prospectus exceptions for the admission of securities to trading on a regulated market have also been extended. The existing prospectus exception for the admission of securities of a class already admitted to trading on a regulated market has been extended from less than 20 % of the number of securities already admitted to trading on the same market over a period of twelve months to less than 30 %. If the admission has been in place for at least 18 months, further securities of the same class may also be admitted without a prospectus if an 11-page document replacing the prospectus has been published beforehand.

For issuers undergoing restructuring or insolvency proceedings or for exchange offers, mergers, or demergers, the prospectus exceptions using the 11-page document replacing the prospectus are not available.

Document replacing the prospectus

The document replacing the prospectus contains what is known as key information. This is intended to supplement the financial information and ad hoc announcements already published because of the existing stock exchange listing. The document must be filed with the national authority competent for prospectus approvals (in Germany, BaFin), but an approval is not required. Its length must not exceed eleven DIN A4 pages. The information to be included in the document is specified in a new Annex IX to the EU Prospectus Regulation. It essentially consists of key information about the issuer, the securities and the offer, as well as the reasons for the issue and the use of the proceeds as well as specific risk factors relating to the issuer. The person responsible for the document have to confirm that, to the best of their knowledge, the information contained in the document is in accordance with the facts and that the document does not contain any omissions that likely to affect its import (responsibility statement). This statement is usually made by the issuer. In the case of a public offering, it must also be confirmed that the issuer is not exercising its right to delay the publication of an ad hoc announcement (so-called self-exemption). Finally, it must be declared that the issuer has complied with its reporting and disclosure obligations throughout the entire period of admission of its securities to trading on a stock exchange (compliance statement). Conceptually, this appears problematic. This is because the current management board is often unable to gain an overview of this period in full, which may have begun long before it assumed responsibility for the management of the issuer. However, given that the responsibility statement is qualified by the best knowledge of the responsible person, this qualification could – arguably – also be applied to compliance statement. If the issuer has committed a (possibly minor) breach of post-admission obligations in the past, it should be possible to issue a compliance statement qualified by a reference to any historical breaches. This would have to be agreed with BaFin in advance. ESMA has received a number of questions regarding the details of the compliance statement as part of the Q&A process, but no answers have been provided yet.

The liability arising from the document replacing the prospectus is unclear. The German Securities Prospectus Act (Wertpapierprospektgesetz – WpPG) extends the general liability provisions for prospectuses to documents replacing prospectuses, but not (yet) to the new form described herein. A corresponding amendment was provided for in the draft of the Future Financing Act II (ZuFinG II), which has, however not been passed yet. The structure of liability arising from the document replacing the prospectus is therefore unclear until further notice. The courts are expected to apply established liability principles. There are a number of arguments in favour of adjusting the general liability standard to the information items required by law and the limited length of the document to eleven pages. A corresponding intention on the part of the legislator can be inferred from provisions for special forms of prospectuses in the EU Prospectus Regulation.

Further significant simplifications

In the case of an initial public offering, the prospectus now only has to be made available to the public for at least three working days before the end of the offer period (previously six).
Financial intermediaries must inform investors who have acquired securities through them of any supplement to the prospectus by electronic means by the end of the first working day after the supplement is published (previously, this was required at the same time and the possibility of using electronic communication exclusively was not clear).
New financial information provided as part of the issuer's regular financial reporting no longer has to be included into the prospectus by way of a prospectus supplement requiring separate approval; it can be incorporated by reference in the prospectus in advance.

New prospectus formats from 2026 and further simplifications

Further changes to prospectus law will not become applicable before 2026. In summary, these include in particular

From March 5, 2026:

The introduction of new, simplified prospectus formats for issuers already listed on a stock exchange (EU Follow-on prospectus) as well as for small and medium-sized enterprises (SMEs) and issuers listed on an SME growth market (EU Growth issuance prospectus); special page limits apply to both formats.

From June 5, 2026

A mandatory standardized layout and sequence of prospectus information and a maximum number of pages for equity prospectuses — while exemptions apply for a universal registration document and for prospectuses that are also to be used for offers or private placements in a non-EU country (such as the US).
The introduction of additional disclosures on sustainability reporting and compliance with sustainability objectives
The threshold for small offers exempted from the prospectus requirement for 12 months is increased from EUR 8 million to EUR 12 million, whereby the total value of all securities offered under this exemption is decisive; however, in Germany, a securities information document (Wertpapierinformationsblatt) must still be prepared.

Conclusion

The first phase of the amendments to the EU Prospectus Regulation by the Listing Act has significantly facilitated the implementation of smaller offers and admissions to trading on stock exchanges. The extent to which the new document replacing the prospectus will be used is likely to depend on clarification of the liability regime – and on how issuers assess investors' information needs in connection with the actual issuance, especially whether these can be satisfied given the 11-page limit. It also seems questionable to what extent the new form of document replacing the prospectus is suitable for placements with US investors. It would also be desirable for the new federal government to soon initiate the necessary amendments to national law through the ZuFinG II (that could not be adopted under the predecessor government).

The extent to which the new format requirements for prospectuses and the new special formats for prospectuses will bring about actual simplification will depend on the specific details to be laid down in delegated acts to be adopted by the EU Commission on level 2.