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Exemption from the requirement to publish a prospectus for the public offer of securities

The Cyprus Securities and Exchange Commission is undertaking a consultation process on the appropriate threshold for exemption from the requirement to publish a prospectus for the public offer of securities.

Currently, following the repeal of articles 1 (2) (h) and 3 (2) (e) of the EU Prospectus  Directive (Directive 2003/71 / EC) and implementation of article 1(3) of the EU Prospectus Regulation (Regulation (EU) 2017/1129), a prospectus must be published for any public offer of securities where the total consideration of the offer in the EU over a period of 12 months is EUR 1 million or more.

In order to make allowance for the varying sizes of national financial markets across the EU, the Prospectus Regulation gives member states discretion to set a different threshold, of up to EUR 8  million, provided the securities are not offered on a cross-border basis.

The Cyprus government is proposing to exercise this discretion and to exempt issues of securities from the requirement to issue a prospectus as long as the total consideration of the offer in the EU over a period of 12 months is less than EUR 5 million. This is the same limit as applied prior to 21 July 2018 under the Public Offer and Prospectus Laws of 2005, and was found to provide an appropriate level of investor protection. Other member states of a similar size to Cyprus are expected to adopt the same limit.

Interested parties are invited to submit comments to CySEC on the proposed limit by 26 October.

For further information on this matter please contact Dimitris Papoutsis or your usual contact at Elias Neocleous & Co LLC.

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