RE: Consultation paper on draft RTS on prospectus related issues

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Katherine Webster
5 years ago
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To whom it may concern RE: Consultation paper on draft RTS on prospectus related issues The IMA represents the UK-based investment management industry.

1 To whom it may concern RE: Consultation paper on draft RTS on prospectus related issues The IMA represents the UK-based investment management industry. Our members include independent asset managers, the investment management arms of retail banks, life insurers and investment banks, and the managers of occupational pension schemes. Our members manage investments worth more than 5 trillion for their clients, who are UCITS and other authorised funds, pension funds, insurers, sovereign wealth funds and individuals. We welcome the opportunity to provide input to ESMA s consultation paper on draft regulatory technical standards on prospectus related issues. In particular, the IMA welcomes any provisions which help investors to gain easy access to relevant information and build an accurate understanding of prospectus and prospectus-related issues, allowing them to make informed investment decisions. We note that, in point 72 of the consultation paper, ESMA state that they have considered that the draft RTS should be limited to the specification of information which can be incorporated by reference, meaning that topics such as comprehensibility and accessibility of documents containing information which may be incorporated by reference are considered outside the scope of this mandate. These topics are crucial to overall investor understanding, and should be considered as part of the Prospectus Directive review due to be conducted in IMA RESPONSE TO THE ESMA CONSULTATION PAPER ON DRAFT REGULATORY TECHNICAL STANDARDS ON PROSPECTUS RELATED ISSUES UNDER THE OMNIBUS II DIRECTIVE Q1: Is there any information that should be added or removed from the list in the proposed Article 2(2)? Q2: Do you believe that the requirement to submit all versions of the prospectus at a minimum in searchable electronic format will impose costs on issuers, offerors or persons asking for admission to trading? If yes, please specify the Q3: Do you consider that there are any other aspects of the approval process that should be dealt with by the RTS? Q4: Do you agree that the three abovementioned documents constitute the documents which comply with the requirement of being approved or filed in 65 Kings wa y Lo nd on W C2B 6TD Tel:+44(0) w w w. i n v e s t m e n t u k. o r g Investment Management Association is a company limited by guarantee registered in England and Wales. Registered number Registered office as above.

2 accordance with the Prospectus Directive and from which information can be incorporated by reference? If not, please provide your reasoning. Q5: Do you believe that specifying the documents which are considered approved or filed in accordance with the Prospectus Directive as proposed in paragraph 87 will impose costs on issuers, offerors or persons asking for admission to trading? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify There may be on-going costs for issuers, offerors and persons asking for admission to trading, where previously wider incorporation by reference has been permitted. However, the IMA does not consider that these costs will be significant, given that such information should already be available elsewhere, and particularly given increased usage of electronic publication of prospectuses. Q6: Do you agree that the abovementioned information constitutes the information which complies with the requirement of being filed in accordance with the TD? If not, please provide your reasoning. Yes, we would agree that this constitutes the full list of information complying with the requirement of being filed in accordance with the TD. Q7: Do you believe that specifying the information which is considered filed in accordance with the TD as proposed in paragraph 92 will impose costs on issuers, offerors, or persons asking for admission to trading? If yes, please specify the There should be no significant increases in costs, as the specified information is all regulatory information which relevant organisations will already be required to disclose. Q8: Do you consider that there are any other documents that could meet the criteria of being simultaneously published from which information can be incorporated by reference? Q9: Do you agree that it is sufficiently clear from PD Article 14 that the issuer, offeror or person asking for admission to trading can delegate the task of publication but not the responsibility? If not, please state your reasoning. Article 14(1) clearly states that a prospectus must be made available to the public by the issuer, offeror or person asking for admission to trading. While 14(2)(c) states that prospectuses may be published on the website of the financial intermediaries placing or selling the securities, it is clear that the responsibility for such a task still rests with the issuer, offeror, or person asking for admission to trading. Q10: Do you agree that the obligation to publish the prospectus electronically should also apply to the publication of final terms? If not, please state your reasoning.

3 The final terms must be read in conjunction with the base prospectus, so it is incumbent that one must be electronically available if the other is. Electronic publication of the final terms would help improve investor understanding. Q11: Do you agree that the method for publishing final terms should be the same as the method used for publication of the base prospectus? If not, please state your reasoning. Final terms must be read in conjunction with the base prospectus, and allowing the final terms to be published by a different method than the base prospectus is not conducive to investor access and understanding. The IMA would therefore welcome a change to this provision. Q12: Would the issuer, offeror or person asking for admission to trading incur costs if the abovementioned provisions were to be adopted? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify While there may be costs associated with the electronic publication of the final terms, these should be negligible given that the information must already have been drawn up. Q13: Do you consider there are any other impediments to a prospectus being considered available to the public? No. Q14: Do you agree that the obligations to make the prospectus available to the public free of charge also applies to prospectuses that are published electronically? If not, please provide your reasoning. The IMA would not expect that there should be any limitation on the requirement to provide printed prospectuses free of charge. As electronic publication is the most widespread and most accessible method of publication, not to provide electronic publications free of charge would not be conducive to investor understanding. Q15: Would the issuer, offeror or person asking for admission to trading incur costs if the abovementioned provision was to be adopted. If so, please specify the While there may be costs associated with the electronic publication of prospectuses, these should be negligible given that the information must already have been drawn up. As such the IMA would not expect that providing electronic publications free of charge should have a significant negative impact on issuers, offerors, or persons asking for admission to trading. Q16: Do you believe that the proposed measures will enhance the accessibility of electronically published prospectuses. If not, please provide reasoning and/or alternative measures. These measures should improve accessibility by providing investors with clear and designated locations where electronic publications can be found. We would agree that having a designated website for prospectus publications would be unnecessarily burdensome, and that an appropriate level of accessibility is provided for elsewhere in the provisions.

4 Q17: Would the issuer, offeror, or person asking for admission to trading incur costs if the abovementioned provision was to be adopted? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify In general, the IMA expects that, where there is an existing website available on which to publish the electronic publications, such publication would incur negligible costs, given that the required information should already have been drawn up. If, as stated in point 135 of the consultation paper, the issuer, offeror, or person asking for admission to trading was required to establish a new website for the purpose of complying with the prospectus regime, then costs could potentially be higher. However, the IMA considers that this will not be a common occurrence. Q18: Do you agree that the issuer, offeror or person asking for admission to trading should be required to ensure that the hyperlink is active for a minimum period of 12 months? Q19: Would the issuer, offeror, or person asking for admission to trading incur costs if the abovementioned provision was to be adopted? If so, please specify the nature of such costs, indicating whether they are one-off or on-going, and quantify Given that all prospectuses must be published electronically, the provision of a hyper-link should not imply additional costs. While there is potential for costs associated with keeping the hyperlink active for a minimum period of 12 months where this has not previously been the case, any such cost should be negligible. Q20: Do you agree that all information incorporated by reference in a prospectus should be electronically published? If not, please state your reasoning. Electronic publication improves accessibility for investors, allowing for greater transparency and greater investor understanding. Increased use of electronic rather than paper publication should also help reduce costs for issuers, offerors and persons asking for admission to trading. Q21: Would issuers, offerors or persons asking for admission to trading incur cots if required to publish all information incorporated by reference electronically? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify While there may be costs associated with the electronic publication of all information incorporated by reference, the IMA expects that these would be negligible. Furthermore, the increased use of electronic rather than paper publication may also help reduce costs for issuers, offerors and persons asking for admission to trading in the long run. Q22: Do you consider that there are additional means of dissemination of advertisements not covered by the four categories above? If yes, please specify. No. Q23: Do you agree that advertisements which contain inaccurate or misleading information should be amended in the manner proposed? If not, please provide your reasoning.

5 The IMA would welcome the provision that information contained in an advertisement that is inaccurate or misleading should be amended as soon as possible, with reference to the previous advertisement and explicit references to the reason for amendment and the differences between the two versions. Q24: Will the suggested rule impose costs on the issuer, offeror or person asking for admission to trading? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify There could be potential on-going costs for any issuer, offeror or person asking for admission to trading if they are required to amend advertisements containing inaccurate or misleading information. However, as it is already a requirement to amend such advertisements under PD Article 15(3), this should not represent a significant increase in costs from those currently existing. Q25: Do you agree with the requirements suggested for Article 13(1) of the RTS? If not, please provide your reasoning. We welcome these requirements, which provide a framework for ensuring consistency and accuracy of information disclosed both within and outside the prospectus, however as per our response to Q26, we do not support a blanket prohibition of numerical performance measures not included in the prospectus. Q26: Do you believe that the inclusion of numerical performance measures in information disclosed about the offer or admission to trading, which are not contained in the prospectus, should be prohibited? We do not believe that difference in numerical performance measures disclosed in information outside the prospectus should be prohibited. For example, we find it acceptable if issuers use historical information published in audited financial statements beyond the three years required by the Prospectus Directive to demonstrate company performance and financial development. Q27: Do you agree that the issuer, offeror or person asking for admission to trading should be obliged to provide the investor with the information disclosed in durable format, free of charge, upon his request? If not, please provide your reasoning. The IMA supports issuers, offerors or persons seeking admission to be obliged to provide investors with all information disclosed in durable format, free of charge upon request. Q28: Will the proposed provision impose costs on the issuer, offeror or person asking for admission to trading? If yes, please specify the nature of such costs, including whether they are one-off or on-going, and quantify While there may be costs associated with providing such information to investors, the IMA expects that these would be negligible, as the issuer, offeror or person asking for admission to trading will already be required to keep a durable copy of the information for the duration of the period in which it is circulated.

1. Euronext. 2. General Comments

1. Euronext. 2. General Comments Euronext s Response to the ESMA Consultation Paper entitled Draft Regulatory Technical Standards on prospectus related issues under the Omnibus II Directive 1. Euronext Euronext is a leading operator of