When is a simplified prospectus required

However, other risks within the category do not need to be ranked in order of materiality. These changes, along with the new ESMA Guidelines on Risk Factors, will no doubt result in competent authorities becoming more rigorous in their review of risk factors, which could lengthen the timetable for prospectus approvals.

However, if issuers follow the new rules and guidelines in drafting the relevant disclosures, they should not be overly concerned about the new requirements in relation to risk factors.

The authors of this post believe that the new rules and guidelines on risk factors are generally consistent with current market practice in the UK, for example not including generic risks, though the new requirement to present the most material risks in each category first will focus minds on the ordering of risk factors.

The Prospectus Regulation introduces a new simplified disclosure regime for secondary issues, which replaces the current proportionate disclosure regime for rights issues.

Issuers that have been listed for at least 18 months on a regulated market or SME growth market may use a simplified prospectus consisting of a summary, a specific registration document, and a specific securities note containing reduced disclosure requirements. A simplified prospectus requires only one year of historical financial information, in addition to a working capital statement. An investment fund that wants to distribute its securities to the public in Ontario is required to file a prospectus.

The prospectus contains key information about the investment fund and the securities offered. An investment fund that is required to file a prospectus in Ontario must begin by filing a preliminary prospectus with the Ontario Securities Commission OSC. The OSC reviews, provides comments, and may ask for changes to the preliminary prospectus.

The investment fund must then make changes to the prospectus to the satisfaction of the OSC. If a receipt is issued for the final prospectus, the investment fund can then use the prospectus to offer securities to the public. Once a receipt is issued for the final prospectus, the investment fund becomes a reporting issuer in Ontario, and is subject to ongoing investment fund reporting issuer obligations.

An investment fund can distribute its securities under its prospectus for up to 12 months. Simplified prospectus explained The simplified prospectus is a legal document, filed with the appropriate securities regulator that gives investors important information about the mutual fund. Simplified prospectuses are no longer required to be sent automatically to investors; instead, they are available by request.

If you are a financial advisor, consider walking through those simplified prospectuses for mutual funds that you recommend to your clients with them.

If you do not allow these cookies, you will experience less targeted advertising. Find out more about www. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules.

The following persons may choose to draw up a simplified prospectus under the simplified disclosure regime for secondary issuances, in the case of an offer of securities to the public or of an admission to trading of securities on a regulated market:. The simplified prospectus shall consist of a summary in accordance with Article 7, a specific registration document which may be used by persons referred to in points a , b and c of the first subparagraph of this paragraph and a specific securities note which may be used by persons referred to in points a and c of that subparagraph.

By way of derogation from Article 6 1 , and without prejudice to Article 18 1 , the simplified prospectus shall contain the relevant reduced information which is necessary to enable investors to understand:. The information contained in the simplified prospectus shall be written and presented in an easily analysable, concise and comprehensible form and shall enable investors to make an informed investment decision.

It shall also take account the regulated information that has already been disclosed to the public pursuant to— 3. Third country issuers whose securities have been admitted to trading on an SME growth market shall compile the most recent financial information pursuant to point a of the second subparagraph of paragraph 3 of this Article, containing comparative information for the previous year included in the simplified prospectus in accordance with Article 23a of [the PR Regulation ].

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