FESE members believes that, in order to be successful, the review of the Prospectus rules should significantly reduce burdens for companies, and ensure that rules are aligned with the existing framework and not duplicated.

In particular, we would recommend retaining flexibility for companies as this would allow them to better highlight to investors their distinct characteristics and features.

Flexibility is also key to avoid duplication of information and make prospectuses more comprehensible. It takes on even more importance in the case of SMEs since they do not have as many resources to spend on disclosing information as large companies.

We would also encourage regulators to consider specific regimes currently adopted by the existing markets for growth companies, for example in the case of the approval procedures, and to reuse their features as much as possible. Although many requirements are naturally and still should be harmonised across the EU, there may well be practices which have developed in a local ecosystem and which motivate certain requirements. Especially smaller companies in earlier stages of growth are more dependent on local investors for financing, and thus the room for local adaptation of rules becomes especially important.

Last but not the least, in considering the proposals from the European Commission on the ESAs Review, and in particular on any amendment to the Prospectus Regulation, FESE believes the focus should be on the following high-level principles and objectives:

  • Strengthening supervisory convergence within ESMA’s current tools and structures
  • Dismiss any unjustified proposals for new direct supervision
  • Use the NCAs competence and knowledge to enhance the EU supervision and boost CMU

Read the full response here.