On Feb. 18, ESMA issued product supplements guidelines consultation.
ESMA published consultation on draft guidelines on supplements which introduce new securities to a base prospectus, with aim of harmonizing supervision in this area.
Background
Article 23(4A) of the Prospectus Regulation (PRSP Reg 2017/1129) states that a supplement to a base prospectus shall not be used to introduce a new type of security for which the necessary information has not been included in that base prospectus.
And Article 23(8) requires EMSA to develop guidelines to specify the circumstances in which a supplement is to be considered to introduce such a new type of security.
Guidelines needed to align EU-wide supervision on this, which has been characterized by longstanding divergence, which can lead to different supervisory outcomes.
Consultation
The paper expands on the reasons for publication of the proposed guidelines by commenting on the sources of divergence on supervision of product supplements.
Presents ESMA's rationale for its proposed guidelines and sets out the guidelines.
These aim to bring more certainty for market participants when submitting supplements with security-related information to EU national competent authorities.
The guidelines clarify role of supplement under Prospectus Regulation and nature of information they should or should not include; explain what issuers should do to avoid risk of submitting a product supplement to a national competent authority (NCA).
The proposed guidelines also provide examples of supplements that do not introduce a new security relative to those already described in the base prospectus.
Effectiveness
Closing date for the submission of responses to the proposals is May 19, 2025.
ESMA will publish a final report and guidelines in Q4 2025.
