Legal interpretation aids
The most important elements of the legal basis of prospectus law are the Capital Market Act (KMG; Kapitalmarktgesetz), which implements the Prospectus Directive, and the Prospectus Regulation. Various publications by the European Securities and Markets Authority (ESMA) as well as the Circular Letter and the Guideline by the Financial Market Authority additionally represent important aids in legal interpretation.
ESMA periodically publishes new and updated documents that deal with complex provisions of prospectus law requiring interpretation. The main sources for prospectus approval procedures are the Questions and Answers – Prospectuses and the Recommendations.
As additional sources of guidance in interpreting the legal basis, the Financial Market Authority draws attention to the FMA Guidelines on Implementing the Changes to the Prospectus Regime, issued on 4 December 2012, and the FMA Circular Letter of 4 December 2012 on issues relating to prospectus law as well as amendments to the Circular Letter.
Both documents are available for downloading at the bottom of this page.
Amendment of 6 February 2014 to Point 4 of the FMA Circular Letter of 4 December 2012:
“The publication of a list with data on the ISIN, the title of the securities and the prices also falls under this rule. This applies based on the consideration that such a list only serves the purpose of information to investors already possessing the securities contained in the list, so that no additional marketing activities take place.”
Amendment of 18 June 2014 to Point 17 of the FMA Circular Letter of 4 December 2012:
“Reference is made to Commission Delegated Regulation (EU) No 382/2014 of 7 March 2014 supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for publication of supplements to the prospectus, which should be read for added understanding of Point 17. Pursuant to Article 2(h) of the RTS established by this Regulation, a supplement is required to be published when the aggregate nominal amount of the offering programme is increased.”
Note on the AIFMG/AIFM Directive
Explicit reference is made to the existence of the Prospectus Directive in addition to Directive 2011/61/EU on Alternative Investment Fund Managers, implying that under certain circumstances both the KMG and the Alternative Investment Fund Managers Act (AIFMG; Alternatives Investmentfonds Manager-Gesetz) could apply. Any review to determine whether the particular issue or business model might represent an alternative investment fund (AIF) is, however, carried out independently of prospectus approval. The onus is on the issuer to determine whether the issue falls under the AIFMG and to take any appropriate measures.
Information on cases to be differentiated from the term “public offering” pursuant to Article 1 para. 1 no. 1 KMG and on cases demonstrating when no declaration of consent as specified in Article 3 para. 3 KMG is required:
- Where a customer contacts a credit institution and expresses the wish to purchase a specific security, the conditions constituting a case of public offering pursuant to Article 1 para. 1 no. 1 KMG are not met.
- Where, upon a customer’s request for advice on securities, a credit institution uses lists of information on securities, such a case represents individual securities advice and not a public offering within the meaning of Article 1 para. 1 no. 1 KMG.
- Where, during a public offering subject to the obligation to publish a prospectus, a credit institution offers securities under one of the cases of exemption from the prospectus obligation specified under Article 3 para. 1 KMG, a declaration of consent as referred to in Article 3 para. 3 KMG is not required, provided that the offering is independent of the issuer and is not an offering of securities that has been coordinated or made in consultation with the issuer.
- Where lists of information about securities are published on the credit institution’s website solely for the purpose of providing information to existing investors, this does not represent a public offering within the meaning of Article 1 para. 1 no. 1 KMG, provided that:
- only data on the ISIN, the title of the securities and the prices are disclosed;
- the information is for secondary market Investors;
- a disclaimer is published (i.e. indicating that it is not a public offering); and
- no advertising activities as specified in Article 4 KMG take place, which could qualify it as a public offering within the meaning of Article 1 para. 1 no. 1 KMG.