New power for greater investor protection: FMA publishes investor warning for the first time in relation to the Capital Market Act 2019 (KMG 2019)
The Austrian Financial Market Authority (FMA) has published an investor warning pursuant to the Capital Market Act 2019 (KMG 2019; Kapitalmarktgesetz 2019) for the first time today, in which it warns that the entity Blue Palm Group Inc. is offering a security in Austria without having issued a securities prospectus that it is legally obliged to draw up:
Blue Palm Group Inc.
2280 West Oakland Park Boulevard, Suite 225C
Oakland Park, FL 33311
The entity is therefore not authorised to distribute this security in Austria.
The publication of such an investor warning is one of many new powers to ensure greater investor protection that has been conferred upon the FMA following the entry into force of the new Capital Market Act 2019 in July 2019.
Entities that publicly offer securities are obliged, apart from certain exceptions, to publish information about them in a clear and comprehensible manner in a securities prospectus. Such a prospectus contains detailed information such as, for example, an insight into its assets and liabilities, information about its financial situation, profits and losses, as well as the future prospects of the issuer and every guarantor. Investors should therefore be able to obtain a basic impression about the issuer and its publicly offered securities and to be able to make an informed decision about whether to invest.
The FMA checks securities prospectuses for completeness, coherence and comprehensibility. For a public offering of securities to be allowed to take place, a securities prospectus must be approved by the FMA and published by the issuer or the offeror in a legally valid manner. Issuers are liable for the correctness of the information contained in a securities prospectus.
Investment prospectuses (e.g. for silent participations or closed funds) are different to securities prospectuses. They are not checked by the FMA; instead their completeness as well as correctness is checked by a prospectus auditor.
The investor warning may be found on the FMA website.
Further information about capital market prospectuses can also be found on the FMA website.
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