Capital markets and structured investments

The general rule is that any public offer of securities must be preceded by the disclosure of a prospectus.

The exceptions to this rule are:

• public offers of securities to be awarded, on the occasion of a merger, to at least 150 shareholders other than institutional investors, provided that a document containing information considered by the CMC to be equivalent to that of a prospectus is available at least 15 days before the date of the General Meeting;
• the payment of dividends in the form of shares of the same class as the shares in respect of which the dividends are paid, provided that a document is available containing information on the number and nature of the shares and the reasons for and details of the offer;
• public offers for distribution of securities to existing or former directors or employees by their employer where the employer has securities admitted to trading on a regulated market or by a company controlled by it, provided that a document is available containing information on the number and nature of the securities and the reasons for and details of the offer; and
• public offers for sale of securities admitted to trading on a regulated market, provided that the admission prospectus is up to date.

The general position under the Corporations Act 2001 (Cth) is that debt securities may only be offered and sold in Australia if they are accompanied by a disclosure document prepared in accordance with the Corporations Act 2001 (Cth).

Offers of debt securities can generally be made to institutional/professional investors without a disclosure document.

Offers of debt securities to retail investors will require a disclosure requirement, most commonly in the form of a prospectus.

Even where a prospectus is not required by law, an information memorandum is commonly used for marketing purposes.

Offers to professional investors requires issuers in certain circumstances to prepare and publish a short-form information note which complies with the minimum information requirement set out in the Prospectus Law. A prospectus must be prepared in case of admission to trading on a regulated market.

An offer to the public of debt securities requires in principle a prospectus.

Unless an exemption applies, a prospectus is necessary when there is a public offer of securities.

The sale, the sale commitment, the sale or subscription offer and the acceptance of a sale or subscription offer of securities shall be considered public distribution acts if involving any of the following elements:

• the use of sales or subscription lists or bulletins, leaflets, prospectus or advertisements addressed to the public by any means;
• the complete or partial search for undetermined subscribers or purchasers, even if attempted through standard communications directed to individually identified addressees, through employees, representatives, agents, or any individual or legal entity, whether they take part in the securities distribution system or not, or the consultation on the offer feasibility or the collection of an investment commitment with subscribers or undetermined purchasers if said consultation or collection is not in compliance with the applicable Brazilian Securities Commission (CVM) regulation;
• negotiations made in stores, offices or branches open to the public and addressed, in whole or in part, to undetermined subscribers or purchasers; or
• the use of oral or written marketing, letters, advertisements or notices, especially through mass or electronic media (pages or documents on the internet or other open computer networks and e-mail), which contain any communication addressed to the general public aiming at promoting, directly or through third parties acting on behalf of the offer or of the issuer, the subscription or disposal of securities.

For such purposes, a class, category, or group of people, even if individualized, with the exception of those who have had a close and regular previous commercial, credit, partnership or work relationship with the issuer, shall also be considered general public.

Any offering of debt securities requires a prospectus, unless an exemption from the prospectus requirement applies.

According to General Rule (Norma de Carácter General) No 30 of the CMF, the public offering of debt securities requires the submission of a prospectus (which is pre-drafted by the CMF and must be filled by the issuer). Before it can be published, the prospectus must be previously submitted before the CMF.

In case of public tender offers, the offeror must prepare a prospectus containing all the terms and conditions of the offer, and make it available to the interested parties, in the places mentioned in the Securities Law, from the date of the notice of initiation and during the validity of the public tender offer.

Under applicable law, unless an exemption applies, it is necessary to prepare and publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 100 identified investors; or is addressed to the issuer's shareholders, so long as there are less than 500 shareholders; or if the issuer is a public utilities company which is offering its shares to investors who will benefit from investments in infrastructure.

Under the Prospectus Directive, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is:

• made solely to qualified investors;
• addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state; or
• where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market.

An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Under the Securities Markets Act, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market.

According to Chapter 3, Section 2, however, a prospectus need not be published, for example, if the notification procedure as provided for in article 25 of the Prospectus Regulation is not applied to the offering, and the securities are offered in the EEA-area during a period of twelve months in an amount with a total consideration of a maximum €8 million. In addition it is required that the issuer publishes and delivers to the Finnish Financial Supervisory Authority a Key Investor Information Document, in cases where the securities are offered in an amount with total consideration of less than €1 million calculated in the EEA area over a period of 12 months.

Furthermore, a prospectus need not to be published, if the securities are offered:

• solely to qualified investors;
• calculated per each EEA member state, to fewer than 150 investors;
• to be acquired for a total consideration of at least €100,000 per investor and per offer or in units with a denomination or consideration of at least €100,000; or
• in an amount with a total consideration of less than €2.5 million calculated in the EEA over a period of 12 months.

Under the Prospectus Directive, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

The obligation to publish a prospectus does not apply to offers made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state or where the minimum denomination per unit is at least EUR100,000.

The definition of ‘qualified investor’, following the implementation under French law of Directive 2010/73/EU has been aligned with the definition provided under the Markets in Financial Instruments Directive. Pursuant to article D. 411-1 of the French Monetary and Financial Code, in order to be a qualified investor, a person needs to be either a professional client or an eligible counterparty.

If the offer is deemed not to be made to the public, a prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market.

It is necessary to prepare a prospectus in the case of non-exempted public offers and listings.

Every invitation to the public by a private (i.e. non-government) issuer or by a statutory body (e.g.  a local government entity) requires a prospectus. There are circumstances where a statement in lieu of prospectus is acceptable and in the case of a restricted invitation, a short form prospectus may be sufficient.

Under the Prospectus Directive, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer is deemed not to have been made to the public if:

• securities are offered only to qualified investors;
• securities are offered to less than 150 persons in each EU member state who are not considered to be qualified investors;
• securities are offered to investors who each purchase securities for a total consideration of at least €100,000, or its equivalent in any other currency;
• the face value of the securities offered is at least €100,000, or its equivalent in any other currency;
• the total consideration for all securities in the EU included in the offer shall not exceed €100,000, or its equivalent in any other currency, within twelve months from the date of announcement of the offer; and/or
• a limited company is created by the transformation of a cooperative society and its shares are offered only to the members and shareholders of the predecessor.

Even if the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is required in order to avoid having to publish a prospectus.

Securities can only be offered to the public in the EU after prior publication of a prospectus in accordance with the Prospectus Regulation. Securities shall only be admitted to trading on a regulated market situated or operating within the EU after prior publication of a prospectus in accordance with the Prospectus Regulation.

An offer would not be deemed to have been made to the public if, among other things, it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per Member State or where the minimum denomination per unit is at least EUR100,000.

Pursuant to the Irish Regulations there is an additional exemption from the obligation to publish a prospectus where the total consideration of the offer does not exceed EUR8 million.

Even if the offer is deemed not to be made to the public, a Prospectus Regulation compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Under the Prospectus Regulation, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid publishing a prospectus.

It is necessary to prepare an information note (concept used in the WAMU instead of prospectus) for any proposed public offer for listed securities, which must be approved, in advance, by the Regional Council. It must contain specific information according to the types of public offer concerned. (Article 123 of the General Regulations of the CREPMF).

When a State or a group of States intend to issue public debt securities, their governments draw up an information note which is transmitted to the Regional Council before the date of issue of the securities.

Any solicitation transaction must be accompanied by the sending or handing over to the solicited person of the information note or any other explanatory document, endorsed where appropriate, with the approval of the Regional Council before any initial issuance (Article 157).

As noted previously, it is necessary to prepare and deliver a prospectus before or upon the allocation of debt securities in a public offering. The prospectus may be delivered in electronic form with the consent of the recipients of the prospectus.

Under the Luxembourg law dated 16 July 2019 on prospectuses for securities , any communication to any person(s), in any form and by any means that contains sufficient information on the terms of the offer and the securities being offered requires a prospectus so as to enable a potential investor to make their decision whether to purchase or subscribe for such securities.

An exemption from publishing a prospectus will apply, inter alia, to an offer:

• addressed solely to qualified investors 9as explained below);
• addressed to fewer than 150 individuals or legal entities per EU or European Economic Area member state other than qualified investors, or where the offer is for a total of at least €100,000;
• addressed to investors who acquire securities for a total consideration of at least €100,000 per investor and for each separate offer; or
• involving securities with a total consideration of less than €8 million (such limit shall be calculated over a period of 12 months).

If the offer is deemed not to be made to the public, a prospectus which complies with the Rules and Regulations of the Luxembourg Stock Exchange may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having published a prospectus.

A prospectus is required when an offer of securities is made to the public. There are exemptions to this rule under Mauritius laws.

Generally, all debt public offerings require registration with the CNBV and filing a prospectus for approval, except for:

• short-term offerings that require issuers to file only an oferring statement (aviso de oferta); and
• issuances under programs, which only require an information memorandum (suplemento) because the prospectus was filed when the relevant program was authorized.

Offerors wishing to complete a transaction on financial securities are required to prepare an information document which, before its public release, must, in most cases, be approved by the AMMC.

The information document must include all the information necessary for the public to make investors' judgments about the issuer's assets, financial position and business.

The information document must be updated as soon as new accounts are closed and new items arise. This update must also be validated by the AMMC.

Unless certain exclusions or exemptions apply, it is unlawful to offer debt securities to the public in the Netherlands or to request that they be admitted to trading on a regulated market operating in the Netherlands unless an approved prospectus has been made available to the public.

Below, the most relevant exclusions and exemptions are discussed.

No prospectus will need to be made publicly available for the offer of debt securities to the public in the Netherlands in the event that:

• the securities are offered exclusively to qualified investors;
• the securities are offered to fewer than 150 persons, other than qualified investors;
• the securities on offer can only be acquired for an equivalent value of at least EUR100,000 per investor;
• the denomination per security is at least EUR100,000; or
• the  offer of securities to the public have a total consideration in the European Union of less than EUR 1,000,000 calculated over a period of 12 months.

Lastly, no prospectus will need to be made publicly available for offering debt securities to the public in the Netherlands or requesting that the debt securities will be admitted to trading on a regulated market operating in the Netherlands, if:

• the debt securities have a total consideration in the EU of less than EUR 5 million - this threshold is lower than the EUR 8 million maximum threshold possible under the Prospectus Regulation. For offers below EUR 5 million, the issuer in the Netherlands must: (i) notify the Dutch Authority for the Financial Markets (Autoriteit Financiele Markten, AFM) of the offering of securities to the public; and (ii) complete an information document in the form required under Dutch law, submit the completed form to the AFM and make the information document available to investors;
• it concerns a very specific type of securities.

It is necessary to register a product disclosure statement for all regulated offers of managed investment products, derivatives, debt securities and equity securities. A regulated offer is an offer made to a retail investor.

Section 7-2 of the Securities Trading Act 2007 states that where an offer to subscribe for or purchase transferable securities is addressed to 150 or more persons in the Norwegian securities market, and involves an amount of at least €1 million calculated over a 12-month period, a prospectus shall be prepared in accordance with the rules of chapter 7 of the Securities Trading Act chapter 7. The same applies where an offeror residing in Norway makes an offer in another European Economic Area (EEA) state and the prospectus requires approval pursuant to section 7-7 of the Securities Trading Act. Chapter 7 implements the EEA directives (EF) 2003/71 and (EF) 2004/809.

It is also necessary to prepare a prospectus upon admission to trading of transferable securities in a Norwegian regulated market place, including increases of capital in companies with quoted shares. The same applies where an issuer residing in Norway seeks admission to trading on a regulated market in another EEA state and the prospectus requires approval pursuant to the provisions of section 7-7 of the Securities Trading Act of 2007.

Section 7-4 number 8 of the Securities Trading Act of 2007 states that the provision of section 7-2 does not apply where the offer is addressed to professional investors pursuant to further rules laid down by the ministry in regulations.

Unless an exemption applies, it is necessary to prepare, register and publish a prospectus before the Superintendence of Securities Market (SMV) where there is an initial public offering (IPO) of securities, ie the public offering of new securities.

Among other reasons, the prospectus is needed in order to have a security subject to the IPO entered in the Securities Registry. The basic requirements for the preparation of the prospectus are stated in the Regulations on the Initial Public Offering of Marketable Securities (Reglamento de Oferta Pública Primaria y de Venta de Valores Mobiliarios) (Resolution Conasev 141-1998-EF/94.10) and SMV supplemented regulations (Normas Comunes para la Determinación del Contenido de los Documentos Informativos) (Resolution Conasev 211-98-EF/94.1.1).

In addition, there are other special regimes that require lighter requirements.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors or where the minimum denomination per unit is at least PEN499,908.28 in 2019 (equivalent to approximately US$147,770.70). The denomination per unit is annualy adjusted.

The underwriting or acquisition of securities presupposes the acceptance by the underwriter of all terms and conditions of the offering, as they appear in the informative prospectus.

Under the Prospectus Directive, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state, or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

According to Portuguese law, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for securities to be admitted to trading on a regulated market.

An offer is deemed to have been made to the public if:

• it is made solely to an undetermined pool of investors or to the generality of the shareholders of a listed company, even if the share capital is represented by nominal shares;
• the offer is preceded or followed by a solicitation addressed to an undetermined pool of investors or general advertising promotion; or
• it is offered to more than 150 persons (other than qualified investors) per European Economic Area state.

If the offer is deemed not to be made to the public, a prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Unless an exemption applies, it is necessary to register a prospectus with the Office of the Commissioner of Financial Institutions of Puerto Rico or the US Securities and Exchange Commission where there is an offer of securities to the public.

Under Romanian law, unless an exemption applies, it is necessary to publish a prospectus approved by the Financial Supervisory Authority where there is an offer of securities to the public.

Certain exemptions where the preparation and publishing of a prospectus are not mandatory apply, such as, inter alios, the following:

• an offer of securities addressed solely to qualified investors;
• an offer of securities addressed to less than 150 investors, natural or legal persons, other than qualified investors, per member state of the EU;
• an offer of securities addressed to investors who each acquire securities of at least the equivalent in RON of €100,000 for each separate offer;
• an offer of securities whose nominal value per unit amounts to at least the RON equivalent of €100,000; and
• an offer of securities whose total value in the EU is less than the equivalent in RON of €100,000, calculated over a period of 12 months.

Even if the offer is exempted from the prospectus requirement, as a general rule a prospectus is still required if an application is made for the securities to be admitted to trading on a regulated market.

Under Russian law, a prospectus must be prepared in all cases, unless one of the following exemptions apply:

• securities are placed with qualified investors or the persons that can exercise a preemptive right in respect of such shares or securities (convertible into shares);
• shares or securities convertible into shares are placed with persons that, as on a certain date, are or were shareholders of the issuer;
• securities are offered to a maximum of 150 persons (qualified investors and persons that can excercise a preemptive right in respect of such securities not counted);
• funds raised by the securities offerings during a year do not exceed RUB 4 billion for a credit organization or RUB 1 billion for all other issuers;
• funds paid by each potential purchaser (apart from the persons exercising their preemptive right) are not less than RUB 1 million 400 thousand ; or
• registration of separate terms and conditions of bonds under a program where a prospectus has been registered simultaneously with registration of the program within one year from the date of registration of the prospectus.

It is necessary to prepare an information note (concept used in the WAMU instead of prospectus) for any proposed public offer for listed securities which must be approved, in advance, by the Regional Council. It must contain specific information according to the types of public offer involved. (Article 123 of the General Regulations of the CREPMF).

When a state or a group of states intends to issue public debt securities, their governments draw up an information note which is transmitted to the Regional Council before the date of issue of the securities.

Any solicitation transaction must be accompanied by the sending or handing over to the solicited person of the information note or any other explanatory document, endorsed where appropriate, with the approval of the Regional Council before any initial issuance (Article 157).

All offers of securities require the preparation of a prospectus unless an exemption is available. Possible exemptions include the issue or transfer of securities for no consideration eg employee share option schemes, small personal offers where the total amount raised from such offers within any 12-month period does not exceed S$5 million or such other amounts as may be prescribed by the Monetary Authority of Singapore and an offer to no more than 50 persons within any period of 12 months and under certain conditions.

Under the Slovak Securities Act the obligation to publish a prospectus shall apply to public offers of securities if the total value of each offer in the European Union, calculated over a period of 12 months, exceeds EUR1 million.

If the offer is an 'offer to the public' as defined in the Companies Act, the issuer must prepare and register a prospectus satisfying the requirements of the Companies Act. There are certain exemptions as to what constitutes an ‘offer to the public’ (see section 96 of the Companies Act as discussed above).

Under the Prospectus Regulation, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

For more information, see Issuing and investing in debt securities – investor considerations.

If the offer is deemed not to be made to the public, a Prospectus Regulation compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Under the Prospectus Directive (implemented in Swedish law mainly through the Financial Instruments Trading Act 1991 (Lag (1991:980) om handel med finansiella instrument) and the Swedish Act on Supplementary Provisions to the Prospectus Directive (Lag (2019:414) med kompletterande bestämmelser till EU:s prospektförordning)), unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Subject to certain exemptions, submission of a draft prospectus is generally required upon offering of debt securities. Exemptions includes, for example:

• offering debt securities to investors outside Thailand;
• offering newly issued bonds/debentures without transfer restriction by way of limited offer or to institutional investors established under foreign laws; and
• offering debentures with certain conditions specified by the Securities and Exchange Commission (SEC).

An offer would not be deemed to have been made to the public if it is addressed to fewer than 100 persons.

Under the Prospectus Regulation (as implemented in the UK by Financial Services and Markets Act 2000 and the FCA’s Prospectus Regulation Rules), securities shall only be offered to the public in the European Union after prior publication of a prospectus in accordance with the Prospectus Regulation. Securities shall only be admitted to trading on a regulated market situated or operating within the EU after prior publication of a prospectus in accordance with the Prospectus Regulation.

An offer would not be deemed to have been made to the public if, among other things, it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per member state or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Regulation compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

Under the Prospectus Directive, unless an exemption applies, it is necessary to publish a prospectus where there is an offer of securities to the public or an application for the securities to be admitted to trading on a regulated market.

An offer would not be deemed to have been made to the public if it is made solely to qualified investors, addressed to fewer than 150 persons (other than qualified investors) per European Economic Area state or where the minimum denomination per unit is at least €100,000.

If the offer is deemed not to be made to the public, a Prospectus Directive compliant prospectus may still be required if an application is made for the securities to be admitted to trading on a regulated market. An exemption from both the offer to the public and the admission to trading on a regulated market is needed to avoid having to publish a prospectus.

The general position under UAE law is that a prospectus is required where there is either:

• an offer to the public of the relevant debt securities; or
• an application is made for listing on one of the exchanges in the UAE.

However, on the basis that debt securities are often also marketed outside of the UAE, the local debt securities market has seen a degree of alignment with prospectus requirements under the EU Prospectus Directive.

Any registered securities offering under the Securities Act of 1933 will require the preparation and filing of a prospectus.

Rule 144A only requires certain limited disclosures to be made to investors, however market practice typically requires substantially the same disclosure in a Rule 144A offering as in a registered securities offering.