Prospektpflicht

Prospektpflicht is the obligation to publish a securities prospectus when offering securities to the public or when securities are admitted to trading on a regulated market. It aims to provide investors with essential information about the issuer, the securities, and the risks involved.

Legal framework: In the European Union, the Prospectus Regulation (Regulation (EU) 2017/1129) sets the general rule and exemptions. Germany implements this regime through the Wertpapierprospektgesetz (WpPG) and supervises compliance primarily via BaFin. The prospectus must be approved before publication by the competent authority or, in some cases, by the issuer with an approval mechanism.

Scope and exemptions: The obligation covers public offers and admissions to trading on a regulated market or multilateral trading facility. Exemptions exist, including offers addressed solely to qualified investors, offers with a total consideration below a statutory threshold, or private placements addressing fewer than 150 natural or legal persons per Member State.

Contents and process: A prospectus typically includes an overview of the issuer, business description, risk factors, financial statements, use of proceeds, and a summary. It must be drafted in accordance with uniform EU requirements and, where applicable, be approved by BaFin before publication.

Consequences: Offering securities without a valid prospectus or falling outside permitted exemptions can lead to regulatory penalties, civil liability for misstatements or omissions, and restrictions on selling or admitting the securities to trading.