COVID-19: European Commission Adopts a Set of Measures for the Recovery of EU Capital Markets

On July 24, the European Commission adopted a set of measures to help facilitate bank lending to households and businesses throughout the EU (the Measures).

The Measures aim to make it easier for capital markets to support EU businesses in their recovery from the COVID-19 pandemic by encouraging greater investments in the economy, allowing for the rapid recapitalization of companies and increasing banks’ capacity to finance the recovery.

The Measures propose changes to:

1. the Capital Requirements Regulation;

2. the revised Markets in Financial Instruments Directive (MiFID II);

3. the Prospectus Regulation (for more information on the changes to the Prospectus Regulation, see the July 31, 2020 edition of Corporate & Financial Weekly Digest (below); and

4. the Securitisation Regulation.

The Measures are available here.

COVID-19: European Commission Adopts Proposal to Amend Prospectus Regulation

On July 24, the European Commission (the Commission) adopted a legislative proposal to amend the Prospectus Regulation and assist with the recapitalization of companies that have been affected by the COVID-19 pandemic (the Proposal).

The key changes under the Proposal are:

1. the introduction of a new simplified, short-form, temporary prospectus. The temporary prospectus reduces the number of pages typically required for a prospectus from hundreds to just 30. It will be available in relation to secondary issuances of shares by issuers that are already admitted to trading on a regulated market or a small and medium enterprises (SME) growth market for a continuous period of at least 18 months;

2. extensions to certain deadlines regarding supplementary prospectuses; and

3. temporarily increasing the prospectus exemption threshold from EUR 75 million to EUR 150 million for certain non-equity securities issued by a credit institution in a continuous or repeated manner.

The Commission has confirmed that the temporary prospectus regime and the measures mentioned above will expire 18 months after the date of application of the amending Prospectus Regulation.

In order for the proposal to go into effect, it must be adopted by the European Parliament and the Council of the EU.

The Proposal is available here.