Prospectus Regulation
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Know the numbers? Now learn the why.Read the Prospectus Regulation study notes: short answers, key numbers and the law behind each rule.
- What does the Prospectus Regulation cover, and how is it enforced in Cyprus?
- When is a prospectus required, and which offers and admissions are exempt?
- How is a prospectus put together, and how long does it stay valid?
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Scope & authority
- What is the Prospectus Regulation, when did it take effect in Cyprus, and who is the competent authority?
- Regulation (EU) 2017/1129, adopted on 14 June 2017 and fully applicable since 21 July 2019. It replaced the Prospectus Directive (2003/71/EC). In Cyprus, Law 114(I)/2005 has not been repealed: the exam material says it is pending repeal, and until a new law is enacted it still supplies the rules on signatories and liability and CySEC's fees. CySEC is the competent authority for the Republic of Cyprus. The Listing Act (Regulation (EU) 2024/2809) amended the Regulation in stages on 4 December 2024, 5 March 2026 and 5 June 2026.
Scope & thresholds
- What consideration thresholds affect the prospectus obligation?
- Exam material: the Regulation does not apply below €1,000,000 over 12 months, and offers below €5,000,000 over 12 months that are not passported are exempt (a figure from Law 114(I)/2005, section 4(3)(e), 2019). Since 4 December 2024: the €1 million floor is deleted, so small offers are inside the Regulation and rely on an exemption. Since 5 June 2026: offers that are not passported are exempt below €12 million per issuer or offeror over 12 months; a Member State may choose €5 million instead and must notify the Commission and ESMA.
Exemptions
- Name investor-based exemptions from the obligation to publish a prospectus.
- Offers addressed solely to qualified investors; offers to fewer than 150 non-qualified persons per Member State; securities with a denomination of at least €100,000 per unit; and offers where each investor commits at least €100,000.
- Name issuer-type exemptions from the prospectus obligation.
- Outside the Regulation altogether (scope exclusions, though questions may call them exempt): non-equity securities of a Member State or its regional or local authorities, public international bodies with a Member State as a member, the ECB or national central banks; shares in Member State central banks; securities unconditionally guaranteed by a Member State; and securities of recognised non-profit bodies raising funds for their objectives. Inside the Regulation but exempt from the duty to publish: non-equity securities a credit institution issues continuously or repeatedly, if not subordinated, convertible or exchangeable and not carrying subscription rights or derivative links, below a ceiling per institution over 12 months. Exam material: €75 million. Since 4 December 2024: €150 million.
- What 20% exemption applies to admission to trading?
- No prospectus is needed to admit securities fungible with those already admitted to the same regulated market, or shares of an admitted class resulting from conversions, exchanges or exercised rights, while they stay below a share of those already admitted over 12 months. Exam material: 20%. Since 4 December 2024: 30% (the two exemptions cannot be combined above 30%), and an issuer admitted for at least 18 months can also admit further fungible securities with no cap by filing a short Annex IX document.
Prospectus structure
- In what formats may a prospectus be drawn up, and what are the three separate documents?
- As a single document or as separate documents: the registration document (information on the issuer), the securities note (information on the securities), and the summary (key information for retail investors).
- How many sections must the prospectus summary contain, and what standard must it meet?
- Four sections (introduction/warnings, key information on the issuer, on the securities, and on the offer/admission). It must be accurate, fair, clear and not misleading.
Supplements
- When must a prospectus supplement be published, and how quickly is it approved?
- Without undue delay when a significant new factor, material mistake or material inaccuracy that may affect the assessment of the securities arises or is noted between approval and the close of the offer or the start of trading, whichever is later. It is approved in the same way as the prospectus, within at most 5 working days. Investors who had already agreed to buy may withdraw within 3 working days of its publication (2 working days before 4 December 2024).
Validity
- How long is a prospectus valid, and when does the period start for separate documents?
- 12 months after approval. Where drawn up as separate documents, the period begins on approval of the securities note. A registration document or universal registration document (URD) is also valid for 12 months as a constituent.
Frequent issuers
- What benefit does a URD give a 'frequent issuer'?
- Exam material: after two consecutive financial years of approved URDs, the issuer may file later URDs without prior approval. Since 4 December 2024: one approved financial year is enough. As a frequent issuer it also gets a decision within 5 working days (instead of 10) on a prospectus made of separate documents, if it gives the authority 5 working days' notice.
Approval & passporting
- What are the prospectus approval timelines, and how does passporting work?
- The competent authority decides within 10 working days (20 for a first-time issuer) and notifies ESMA within 1 working day. Home Member State approval is valid EU-wide (passporting) on notification to ESMA and host authorities; supervision remains with the home authority. Approved prospectuses stay in ESMA's public database for 10 years.
Signing & liability
- Who must sign a prospectus, and what liability regime applies?
- The issuer, offeror or applicant signs, through its legal representatives if it is a legal person. Exam material: at least three executive directors of the issuer's board also sign, and the chairman and managing director(s) sign only for admissions. The Law (section 20(2), unchanged since 2005): a legal-person offeror or applicant needs at least three executive members of its own board and, in any event, its chairman and managing director(s), for offers and admissions alike. Persons named as responsible sign too. Signatories must prove accuracy or lack of fault; claims against signing directors and named persons lapse after 2 years, except for fraud (the exam material's 'malicious intention'), and underwriters and experts face a 1-year limit.