When is a prospectus required, and which offers and admissions are exempt?

There are two duties. Securities may be offered to the public in the Union, and admitted to a regulated market there, only after a prospectus has been published. Each duty has its own exemptions, and one does not settle the other: an offer made only to qualified investors needs no prospectus, but listing the same shares still needs one unless an admission exemption applies. Exemptions may be combined, within the limits below. An exempt offer or admission may still use a voluntary prospectus, which once approved carries the passport.

Four exemptions turn on the audience or the ticket size: offers addressed only to qualified investors, meaning professional clients and eligible counterparties under MiFID II (How are clients categorised as retail, professional or eligible counterparties?); offers to fewer than 150 persons, natural or legal, per Member State (qualified investors are left out of the count); securities with a denomination of at least €100,000 per unit; and offers in which each investor invests a total of €100,000 or more, counted per offer.

Others follow corporate events: new shares replacing existing shares of the same class without increasing issued capital; securities issued in a takeover by exchange offer, a merger or a division, if a document describing the deal and its effect on the issuer is published (since 31 December 2019 only for equity securities, in defined cases; the exam material omits this limit); dividends paid in shares of the same class, with a document on the shares and the offer; and securities that an employer, or an affiliate, offers or allots to current or former directors or employees, with a similar document, whether equity or non-equity. Offers by authorised crowdfunding service providers within the Crowdfunding Regulation's limit are also exempt (What are the rules for tied agents, eligible counterparties and crowdfunding?). Non-equity securities that a credit institution issues continuously or repeatedly are exempt, for offers and admissions, while the Union total per institution over 12 months stays below a ceiling and they carry no subordination, conversion, exchange, subscription right or derivative link. The exam material says €75 million. Since 4 December 2024 the ceiling has been €150 million.

The exam material gives a small-offer figure from Cyprus law: an offer is exempt if its total consideration in the Union is below €5,000,000 over 12 months and it is not notified, citing Law 114(I)/2005, section 4(3)(e). That section was inserted in April 2019, when the Regulation let each Member State set a national threshold of up to €8 million, and the notification it means is the passport procedure of Article 25.

Since 5 June 2026 the Regulation itself exempts an offer that is not passported where the total consideration in the Union is 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. The 12-month total adds ongoing offers and those of the previous 12 months, of all types and classes of security, but leaves out offers made under a prospectus or another offer exemption.

Two exemptions cover further issues by listed companies: securities fungible with those already admitted to the same regulated market, and shares of an admitted class that result from converting or exchanging other securities or exercising rights attached to them. Each is available if, over 12 months, the new securities amount to less than 30% of those already admitted (for conversion shares, of that class, with some exceptions). The two cannot be combined to admit more than 30% of a class in 12 months without a prospectus. The exam material gives 20% for both. Since 4 December 2024 the Listing Act has set 30%.

Also since 4 December 2024, 18-month routes with no percentage cap exist. An issuer with securities admitted to a regulated market without interruption for 18 months or more may admit further fungible securities; for an offer, 18 months on an SME growth market or a regulated market is enough (What is an SME growth market, and how does an MTF qualify?). A related offer exemption needs no 18-month history: securities to be admitted to the same market, fungible with those already there and below 30% of them over 12 months. In each case the issuer must not be under restructuring or insolvency proceedings, and must file with the home authority, and publish, a document following Annex IX of the Regulation, of at most 11 A4 sides. It is filed, not approved, and is not a prospectus. The 18-month routes cannot be used for securities issued in a takeover by exchange offer, a merger or a division.

The other admission exemptions mirror the offer list: substitution shares, free shares and scrip dividends, and employee securities, each of a class already admitted; conversions by a resolution authority; and takeover, merger and division securities with a document. The exam material also lists securities already admitted to another regulated market; the Listing Act deleted that exemption on 4 December 2024, and the 18-month route now serves the purpose. Finally, reselling securities first placed under an audience, ticket-size or fungible-securities offer exemption is a new offer, which needs its own exemption or a valid prospectus used with its author's written consent.