Public offers of securities total consideration in the EEA of less than €8m no longer require a prospectus in Germany

The German legislator took advantage of the liberalisation option contained in Article 1 (para 3) and Article 3 (para 2) of Regulation (EU) 2017/1129 (Prospectus Regulation) and stipulated that public offers of securities with a total consideration of less than €8m do not fall under the requirement to publish an approved prospectus. The amount of less than €8m is calculated for a period of twelve months and includes all offers of securities of the particular issuer within the EEA.

To make sure potential investors receive sufficient information to make an informed investment decision, issuers who want to make public offers of securities in a total consideration of less than €8m have to prepare, file and publish a so-called securities information sheet (Wertpapier-Informationsblatt). If the issuer is obliged to prepare a Packaged Retail and Insurance-based Investment Products Key Information Document (PRIIPs KID) the publication of the KID replaces the securities information sheet.

Such information sheet has to be filed with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and published. Publication may only occur upon BaFin’s approval. BaFin has to approve (within 10 working days), if the securities information sheet is complete and in the correct order and the issuer’s and guarantor’s (if any) annual reports are no older than 18 months. BaFin does not check the correctness of the information.

The securities information sheet must not be longer than three DIN A4 pages and has to contain information on the issuer, the guarantor (if any), the securities offered, and the risks attached to issuer, guarantor and securities to the extent listed in section 3a paras 3 et seqq. of the German Securities Prospectus Act (Wertpapierprospektgesetz). The level of information is similar to the prospectus summary and the German product information leaflet (Produktinformationsblatt). The latest annual report (local GAAP is sufficient) of issuer and guarantor (if any) have to be made available to investors upon request.

Issuers have to update their securities information sheet for the duration of the public offer should events occur that would render the securities information sheet materially untrue and, as a consequence, bias the evaluation of the securities offered.