New Prospectus Regulation: AFME publishes revised equity selling restrictions

The Association for Financial Markets in Europe (AFME) has published a revised version of its equity selling restrictions to reflect the application in full of the new Prospectus Regulation (EU 2017/1129) on 21 July 2019.

The revised version has been updated to refer to the Prospectus Regulation instead of the Prospectus Directive and to reflect the fact that the Regulation is directly applicable in Member States and does not need implementing at national level. It comprises of:

• an EEA equity selling restriction (with separate versions for insertion into transaction contracts, eg underwriting agreements and prospectuses), and
• a selling restriction addressing additional United Kingdom securities laws (for insertion into transaction contracts.)

The selling restrictions speak as of 21 July 2019, at which point the UK remains an EU Member State. As such, AFME has confirmed that it may need to update the selling restrictions when the exact timing and nature of the UK’s proposed withdrawal from the EU becomes certain.

The wording that AFME prepared in preparation for the UK’s anticipated withdrawal from the EU on 29 March 2019 is still available on the AFME website. It sets out the selling restrictions for equity transactions for use following a no-deal Brexit or a Brexit with a deal/transitional period. If necessary, this will also be updated closer to 31 October 2019.