Debt programme updates/establishments and the amended Prospectus Directive (PD) regime
By now most debt programmes will have been updated to be compliant with the requirements of the amended PD regime. However, as highlighted in previous editions of this note, there continue to be some inconsistencies in the approach taken by the competent authorities when interpreting some of the amended requirements.
The requirements in relation to the content of Final Terms, Summaries, Supplements and the approach to disclosure relating to notes which fall outside the scope of the PD (because they are neither admitted to trading on a regulated market in the EEA nor offered to the public in the EEA on a non-exempt basis) continue to generate competent authority comments.
Whilst there has been some competent authority guidance on certain aspects of PD disclosure, including: (i) the UKLA's Primary Market Bulletin No 7 which, among other things, sets out the UKLA's approach to Supplements and a lighter touch "wholesale debt approach" together with finalised Technical Notes relating to Final Terms; and (ii) ESMA's Final Report on draft Regulatory Technical Standards relating to Supplements, uncertainty surrounding many requirements looks set to continue. Recent experience suggests that the UKLA's wholesale debt approach should result in fewer comments from the UKLA on wholesale base prospectuses for all issuers (other than UK high street bank issuers) of "vanilla" debt securities under programmes however, further guidance is required (and is expected in the coming months) on its approach to non-equity retail prospectuses. The European Commission has also yet to endorse ESMA's draft Regulatory Technical Standards on Supplements.
Issuers must therefore continue to anticipate, and be prepared for, several rounds of comments from competent authorities during the base prospectus update process resulting in extended timeframes for approval.