EU Prospectus Regulation: Some Out-of-the-Box Thinking

One of the core initiatives of the European Commission’s plan for a Capital Markets Union is its proposal to replace the existing legal framework for public offerings with a new regulation. The new regulation would bring some incremental changes to the existing framework, mainly in the direction of: (a) lowering the burdens for issuers (via broader exemptions for secondary offerings, an attempt to increase the use of shelf registration, and simplified prospectuses for small issuers); and (b) making prospectuses more retail investor-friendly (via shorter summaries and limits on the use of risk factors).