Review of Prospectus Legislation
I am the Progressive Alliance of Socialists and Democrats Group spokesperson on the review of prospectus legislation. In the coming months, we will draft legislation making it easier for companies - and in particular SMEs - to raise money on the capital market.
Almost all companies that want to raise money from the public need to provide investors with a prospectus. A prospectus is a legal document that describes the company, its main line of business, its finances and shareholding structure. It contains the information an investor needs to have before making a decision whether to invest in the company.
The EU prospectus rules contain a set of disclosures so that investors across the European Union can benefit from the same level of information on companies that want to raise capital. Aligning disclosure standards aims to make it easier to invest cross border.
However, prospectuses can also be costly and burdensome for companies to produce, especially smaller ones, often requiring hundreds of pages of detailed information. For investors, it can prove difficult to wade through very detailed information.
I believe we need a prospectus regime that gives investors the information they need, but does not give rise to unnecessary costs and put companies off raising money on the public markets. We have to strike the right balance to safeguard investors, whilst also making it easier businesses (especially SMEs) to raise money.