Part II The New EU Prospectus Rules, 15 Omission of Information, Incorporation by Reference, Publication, and Language of the Prospectus

Abstract

This chapter considers the topics of omission of information, incorporation by reference, publication, and language of the prospectus. It argues that the reform of the prospectus provisions governing these topics is aimed to facilitate the recourse to capital markets by reducing the costs of a prospectus, without weakening investor protection. The new rules also determine a more efficient coordination of the prospectus regime with other aspects of the EU legal framework for capital markets. Indeed, the Prospectus Regulation allows for prospectus information to be omitted in some cases without the responsible parties being accountable for it, provided that specific requirements are complied with in order to guarantee investor protection. The first type of omission allowed is the incorporation by reference, where the relevant information is not expressly disclosed, but incorporated by reference to one or more documents having certain characteristics. Here, enhancement of the incorporation by reference is a valuable instrument to reduce the administrative and paperwork burdens of drawing up a prospectus, to make the prospectus a more relevant disclosure tool for potential investors, and to achieve more convergence between the EU prospectus and other EU disclosure rules.