Part II The New EU Prospectus Rules, 8 The Contents of the Prospectus: Rules for Financial Information

Abstract

This chapter focuses on the financial information to be included in a prospectus. It argues that as far as financial information is concerned, the new EU prospectus regime is in line with the objectives of the European Commission to reduce the administrative burden for issuers when drawing up a prospectus, and to make the prospectus a more relevant disclosure tool for potential investors. Nevertheless, in spite of such simplifications, it remains that financial information is one of the most technical elements of the prospectus contents and, as such, is primarily addressed to sophisticated investors. In particular, pro forma financial information and profit estimates and forecast are deemed to be of limited usefulness for unsophisticated investors. Therefore, in this regard, it is particularly important that (as recommended by the European Commission) the information included in the prospectus summary and primarily addressed to retail investors should not be a mere compilation of excerpts from the prospectus.