Regulatory Alerts2021-08-17
Scrutiny of Securities Prospectuses for Comprehensibility
BaFin issued this guidance notice to clarify how German regulators apply new EU requirements for scrutinizing the comprehensibility of securities prospectuses under the July 2019 Prospectus Regulation. The notice mandates that competent authorities evaluate draft prospectuses against specific criteria, including clear tables of contents, plain language, logical structuring, and unambiguous product descriptions. Issuers must avoid overly modular or excessively detailed designs that hinder investor understanding, as failure to meet these comprehensibility standards can result in prospectus approval being refused.
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