Prospectus Supervision: Key Points for 2025

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Update AFM prospectus supervision: key points for 2025 Dear Sir/Madam, The Dutch Authority for the Financial Markets (AFM) is pleased to inform you about some specific points of attention on which our prospectus team will focus in 2025 when assessing (base) prospectuses and supplements. As in previous years, we expect a peak in applications for updating base prospectuses and registration documents in the first months of the year. By sharing these points of attention proactively, we aim to support issuing entities and contribute to a smooth and efficient approval process.

EU Listing Act
Level 1 Amendments
The Prospectus Regulation (EU) 2017/1129 has recently been amended by the EU Listing Act, which entered into force in December 2024. Most of the changes affecting the content of the prospectus are not yet applicable. These changes will be implemented through delegated acts. However, some Level 1 changes that are already in force may affect the content of the prospectus and are therefore relevant to take into account when drafting prospectuses and supplements. Examples of these include: the extension of the minimum withdrawal period from two to three days for supplements or a pricing statement; the provision in Article 23 of the Prospectus Regulation stating that a supplement cannot be used to add a new type of security to a base prospectus; and changes regarding risk factors and the possibility of including future financial information by reference. The last two points are explained further below.

Level 2 Amendments
In late 2024, the consultation period of ESMA on the draft technical advice regarding the Prospectus Regulation and the update of the Delegated Regulation (EU) 2019/979 on metadata was completed. ESMA is expected to publish its final technical advice to the European Commission in the second quarter of 2025, based on the feedback received (link). Subsequently, the European Commission will adopt the amended delegated regulations (EU) 2019/980 and (EU) 2019/979. These changes will enter into force on June 5, 2026, after which prospectuses must comply with the new requirements to be approved. We expect this to have significant implications for the form and content of the prospectus and for the approval procedure. We will provide additional information on this as soon as it is available and necessary.

Risk Factors
The EU Listing Act has also amended Article 16 of the Prospectus Regulation, which concerns risk factors. Important changes include: prospectuses must not contain risk factors that are too general, serve solely as a disclaimer, or do not provide a clear picture of the specific risks investors should be aware of. Furthermore, the order of risk factors within each category must correspond to the issuing entity's assessment of their material relevance.

We wish to emphasize the importance of complying with these changes, as risk factors are an important part of the prospectus for investors, and we notice that issuing entities often struggle with compliance with Article 16 and the ESMA guidelines. Therefore, we will pay extra attention to this when assessing prospectuses. For example, we regularly see risk factors that are not specific enough or where the materiality is not clearly indicated. 'Materiality' refers to the likelihood of a risk occurring and the severity of its negative impact if the risk actually materializes. We also frequently observe that information in the risk factors (including related information elsewhere in the prospectus) is outdated. To avoid comments on this, we advise issuing entities to carefully verify that every risk factor and associated information fully complies with Article 16 and the ESMA guidelines.

No Supplement Required for New Financial Information A relief introduced for issuing entities by the EU Listing Act is that, as of December 4, 2024, a supplement is no longer required to add new annual and interim financial information to a base prospectus. This future financial information can instead be included in the base prospectus by reference. Issuing entities wishing to use this option must include the following in the prospectus in the section on documents by reference:

• Which future financial information is included.
• Which specific parts of financial information are included (if not the entire document).
• The expected publication date.
• A hyperlink to the specific web page where the financial information will be published.
• That the financial information published after the approval date has not been assessed by the AFM during the approval of the prospectus.

European Green Bonds
The European Green Bond Regulation entered into force on December 21, 2024, and introduces uniform standards for the issuance of European Green Bonds, with the aim of improving transparency and preventing greenwashing. The AFM's prospectus team is responsible for supervising compliance with this regulation. Because the assessment of prospectuses with European Green Bonds is new to us, this assessment may take more time than usual. Therefore, we appreciate it if issuing entities wishing to issue European Green Bonds notify us of their plans in good time, including the expected submission date of their prospectus. For practical information regarding the submission and publication of documentation on this matter, we refer to our website: link.

Sustainability
Sustainability remains a priority in capital markets supervision. More information on this can be found in the most recent AFM Market Watch publication (link) and on our website. Additionally, if issuing entities are required to publish a sustainability report under the Corporate Sustainability Reporting Directive (CSRD), we will ensure that this information is consistent with the information in the prospectus.

Information on Artificial Intelligence
We observe that more and more companies are applying artificial intelligence (AI) in their operations. If AI information is included in a prospectus, we wish to emphasize that it is important that its role and impact are clearly explained. This explanation must be objective, concrete, and detailed. Furthermore, AI must not be presented as a positive attribute without adequate substantiation.

Approval Process
We understand that a smooth and efficient approval process is of great importance to issuing entities, and we strive to support this process as best as possible. To ensure a smooth procedure, we appreciate being informed of the desired approval date at the start of the approval request. Timely submission and a high-quality first draft of the prospectus are essential for an efficient assessment. Please note that the approval procedure usually takes at least six weeks.

We hope this information is useful. If you have any questions, please do not hesitate to contact us via service.prospectus@afm.nl.