202 5 Equity and Shareholders’ Capital
required to be published, such information must be included in the prospectus or
in a supplement to the prospectus.^306
Contents of the prospectus. The Directive lays down the main rules on the
contents of the prospectus.^307
The prospectus must contain all information which, according to the particular
nature of the issuer and of the securities offered to the public or admitted to
trading on a regulated market, is necessary to enable investors to make an
informed assessment of the assets and liabilities, financial position, profit and
losses, and prospects of the issuer and of any guarantor, and of the rights attaching
to such securities.
This information must be presented in an easily analysable and comprehensible
form.
The prospectus must contain four kinds of information: information concerning
the issuer; information concerning the securities; a summary; and information
about persons responsible.
The prospectus can be a single document or separate documents. Separate
documents consist of three parts: a registration document; a securities note; and a
summary note. There can also be a base prospectus for non-equity securities (for
example, option rights are non-equity securities).^308
The summary contains core information. It should generally not be longer than
2,500 words in its original language.^309 The summary must, in a brief manner and
in non-technical language, convey the essential characteristics and risks associated
with the issuer, any guarantor and the securities, in the language in which the
prospectus was originally drawn up. The summary must also contain several risk
warnings. Rules on the summary belong to the clearest examples of the Prospectus
Directive’s retail orientation.^310
The summary is very important when the same prospectus is used in many
Member States. Rules on the summary are complemented by an issuer-friendly
language regime.^311 In the home Member State, the prospectus must always be
drawn up in a language accepted by the competent authorities of that Member
State. In host Member States, it is sufficient that the prospectus is drawn up “in a
language customary in the sphere of international finance”. In practice, this means
English. The competent authority of each host Member State may then only
require that the summary be translated into its official language(s). This is very
practical, because it would be very difficult and expensive to start translating the
whole prospectus (sometimes hundreds of pages) into the languages of many
Member States.
(^306) Article 15(5) of Directive 2003/71/EC (Prospectus Directive). See Moloney N, EC Se-
curities Law. OUP, Oxford (2008) p 135.
(^307) Articles 5 and 6 of Directive 2003/71/EC (Prospectus Directive).
(^308) Article 5(4) of Directive 2003/71/EC (Prospectus Directive).
(^309) Recital 21 of Directive 2003/71/EC (Prospectus Directive).
(^310) Moloney N, EC Securities Law. OUP, Oxford (2008) pp 144–145.
(^311) For the language regime, see Mattil P, Möslein F, The language of the prospectus: Euro-
peanisation and investor protection, BJIBFL 2008 pp 27–30.