Prospectuses
Laws and regulations governing public offerings and admission of securities to trading
Rules regarding public offerings and the admission of securities to trading can be found in Act no. 14/2020 (Icelandic) on Prospectuses for Public Offering or Admission to Trading on a Regulated Market. This Act implemented Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC. A more detailed version of the regulation can be found in Commission Delegated Regulation (EU) 2019/980 which was implemented with Regulation 274/2020 (Icelandic), on the implementation of the Commission Delegated Regulation (EU) regarding the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and also Commission Delegated Regulation (EU) 2019/979, as amended by Commission Delegated Regulation (EU) 2020/1272, which was implemented by rules no. 1590/2021 (Icelandic), on Key Financial Information in the Summary of a securities Prospectus, the Publication and Classification of Prospectuses, Advertisements for Securities, Supplements to a Prospectus, the Notification Portal, and Notification of a Public Offering.
The Central Bank of Iceland adheres to the following ESMA (European Securities and Markets Authority) guidelines:
The above rules assume in most cases that the first step in a public offering and admission of securities to trading in a regulated securities market is to obtain a confirmation of the prospectus from the Central Bank of Iceland. The Central Bank of Iceland recommends that parties interested in conducting a public offering or having their securities admitted to trading on a regulated securities market familiarise themselves with these rules to obtain the necessary information and thereby speed up the process of the application in question.
Certain requirements apply with regard to the minimum information for a specific document that must be published due to an exemption from a prospectus in connection with a takeover by swap auction, merger or unbundling, cf. Regulation 1515/2021 (Icelandic), which implemented Commission Delegated Regulation (EU) 2021/528.
Exemptions from the obligation to publish a prospectus
There is no need to issue a prospectus in cases where there is a public offering of securities where the total amount of the offering over a 12-month period is less than the equivalent of EUR 7,999,999 in Icelandic krónur, provided that there is no intention to admit the securities to trading on a regulated market.
Special attention is drawn to the fact that the Central Bank must be notified in the case of a public offering of securities when its value is in the range of EUR 1,000,000-7,999,999.The notification shall be sent to the Central Bank two weeks before the scheduled auction, cf. Article 3 of Regulation no. 1590/2021 (Icelandic) on the Key Financial Information in the Summary of a Prospectus, the Publication and Classification of Prospectuses, Advertisements for Securities, Supplements to a Prospectus, the Notification Portal, and Notification of a Public Offering.
Qualified investors
Issuers are not obliged to issue a prospectus if the auction is exclusively for qualified investors. The definition of qualified investors is intended to distinguish those parties who are generally considered to have sufficient knowledge and experience to be able to participate in auctions without a specific prospectus, but it can be found in Article 2 (e) of Regulation (EU) 2017/1129 of the European Parliament and of the Council on a prospectus to be published when a public offering of securities is called or they are admitted to trading on a regulated market and repealing Directive 2003/71/EC.
Financial undertakings maintain a list of qualified investors.