Scope of chapter

This chapter focuses on the new securities law disclosure regime for issuers. The framework for these aspects of issuer disclosure within the EU is provided by the Prospectus Directive, the Transparency Directive, and the Market Abuse Directive. These Directives are supplemented by implementing measures (in EU language, ‘Level 2’ legislation) that contain more detailed, technical rules to amplify the basic concepts provided for in the primary (or ‘Level 1’) legislation.

The Prospectus and Transparency Directives establish the regime for initial disclosure when securities are offered to the public or admitted to trading on a securities market, and for periodic financial disclosures by listed issuers. As complementary measures, they reflect broadly the same basic ideas and concepts, and provide similar responses on some controversial issues.

The Market Abuse Directive deals with timely disclosure of price sensitive information by issuers, as well as with insider dealing and market manipulation more generally. The Market Abuse Directive stands a little apart from the Prospectus and Transparency Directives in its conceptual approach, and it raises its own distinct concerns.

The approach adopted in this chapter is first to examine the Prospectus and Transparency Directives together, starting with some brief background (section B) and then focusing on potentially troubling features of the regime they establish.