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This page is intended to give you a brief overview of prospectus requirements and their exceptions:
Anyone wishing to offer securities or investments to the public in Germany or Austria in order to raise funds on the capital market generally requires a prospectus approved by the German Federal Financial Supervisory Authority (BaFin) or the Austrian Financial Market Authority (FMA).
The capital market eligibility of the investment instrument is essential for its classification as a security. Securities that are fungible, i.e. interchangeable, are eligible for the capital market. The distinction between fungible and non-fungible financial instruments is made on the basis of whether the investment instrument can be transferred purely under the law of property or whether an assignment under the law of obligations is required. Registered bonds, promissory note loans, GmbH shares and limited partnership shares require a transfer under the law of obligations and are therefore not securities within the meaning of the WpPG (Securities Prospectus Act); shares and bonds, on the other hand, are.
A securities prospectus must be approved by the supervisory authority. This procedure usually takes several weeks and involves relatively high costs.
Within the framework of passporting, the prospectus approved in one EU country can also be given validity in other EU countries.
The EU growth prospectus imposes reduced requirements on the issuer with regard to the scope of the prospectus. However, this fact can only be invoked Dieser Tatbestand kann jedoch nur in Anspruch genommen werden
Privileged companies within the meaning of the Prospectus Regulation (EU 2017/1129) are in particular SMEs (as well as other exemptions). The EU Growth Prospectus is also eligible for passporting.
A securities information sheet may not exceed 3 A4 pages and must be approved by the competent supervisory authority. It is only valid in the country in which it was permitted (no passporting). A maximum issue volume of € 8,000,000 may be issued.
If the issue volume is less than €1,000,000, the issuer privilege applies. This means that the issuer may distribute its own securities itself without requiring a license. The amount that he may raise per investor is not subject to any limit.
From an issue volume of €1,000,000 to €8,000,000, the issuer may not offer its securities to non-qualified investors itself. It is obliged to use the services of a securities institution with a license pursuant to § 15 WpIG (Securities Institutions Act) or § 32 KWG (German Banking Act).
Furthermore, the individual investment thresholds must be observed for an issue volume of € 1,000,000 or more. Without submitting a further declaration, an investor may invest a maximum of €1,000. By submitting certain declarations regarding his freely disposable assets or monthly net income, a maximum of € 25,000 may be raised per investor.
If the offer is directed exclusively at qualified investors, it is not subject to the prospectus requirement. Qualified investors are, in particular, professional clients and eligible counterparties pursuant to Section 67 WpHG (German Securities Trading Act). However, the issuer must comply with the notification requirements for material information (Section 15 (5) WpPG).
The capital market eligibility of the investment instrument is essential for its classification as a security. Securities that are fungible, i.e. interchangeable, are eligible for the capital market. The distinction between fungible and non-fungible financial instruments is made on the basis of whether the investment instrument can be transferred purely under the law of property or whether an assignment under the law of obligations is required. Registered bonds, promissory note loans, GmbH shares and limited partnership shares require a transfer under the law of obligations and are therefore not securities within the meaning of the WpPG (Securities Prospectus Act); shares and bonds, on the other hand, are.
A securities prospectus must be approved by the supervisory authority. This procedure usually takes several weeks and involves relatively high costs.
Within the framework of passporting, the prospectus approved in one EU country can also be given validity in other EU countries.
The offer notice may only be accessible to a maximum of 149 persons per Member State. This exception cannot be claimed by arbitrarily dividing an offer into several parts, each addressed to 149 persons. Nor does the exception apply if “by chance” only 149 persons subscribe.
If the securities offered can only be acquired for a minimum amount of €100,000 per offering, the prospectus requirement does not apply. The securities must therefore have a minimum denomination of €100,000, or the selling price of all securities offered over a 12-month period in the European Economic Area must be less than €100,000. The upper limit applies to the respective issue, not to the total sum of all offers of an issuer.
Other exceptions related to the type of transaction (Art. 1(4e) to (J) (EU) 2017/1129) also exist.
An asset information sheet may not exceed 3 DIN-A pages. It must be approved by the competent supervisory authority. The public offering of such investments may only take place via crowdfunding platforms; here, too, restrictions apply with regard to the maximum amounts that can be subscribed to by investors.
A maximum of up to €2.5 million from the same issuer and provider may be raised for asset investments via crowdfunding. This exemption is only applicable to asset investments that are exclusively brokered by way of investment advice or investment brokerage via an internet service platform, which is obliged to check whether the total amount of asset investments of the same issuer as well as the individual investment thresholds per investor are complied with. Accordingly, an investor can invest a maximum of €1000 without further explanation, and a maximum of €10,000 with further explanation of his financial circumstances.
Asset investments pursuant to Section 1 VermAnlG (German Asset Investment Act) are also generally subject to a prospectus requirement. This includes
Provided that no more than 20 units of the same investment are offered on the capital market, a sales prospectus approved by the competent supervisory authority or a permitted investment information sheet is not required. The offer must be limited to a maximum of 20 units from the outset.
Accordingly, it is possible – also in parallel – to offer, for example, 20 shares in a subordinated loan, 20 shares in a participating loan, 20 direct investments, 20 restricted, uncertificated profit participation certificates, 20 dormant partnership interests and 20 registered bonds without a prospectus.
Investments of any kind may also be offered without a prospectus if it is clear from the outset that each unit will be offered at a price of at least €200,000 per investor.
Other exceptions related to the type of transaction (Art. 1(4e) to (J) (EU) 2017/1129) also exist.
If the total value of all shares in an investment does not exceed €100,000 within 12 months, no prospectus is required either.
Loans secured by real estate may also be offered without a prospectus. Certain collateral excludes the definition of deposit business and thus the scope of application of the German Banking Act (KWG). In principle, however, only bank guarantees, sureties, first-ranking land charges or the promise of a credit institution licensed to do business in Germany or an insurance company can be considered.
The supervisory authorities place high demands on the creation of land charges and the way in which this security is granted to the investor.
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