Approval of securities prospectuses
In their marketing activities, issuers of securities prospectuses sometimes give the impression that securities prospectuses or their products are endorsed and supervised by the Financial Market Authority. In the following, the FMA describes the scope of its activities with regard to securities prospectuses.
What is a securities prospectus, what information does it contain, and what is its purpose?
In principle, a public offer of securities may take place in Liechtenstein only if the offeror (issuer) has published an endorsed securities prospectus beforehand which must comply with the requirements of the Law implementing Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (EEA Securities Prospectus Implementation Act; EWR-WPPDG) and Regulation (EU) 2017/1129. The securities prospectus must contain information about the issuer and the securities with the aim of enabling the public to make an accurate assessment of the assets and liabilities, financial position, profits and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities. It therefore serves as an information document and in particular as the basis for an investment decision and hence investor protection. It forms the basis for responsibility attaching to the prospectus. The securities prospectus must be submitted to the FMA for endorsement prior to its publication.
What is the legal requirement for a securities prospectus to be valid?
To be valid, a securities prospectus must be endorsed by the FMA and published with legal effect.
What does "approval" mean? What does the FMA scrutinise, and on what legal basis?
In accordance with the requirements of the WPPG and the EU Prospectus Ordinance, securities prospectuses are scrutinised by the FMA exclusively with respect to their completeness, consistency, and comprehensibility in the sense of a reconciliation with the content requirements harmonised under European law. Endorsement is the positive outcome conferred by the FMA upon completion of the scrutiny of the securities prospectus with respect to completeness, consistency, and comprehensibility. The securities prospectus may then be published.
What does the FMA not do?
The endorsement of the prospectus by the FMA is not a product approval. The FMA does not verify the correctness of the information in a securities prospectus, in particular the promised characteristics or the business model. The issuer is liable for the correctness of the information provided in a securities prospectus; a declaration of assumption of responsibility to that effect must be included in the securities prospectus. Subject to other relevant laws, the issuer does not require a license from the FMA to carry out its activities. No examination of the issuer is therefore performed, and the issuer is accordingly also not subject to prudential supervision.
Why is the endorsement limited in time?
A securities prospectus is valid for only 12 months after its endorsement. This serves to protect investors by avoiding outdated information.
What are the risks and where is information available about them?
Every investment in securities entails certain risks. The risk factors specific to the issuer or the line of business must be clearly disclosed in the prospectus. As a rule, the risk factors are subdivided as follows: market risks, company-specific risks, legal and tax risks, risks with regard to the regulatory environment, risks in connection with the offer. In the case of investments that are subject to the risk of a total loss, this circumstance must also be clearly pointed out.