As of last week (20 July), an issuer with securities admitted to trading on a regulated market may admit further securities without a prospectus as long as they represent less than 20% of the same class of security (calculated over a 12-month period). This is higher than the old 10%.

A similar 20% limit applies to shares to be admitted to trading on a regulated market where those shares result from the conversion or exchange of other securities. There used to be no limit.

From July 2018 onwards, no prospectus will be necessary for capital 'raisings' Regulation.

For offers to the public or the admission to trading of securities in connection with a takeover, merger or division, the current requirement for a document "equivalent" to a prospectus will be simplified.

In its draft form the regulation contained a proposal to increase the number of people to whom an offer may be made before a prospectus is necessary. This has not come to pass and the figure therefore remains at fewer than 150 natural or legal persons per member state, other than qualified investors.

The Financial Conduct Authority has already set out its proposals to update its prospectus rules in advance of those provisions of the regulation that came into force last week.

By July 2019 the UK will, on the current Brexit timetable, have already left the EU and the regulation will no longer apply directly. However, HM Government might put equivalent rules in place.

* David Collins can be reached on +44 20 7246 7597, Richard Barham is on +44 20 7246 7109 and Candice Chapman is on +44 20 7246 7141