2023-05-09
To the attention of market participants intending to make public offerings of medium-sized issues of securities (with a total consideration of €1-8 million within 12 months): the Bank of Lithuania hereby submits for your comments a draft template of the general information document proposed in the Baltic states.
The Capital Market Development Guidelines aim to set proportionate disclosure requirements in the information document, increase access to capital markets (including opportunities for SMEs) and harmonise the national public offering requirements for such issues in the Baltic states (Lithuania, Latvia and Estonia).
A working group of experts from the three countries has prepared relevant drafts, which have been submitted for further comments from interested market participants. Once implemented, these proposals are expected to enable companies to raise the necessary funds for their activities on the Baltic capital markets at a lower cost and faster through public issues of securities.
The financial market regulators of the Baltic states have agreed to remove the current divergences in their national public offering requirements and to harmonise the applicable requirements for public issues with total consideration €1-8 million within 12 months.
In order to create a level playing field for Lithuanian, Latvian and Estonian companies that wish to offer securities to the public, it has been decided to:
- Harmonise the threshold at which the obligation to draw up a prospectus arises under Article 3(2) of Regulation (EU) 2017/1129 of the European Parliament and of the Council on the prospectus. To this end, the Estonian Ministry of Finance is drafting relevant legislative amendments to raise the threshold from the current level of €5 million to €8 million.
- Aim to waive the mandatory requirement for financial statement audits for public offerings of bonds by private limited liability companies established in Lithuania, as set out in Article 55(12-13) of the Republic of Lithuania Law on Companies, where this is not required under the Republic of Lithuania Law on Financial Reporting by Undertakings. This amendment would allow private limited liability companies (UAB), which are exempted from the obligation to have their financial statements audited according to the criteria set out in Article 4 of the Law on Financial Reporting by Undertakings, to offer their bonds to the public without the additional costs of a mandatory audit of their financial statements. To this end, the Bank of Lithuania, together with the Ministry of Finance of the Republic of Lithuania, has drafted amendments to the Law on Companies.
- Waive the requirement under the Latvian legislation to obtain, before making a public offering of securities with total consideration between €1 million and €8 million within 12 months, an approval of the draft information document from the Latvian financial market supervisory authority. In order to harmonise the legal framework, relevant amendments to the Latvian legislation are being drafted that would waive this requirement.
- Set out the general content requirements for the information document and the main general requirements for securities offerings (documents – Annexes 1 and 2).
Please submit your comments by 19 May 2023 (please send them by email to tl.bl@aruizeirp). After receiving comments from capital market participants of all three Baltic states, assessing them and agreeing on a common text, the respective competent authorities of the Baltic states will initiate formal legislative procedures, including public consultations on draft legislation.
Annex 1 (108.9 KB download icon)
Annex 2 (57.7 KB download icon)