Hoppa yfir valmynd
Ministry of Industries and Innovation

Regulation No. 242/2006 on Public Offers of securities of a value of ISK 210 million and the admission of securities to a regulated market

CHAPTER I
Article 1
Scope
This regulation shall apply to public offers of securities of a value of ISK 210 million or more and the admission of securities to a regulated market; cf. Chapter IV of Act No. 33/2003 on Securities Transactions, with subsequent amendments.
The financial limit laid down in Article 1 refers to the total market capitalisation of the offer or offers of securities of the same class over a period of 12 months.
CHAPTER II
Article 2
Definitions
1. Securities issued in a continuous or repeated manner: Series of securities issues or at least two separate issues of securities of a similar type and/or class over a period of 12 months.
2. Home State:
i) for all issuers of securities within the European Economic Area, which are not mentioned in (ii), the Home State within the European Economic Area where the issuer has its registered office,
ii) for any issue of non-equity securities,
a) whose denomination per unit amounts to at least ISK 83.000, or
b) give the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred to them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer, the Home State within the European Economic Area where the issuer has its registered office, or where the securities were or are to be admitted to trading on a regulated market or where the securities are offered to the public, at the choice of the issuer, the offeror or the person asking to be admitted to trading on regulated securities market, as the case may be,
iii) for all issuers of securities with offices registered outside the European Economic Area, which are not mentioned in (ii), the Home State is the state within the European Economic Area where the securities are intended to be offered to the public for the first time after 31 December 2003, or where the first application for admission to trading on a regulated securities market is made.
Pursuant to (iii) the Home State is chosen by the issuer, offeror or the person asking to be admitted to trading on a regulated securities market, as the case may be. If a Home State, pursuant to (iii), is not chosen by the issuer, the issuer shall attest the choice.
Issuers with offices registered outside the European Economic Area already admitted for trading on a regulated securities market shall choose the competent authority, pursuant to Article 1(iii). The Financial Supervisory Authority shall be notified no later than 1 June 2006 if Iceland is chosen as a Home State.
3. Host State: means the State where an offer to the public is made or admission to trading on a regulated securities market is sought, when different from the Home State, pursuant to sub-paragraph 2.
4. Offeror: Legal entity, which offers securities to the public.
5. Approval: means the positive act at the outcome of the scrutiny of the completeness of the prospectus, including the consistency of the information given and its comprehensibility.
Financial data in this regulation is exchange rate specific as of 4 January 2005, when the exchange rate of the euro (EUR) was ISK 83,54.
CHAPTER III
Article 3
Responsibility attaching to the prospectus
Responsibility for the information given in a prospectus attaches at least to the issuer or its administrative, management or supervisory bodies, the offeror, the person asking for admission to trading on a regulated market or the guarantor, as the case may be.
The persons responsible shall be clearly identified in the prospectus by their name and functions or, in the case of legal persons, their names and registered offices, as well as declarations by them that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import.
No civil liability shall attach to any person, according to applicable general rules, solely on the basis of the summary, including any translation, unless the summary is misleading, inaccurate or or inconsistent when read together with the other parts of the prospectus.
CHAPTER IV
Article 4
The prospectus
The prospectus shall contain information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market. It shall also include a brief and informative summary, which conveys the essential characteristics and risks associated with the issuer, any guarantor, if applicable, and the securities. The summary shall be written in the language in which the prospectus was originally drawn up.
The summary shall note in particular that:
a) it should be read as an introduction to the prospectus,
b) any decision to invest in the securities should be based on consideration of the prospectus as a whole,
c) where a claim relating to information contained in a prospectus is brought before a court, the plaintiff investor might have to bear the costs of translating the prospectus before the legal proceedings are initiated, and
d) according to applicable general rules, civil liability attaches to those persons or legal persons who have tabled the summary, including any translation, and applied for its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus.
Article 5
Minimum information
A prospectus shall comply with the provisions of Chapter IV of Act No. 33/2003 on Securities Transactions, with subsequent amendments, the provisions of this regulation and the provisions of Commission Regulation (EC) No 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements, and specify in clear and explicit terms at least the points set out in the Annexes to Commission Regulation (EC) No 809/2004.
Where the final offer price and amount of securities, which will be offered to the public, cannot be included the prospectus, the prospectus or the base prospectus shall disclose:
a) the criteria and/or the conditions in accordance with which the above elements will be determined or, in the case of the offer price, the maximum price, or
b) that the acceptances of purchase or subscription of securities may be withdrawn for not less than two working days after the final offer price and amount of securities which will be offered to the public have been filed with the Financial Supervisory Authority.
The final offer price and amount of securities shall be filed with the Financial Supervisory Authority and published in accordance with Article 8.
Where certain information required to be included in the prospectus is inappropriate to the issuer's sphere of activity or to the legal form of the issuer or to the securities, the prospectus shall contain information relevant to the required information. This requirement does not apply when no such relevant information exists.
Article 6
Incorporation by reference
Information may be incorporated in the prospectus by reference to one or more previously or simultaneously published documents that have been approved by or filed with the Financial Supervisory Authority or published on the basis of disclosure requirements arising from admission to trading on a regulated securities market. This information shall be the latest available to the issuer. The summary shall not incorporate information by reference. When information is incorporated by reference, a cross-reference list must be provided in order to enable investors to identify easily specific items of information.
Article 7
Approval of the prospectus
No prospectus shall be published until it has been approved by the Financial Supervisory Authority. The Financial Supervisory Authority shall notify the issuer, the offeror or person asking for admission to trading on a regulated securities market, as the case may be, of its decision regarding the approval of the prospectus within 10 working days of the submission of the draft prospectus. If the Financial Supervisory Authority fails to give a decision on the prospectus within the time limits laid down in in this paragraph and paragraph 3, this shall not be deemed to constitute approval of the application.
The time limit referred to in paragraph 2 shall be extended to 20 working days if the public offer involves securities issued by an issuer which does not have any securities admitted to trading on a regulated market and who has not previously offered securities to the public.
If the Financial Supervisory Authority finds that the documents submitted are incomplete or that supplementary information is needed, the time limits referred to in paragraphs 2 and 3 shall apply only from the date on which such information is provided by the issuer, offeror or the person asking for admission to trading on a regulated market.
In the case referred to in paragraph 2 the Financial Supervisory Authority should notify the issuer if the documents are incomplete within 10 working days of the submission of the application.
The Financial Supervisory Authority may transfer the approval of a prospectus to the competent authority of another State within the European Economic Area, subject to the agreement of that authority.
The Financial Supervisory Authority shall notify this transfer to the issuer, the offeror or the person asking for admission to trading on a regulated market within three working days from the date of the decision. The time limit referred to in paragraph 2 shall apply from that date.
Article 8
Publication of the prospectus
Once approved, the prospectus shall be filed with the Financial Supervisory Authority and shall be made available to the public by the issuer, offeror or person asking for admission to trading on a regulated market. This shall be done as soon as practicable and in any case, at a reasonable time in advance of, and at the latest at the beginning of, the offer to the public or the admission to trading of the securities involved. In the case of an initial public offer of a class of shares not already admitted to trading on a regulated market that is to be admitted to trading for the first time, the prospectus shall be available at least six working days before the end of the offer.
The prospectus shall be deemed available to the public when published either:
a) by insertion in one or more newspapers circulated throughout, or widely circulated in Iceland if an offer to the public is made or the admission to trading is sought in Iceland; or
b) in a printed form to be made available, free of charge, to the public at the offices of the market on which the securities are being admitted to trading, or at the registered office of the issuer and at the offices of the financial intermediaries placing or selling the securities, including paying agents; or
c) in an electronic form on the issuer's website and, if applicable, on the website of the financial intermediaries placing or selling the securities, including paying agents; or
d) in an electronic form on the website of the regulated market where the admission to trading is sought; or
e) in electronic form on the website of the Financial Supervisory Authority.
Issuers, which publish their prospectus in accordance with (a) or (b) are also required to publish their prospectus in an electronic form in accordance with (c).
A notice shall be published stating how the prospectus has been made available and where it can be obtained by the public. The notice shall be published by insertion in one or more newspapers circulated throughout, or widely circulated in Iceland at the latest on the next working day following the publication of the prospectus.
The Financial Supervisory Authority shall publish on its website over a period of 12 months, at its choice, all the prospectuses approved, or at least the list of prospectuses approved in accordance with Article 7, including, if applicable, a hyperlink to the prospectus published on the website of the issuer, or on the website of the regulated market.
In the case of a prospectus comprising several documents and/or incorporating information by reference, the documents and information making up the prospectus may be published and circulated separately provided that the said documents are made available, free of charge, to the public, in accordance with the arrangements established in paragraph 2. Each document shall indicate where the other constituent documents of the full prospectus may be obtained.
The text and the format of the prospectus, and/or the supplements to the prospectus, published or made available to the public, shall at all times be identical to the original version approved by the Financial Supervisory Authority or the competent authority of the Home State.
Where the prospectus is made available by publication in electronic form, a paper copy must nevertheless be delivered to the investor, upon his request and free of charge, by the issuer, the offeror, the person asking for admission to trading or the financial intermediaries placing or selling the securities.
Article 9
Advertisements
Any type of advertisements relating either to an offer to the public of securities or to an admission to trading on a regulated market shall observe the principles contained in paragraphs 2 to 5. Paragraphs 2 to 4 shall apply only to cases where the issuer, the offeror or the person applying for admission to trading is covered by the obligation to draw up a prospectus.
Advertisements shall state that a prospectus has been or will be published and indicate where investors are or will be able to obtain it.
Advertisements shall be clearly recognisable as such. The information contained in an advertisement shall not be inaccurate, or misleading. This information shall also be consistent with the information contained in the prospectus, if already published, or with the information required to be in the prospectus, if the prospectus is published afterwards.
In any case, all information concerning the offer to the public or the admission to trading on a regulated market disclosed in an oral or written form, even if not for advertising purposes, shall be consistent with that contained in the prospectus.
No. 242 23 March 2006
When according to Chapter IV of Act No. 33/2003 on Securities Transactions, with subsequent amendments, no prospectus is required, material information provided by an issuer or an offeror and addressed to qualified investors or special categories of investors, including information disclosed in the context of meetings relating to offers of securities, shall be disclosed to all qualified investors or special categories of investors to whom the offer is exclusively addressed. Where a prospectus is required to be published, such information shall be included in the prospectus or in a supplement to the prospectus in accordance with Article 24 of Act No. 33/2003 on Securities Transactions, with subsequent amendments.
The Financial Supervisory Authority shall have the power to exercise control over the compliance of advertising activity, relating to a public offer of securities or an admission to trading on a regulated market, with the principles referred to in paragraphs 2 to 5.
Article 10
Prospectuses approved by other competent authorities
within the European Economic Area
Without prejudice to Article 14, the Financial Supervisory Authority shall approve prospectuses approved by competent authorities within the European Economic Area and any supplements thereto, provided that that requirements of notification have been satisfied in accordance with Article 11. The Financial Supervisory Authority shall not undertake any approval or administrative procedures relating to such prospectuses.
If there are significant new factors, material mistakes or inaccuracies arising since the approval of the prospectus, the Financial Supervisory Authority may draw the attention of the competent authority of the Home State to the need for any new information.
Article 11
Notification
The Financial Supervisory Authority shall, at the request of the issuer or the person responsible fordrawing up the prospectus provide the competent authority of the Host State with a certificate of approval attesting that the prospectus has been drawn up in accordance with requirements made within the European Economic Area and with a copy of the said prospectus. Documentation shall be provided within three working days following that request. If the request is submitted together with the draft prospectus, documentation shall be provided within one working day after the approval of the prospectus. If applicable, this notification shall be accompanied by a translation of the summary produced under the responsibility of the issuer or person responsible for drawing up the prospectus. The same procedure shall be followed for any supplement to the prospectus. The constituent documents have to be available in order to enable the Financial Supervisory Authority to approve prospectuses approved by competent authorities within the European Economic Area and any supplements thereto, cf. Article 10.
Where certain information required to be included in the prospectus is inappropriate according to Article 5(4) of this regulation or exemptions are granted according to Article 23(4) of Act No. 33/2003 on Securities Transactions, with subsequent amendments, the application of those provisions shall be stated in the certificate, as well as its justification.
Article 12
Use of languages
The following rules are applicable to use of languages in a prospectus, as applicable:
1) Where an offer to the public is made or admission to trading on a regulated market is sought only in Iceland and Iceland is the Home State, the prospectus shall be drawn up in Icelandic or a language accepted by the Financial Supervisory Authority.
2) Where an offer to the public is made or admission totrading on a regulated market is sought in more than one State within the European Economic Area, with the exception of Iceland as a Home State, theprospectus shall be drawn up in a language accepted by the competent authority concerned and shall also be made available either in a language accepted by the competent authorities of each State or in English, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be. In order to enable the Financial Supervisory Authority to approve a prospectus, it shall either be drawn up in a language accepted by theFinancial Supervisory Authority or in English, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be.
3) Where an offer to the public is made or admission to trading on a regulated market is sought in more than one State within the European Economic Area, including Iceland and Iceland is the Home State, the prospectus shall be drawn up in a language accepted by the Financial Supervisory Authority and shall also be made available either in a language accepted by the competent authorities of Host State or in English, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be.
4) Where an offer to the public is made or admission to trading on a regulated market is sought in Iceland and Iceland is Host State, the prospectus shall be drawn up in a language accepted by the Financial Supervisory Authority or in English, at the choice of the issuer, offeror, or person asking for admission to trading, as the case may be. The Financial Supervisory Authority may require that the summary be translated into Icelandic.
5) Where admission to trading on a regulated market of non-equity securities whose denomination per unit amounts to at least ISK 4.2 million is sought in one or more States within the European Economic Area, the prospectus shall be drawn up either in a language accepted by the competent authorities of the Home and Host States or in English, at the choice of the issuer, offeror or person asking for admission to trading, as the case may be. If a summary is available the Financial Supervisory Authority may not require that it be translated.
Article 13
Issuers incorporated in States outside the European Economic Area
If Iceland is the Home State of issuers having their registered office in a State outside the European Economic Area, the Financial Supervisory Authority may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up in accordance with the legislation of a third country, provided that:
a) the prospectus has been drawn up in accordance with international standards set by international securities commission organisations, including the IOSCO disclosure standards;
b) the information requirements, including information of a financial nature, are equivalent to the requirements under Chapter IV of Act No. 33/2003 on Securities Transactions, with subsequent amendments, and this regulation.
In the case of an offer to the public in Iceland or admission to trading on a regulated market in Iceland of securities issued by an issuer incorporated in a State outside the European Economic Area, and Iceland is not the Home State, the requirements set out in Articles 10, 11 and 12 shall apply.
Article 14
Precautionary measures if Iceland is the Host State
Where the Financial Supervisory Authority finds that irregularities have been committed by the issuer or by the financial institutions in charge of the public offer or that breaches have been committed of the obligations attaching to the issuer by reason of the fact that the securities are admitted to trading on a regulated market, it shall refer these findings to the competent authority of the Home State concerned.
If, despite the measures taken by the competent authority of the Home State concerned or because such measures prove inadequate, the issuer or the financial institution in charge of the public offer persists in breaching the relevant legal or regulatory provisions, the Financial Supervisory Authority, after informing the competent authority of the HomeState, shall take all the appropriate measures in order to protect investors.
Article 15
Entry into force, etc.
This regulation is set out in accordance with the Decision of the EEA Joint Committee to introduce into the EEA Agreement and adopt the provisions of Directive 2003/71/EC of the European Parliament and of the Council on the prospectus when securities are offered to the public or admitted to trading.
This Regulation, set out under the provisions of Article 73(1) of Act No. 33/2003 on Securities Transactions, with subsequent amendments, shall enter into force forthwith. At the same time, Regulation No. 630/2003 on Securities Transactions is repealed.
Interim provisions
Prospectuses may be drawn up, public offers made and securities admitted to a regulated market in accordance with the provisions of Regulation No. 630/2003 on Securities Transactions and Regulation No. 434/1999 on the Listing of Securities on a Regulated Securities Exchange as they were before the entry into force of this Regulation for 3 months following the entry into force of this Regulation.

The Ministry of Commerce, 23 March 2006.
Valgerður Sverrisdóttir
Kristján Skarphéðinsson
________

Official Gazette B-Section – Date of publication: 31 March 2006

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Disclaimer: This section of the site details available translations on legislation relating to the Government Offices in Iceland. In case of any discrepancies between the translations and the original text in Icelandic, the original text as published in the Icelandic Legal Gazette prevails.

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