This Regulation shall apply to public offers of securities of a value between ISK 8.4 and 210 million, for which admission to trading on a regulated securities market is not requested.
The maximum and minimum amounts in the first paragraph refer to the total market value of the offer or of offers of securities of the same type during a 12-month period.
The provisions of this Regulation shall not apply to:
1. funds for collective investment intended exclusively to accept funds from members of the public for collective investment in financial instruments and other assets on the basis of spreading risk, in accordance with a previously stated investment strategy, which issue unit share certificates or shares which are redeemable at the owners' demand from the fund's assets;
2. non-equity securities issued by a Member State of the European Economic Area (EEA), regional or local authorities of EEA states, international institutions of which one or more of the states are members, the European Central Bank or central banks of the Member States;
3. central banks in the European Economic Area;
4. securities unconditionally and irrevocably guaranteed by states or regional and local authorities in the EEA;
5. securities issued by legal entities, which are non-profit-making, for the purpose of raising funds to advance their objectives, and which do not concern the financial situation of the legal entity itself;
6. non-equity securities issued in a continuous or repeated manner by credit institutions provided that these securities:
a. are not subordinated, convertible or exchangeable,
b. do not give a right to subscribe to or acquire other types of securities and are not linked to a derivative instrument.
c. materialise reception of repayable deposits,
d. are covered by Act No. 98/1999, on Deposit Guarantees and an Investor-Compensation Scheme.
7. non-equity securities issued in a continuous or repeated manner by credit institutions where the total amount of the offer is less than ISK 210 million, calculated over a 12-month period, provided that these securities:
a. are not subordinated, convertible or exchangeable,
b. do not give a right to subscribe to or acquire other types of securities and are not linked to a derivative instrument.
An issuer or offerer covered by the provisions of Points 2, 4 or 7 of the third paragraph, may prepare a prospectus as provided for in this Chapter.
Amounts in this Chapter are linked to the EUR amounts based on the exchange rate on 4 January 2005 (ISK 83.54).
Definitions in the second paragraph of Art. 2 and Art. 21 of the Act on Securities Transactions, No. 33/2003, as subsequently amended, and in the Regulation on Public Offers of Securities of a Value of ISK 210 million or more and the Listing of Securities on a Regulated Securities Exchange, No. 242/2006, shall apply in this Regulation.
Exempt from the provisions of this Regulation are offers where one or more of the following apply:
a. securities are only offered to professional clients, according to the definition of Point 7 of Art. 2 of the Act on Securities Transactions, No. 33/2003, as subsequently amended;
b. securities are offered to fewer than 100 parties, other than professional clients, in each EEA state;
c. each investor contributes at least ISK 4.2 million to purchase the securities in each offer;
d. each unit of the securities issued has a nominal value of at least ISK 4.2 million.
If securities are marketed and/or sold through the intermediation of a financial undertaking and the exception provisions in subparagraphs a-e do not apply, a prospectus as provided for in this Regulation must be published.
Exempt from the provisions of this Regulation are public offers of securities of the following types:
a. shares issued in substitution for previously issued shares of the same class, if the issuing of such new shares does not result in any increase in the issued capital;
b. securities offered in connection with a takeover, provided that a document is available regarded by the Financial Supervisory Authority as equivalent to a prospectus;
c. securities offered, allotted or to be allotted in connection with a merger, provided that a document is available regarded by the Financial Supervisory Authority as equivalent to a prospectus;
d. shares offered, allotted or to be allotted to existing shareholders without charge and dividends paid out in the form of shares, provided that the shares are of the same class as those shares for which dividends are paid. A document must be available containing information on the number and nature of the aforementioned shares and the reasons for and details of the offer;
e. securities offered, allotted or to be allotted to existing or former employees or Directors of companies by their employer or a company connected to this employer, provided that the above-mentioned securities are in the same class as securities already listed on the same regulated securities market. A document must be available containing information on the number and nature of the aforementioned securities and the reasons for and details of the offer.
Obligation to prepare a prospectus
A public offer of securities of a value between ISK 8.4 million and 210 million, for which admission to trading on a regulated securities market is not requested, is subject to the issuance of a prospectus in accordance with the provisions of this Regulation.
Responsibility for the prospectus
Responsibility for the information provided in the prospectus rests at least with the issuer or its directors, its executive or regulatory board, offerer or guarantor, as applicable.
The parties responsible shall be specified clearly in the prospectus by name and position or, in the case of a legal entity, by name and registered office. In addition, they must include a statement to the effect that according to their best knowledge the information in the prospectus accords with the facts and that no information has been omitted which could be of significance for the reliability of the prospectus.
Information in prospectuses
The prospectus must include such information as is necessary, given the nature of the issuer and the securities, for investors to assess the assets and liabilities, financial situation, performance and future prospects of the issuer and guarantor, as appropriate, as well as the rights conveyed by the securities.
The prospectus must specify in a clear and comprehensible manner at least those aspects listed in the Annex to this Regulation, cf. however, Art. 6.
If information cannot be published in the prospectus on the final offer price and number of securities which will be offered for sale in the public offer, the prospectus must state:
a. the references and/or criteria which will be used to determine the above aspects or, with regard to the offer price, the maximum offer price, or
b. that it will be possible to revoke approval of a purchase of or subscription for securities for at least two working days after information on the final offer price and number of securities to be offered for sale in the public offer has been registered with the Financial Supervisory Authority.
Information on the final offer price and number of securities shall be registered with the Financial Supervisory Authority as soon as possible and, if possible, before the offer commences, and in addition published as provided for in Art. 10.
Exemption from publication of specific information
The Financial Supervisory Authority may grant exemptions from the publication of specific information in a prospectus as referred to in this Regulation if it is of the opinion that:
a. disclosure of such information would be contrary to the public interest;
b. disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead the public with regard to facts and
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circumstances essential for an informed assessment of the issuer, offerer or guarantor, if any, and of the rights attached to the securities to which the prospectus relates;
c. such information is of minor importance only for a specific offer and is not such as will influence the assessment of the financial position and prospects of the issuer, offerer or guarantor, if any.
Supplement to the prospectus
If significant new information, material mistakes or inaccuracy relating to information in a prospectus, which could affect an assessment of the securities, comes to light between the time the prospectus was approved, cf. Art. 9, and until the offer concludes, a supplement to the prospectus shall be prepared accounting for the relevant aspects. The supplement must be approved within seven working days' time and published in the same manner as the original prospectus.
Investors who have already agreed to purchase or subscribe for the securities before the supplement is published shall have the right to cancel their prior agreement for at least two working days following the publication of the supplement.
Validity of the prospectus
A prospectus shall be valid for 12 months from its publication, cf. however, Art. 7.
Co-ordination of a public offer and approval of prospectuses
A financial undertaking authorised to do so by its operating licence must co-ordinate a public offer of securities.
The Financial Supervisory Authority shall oversee approval of prospectuses. The Financial Supervisory Authority may reach an agreement with regulated securities markets to grant approval for prospectuses, cf. Art. 71 of the Act on Securities Transactions, No. 33/2003, as subsequently amended.
A prospectus may not be published until the Financial Supervisory Authority has approved it.
The Financial Supervisory Authority shall inform the issuer or offerer, as appropriate, of its decision concerning approval of the prospectus within ten working days from the time the prospectus is submitted. It shall not, however, be equivalent to approval should the Financial Supervisory Authority fail to announce its decision within the time limit laid down in this paragraph and the fifth paragraph.
The time limit specified in the fourth paragraph shall be extended to 20 working days if an issuer of securities offered for sale in a public offer has no securities listed on a regulated securities market and has not previously offered securities for sale in a public offer.
Should the Financial Supervisory Authority reach the conclusion that the documentation provided is unsatisfactory or that there is need for additional information, the time limits specified in the fourth and fifth paragraphs shall apply from the date the issuer or offerer provides such information.
In those instances referred to in the fourth paragraph, the Financial Supervisory Authority shall inform the issuer within 10 working days of the submission of an application if the documentation provided is unsatisfactory.
Publication of a prospectus
Once a prospectus has been approved it must be registered with the Financial Supervisory Authority and made available to the public by the issuer or offerer. This must be done as promptly as possible, in all cases well in advance of the commencement of the public offer and no later than upon the commencement of the public offer.
A prospectus shall be considered to be available to the public once it has been published:
a. in its entirety in one or more daily newspapers with national distribution or widespread distribution in Iceland, or
b. in printed format and made available to the public without charge at the issuer's registered office and the establishment of any intermediary on the financial market who handles the marketing and/or sale of the securities, including establishments of parties who handle payments for the issuer, or
c. in electronic format on the issuer's website and, if applicable, the website of any intermediary on the financial market who handles the marketing and/or sale of the securities, including the websites of parties who handle payments for the issuer, or
d. in electronic format on the website of the Financial Supervisory Authority.
Issuers who publish their prospectuses in accordance with subparagraph a or b shall also publish them in electronic format as provided for in subparagraph c.
The Financial Supervisory Authority shall publish on its website all approved prospectuses or a list of prospectuses which have been approved during the past 12 months, as provided for in Art. 9, including a hyperlink to the prospectus on the issuer's website as appropriate.
The text and format of the prospectus and/or supplement to it, which is published or made available to the public, must in all cases be identical to that of the original approved by the Financial Supervisory Authority.
If a prospectus is made available to the public in electronic format, the issuer, offerer or financial market intermediaries handling the marketing and/or sale of the securities must nonetheless provide an investor with the prospectus in printed format without charge if the investor so requests.
An announcement must be published of how a prospectus has been made available and where the public may obtain it. The announcement must be published in one or more daily newspapers with national distribution or widespread distribution in Iceland no later than the working day following the publication of the prospectus. The announcement must include the following:
1. the issuer's name;
2. that this is a public offer;
3. the offer period;
4. the type and class of securities;
5. the offer price and number of securities offered for sale, provided that these aspects are known when the prospectus is published;
6. the co-ordinator; and
7. where the prospectus can be obtained.
Any type of advertisement concerning a public offer of securities must fulfil the conditions listed in the second to fifth paragraphs. The provisions of the second to fourth paragraphs, however, only apply to instances where an issuer or offerer is obliged to prepare a prospectus.
Advertisements shall state that a prospectus has been or will be published and where investors can or will be able to obtain the prospectus.
It must be clear that this is an advertisement. Information in the advertisement may be neither imprecise nor misleading. It must also accord with the information provided in the prospectus, if the prospectus has already been published, or the information which is to be included in the prospectus, if the prospectus is to be published later.
All information concerning a public offer of securities which is communicated orally or in writing, even if this is not done for advertising purposes, must without exception accord with the information provided in the prospectus.
If a prospectus does not need to be published, in accordance with the provisions of this Regulation or Chapter IV of the Act on Securities Transactions, No. 33/2003, as subsequently amended, important information which the issuer or offerer provides and is directed at professional clients or specific groups of investors, including information which is communicated in connection with meetings concerning offers of securities, must be communicated to all professional clients or specific groups of investors to whom the offer is directed exclusively. If a prospectus must be published, information communicated in the above manner must be in the prospectus or a supplement to it, in accordance with this Regulation.
The Financial Supervisory Authority shall ensure that advertisements in connection with public offers fulfil the requirements listed in the second to fifth paragraphs.
Prospectuses issued as provided for in this Regulation shall be in Icelandic.
The Financial Supervisory Authority may grant partial or full exemptions from the first paragraph.
Entry into force, etc.
This Regulation, which is set on the authority of the first paragraph of Art. 73 of the Act on Securities Transactions, No. 33/2003, as subsequently amended, shall enter into force immediately.
Minimum requirements concerning information to be included in a prospectus for a public offer of securities of a value between ISK 8.4 million and 210 million, for which admission to trading on a regulated securities market is not requested
To satisfy the obligation laid down in this Regulation, the prospectus must specify clearly and comprehensibly at least the following details, cf. however, Art. 6 of this Regulation:
1. Information on the party or parties responsible for the prospectus
a. name, Id. No. and position of an individual; name, Reg. No. and registered office of a legal entity;
b. a statement to the effect that according to their best knowledge the information in the prospectus accords with the facts and that no information has been omitted which could be of significance for the reliability of the prospectus.
2. Information on the offer and the securities offered for sale:
a. type and class of securities offered for sale, together with a description of their principal characteristics, including the currency, number of securities already issued and the rights they convey;
b. whether the securities are issued in the name of the buyer or are bearer securities and whether they are in de-materialised form or not; the ISIN no. of the securities, if applicable;
c. the total amount of the offer, number of securities offered for sale and nominal value of units;
d. the purpose of the offer, estimated net cash flow to the issuer and information on the proposed disposition of the funds;
e. authorisations for issuance upon which the offer is based, if new securities are being offered for sale;
f. the number and sales value of securities which have already been subscribed for;
g. taxes which are withheld;
h. the offer period;
i. from what date rights to dividends or interest commence;
j. the parties underwriting or guaranteeing the offer;
k. restrictions on transfer of the securities offered for sale and restrictions on the markets on which the securities may be traded;
l. financial undertakings which handle payment for the issuer;
m. the offer price of the securities, if known, or how and when the offer price is to be determined if it is not known when the prospectus is published;
n. the due date for payment of subscriptions and arrangements for payment; costs to be borne by purchasers due to their participation in the offer;
o. how pre-emptive rights are exercised, if applicable;
p. how and by what deadline delivery of the securities is to take place.
3. General information on the offerer:
a. if the offerer is part of a group of companies, its position within that group;
b. where the issuer is registered;
c. date of establishment;
d. the legislation under which [name, Reg. No. and registered office [sic]]
e. the issuer operates and its legal form according to that legislation;
f. issuer's purpose according to its Articles of Association;
g. rights conveyed by shares in the issuer;
h. number of shares issued and classes of shares comprising the issuer's share capital, with a description of their principal characteristics; total number and type of shares which have not yet been fully paid up, with a breakdown if applicable showing to what extent they are paid up;
i. a summary of changes in share capital;
j. information on the largest shareholders and those shareholders who directly or indirectly control or could control the issuer, to the extent the issuer is aware of such;
k. authorisations to increase share capital and their period of validity;
l. the amounts and terms of special loans taken, including convertible or exchangeable bonds or bonds with warrants;
m. the amounts and terms of stock option agreements concluded.
4. Issuer's activities:
a. a description of the issuer's principal activities;
b. the principal risk factors connected to the issuer's activities, a description of all unusual factors which affect or could affect the issuer's activities, as appropriate;
c. patents, licenses or contracts of significance;
d. a summary of investments underway, if significant;
e. legal actions or disputes which could have a significant impact on the issuer's financial position.
5. Assets and liabilities of the issuer, its financial situation and performance
a. annual financial statements for the past two financial years and consolidated statements as appropriate;
b. if the issuer only prepares consolidated financial statements they shall be included in the prospectus;
c. if the issuer prepares both its own annual financial statements and consolidated financial statements both shall be included in the prospectus. However, it is sufficient to include only one set of statements if those omitted do not include additional information of significance;
d. if more than nine months have passed from the end of the financial year covered by the latest annual financial statements, interim financial statements shall be provided which cover at least the next six months after that. If the interim financial statements have not been audited mention must be made of this fact;
e. the name and Id./Reg. No. of the party responsible for auditing the financial statements; and
f. if an auditor has included reservations in its endorsement or refused to endorse the statements mention shall be made thereof and the reasons specified.
6. Issuer's Board of Directors, executive management and regulator:
a. the names, Id. Nos. and titles of directors, managing directors and inspectors;
b. in the case of a public offering of shares in a company with limited liability, the salaries and remuneration to directors, managing directors and parties examining the issuer's accounts shall be stated, with a breakdown by group.
7. Issuer's operations since the end of the last financial period and future prospects:
a. the most significant changes in the issuer's operations since the end of the last financial period, to the extent that such information may affect assessment of the issuer and its securities;
b. the issuer's operating outlook, at least for the current financial year.
When a public offer of bonds is guaranteed by one or more legal entities, the information prescribed in Points 3-7 of Art. 1 of this Annex must also be provided for these guarantors.
When a public offer is made of convertible or exchangeable bonds, bonds with warrants or the warrants themselves, information must also be provided on the nature of such shares or bonds which such rights concern and when and how conversion, exchange or subscription may take place. If the issuer of the shares or bonds is not the same as the issuer of the original bonds or the party granting the warrant, the information prescribed in Points 3-7 of Art. 1 of this Annex must also be provided for the latter party.
If the period since the issuer commenced its operations is shorter than that referred to in Art. 1 of this Annex, information need only be provided for the period since its operations began.
If certain information which is to be specified in a prospectus does not apply to the issuer's field of activity or legal form, or to the securities, the prospectus shall include information which is comparable to the information concerned. If no such comparable information exists, the said requirements concerning information disclosure shall not apply.
B-Section - Date of publication: 1 April 2006