UK: Amended Prospectus Directive finalised – extended exemption for employee shares schemes

Posted on 12th January, 2010

Estimated reading time 2 minutes

The proposed early enactment into UK law of 2 of the recent amendments to the Prospectus Directive and the expansion of the share schemes exemption to include all EU companies.

On 11 October 2010 the Council of the European Union approved a directive amending the Prospectus Directive.  EU member states have 18 months in which to enact this amending directive however, the UK government announced on 1 November 2010 that it intends to enact 2 of these amendments early.  It will consult on the changes in early 2011.  The 2 amendments are:

  • increasing the limit of exempt offers to €5 million from €2.5 million
  • increasing the number of persons per member state exemption from 100 per member state to 150 per member state

The other amendment to the directive of relevance to share schemes is that the employee share schemes exemption will be available to all companies who have their head or registered offices in the EU and not only to those companies which have securities listed on an EU regulated market.  The UK government is not proposing to fast track this amendment however, but it must still implement the amending directive within 18 months.


The extension of the share schemes exemption to all companies with their head or registered offices in the EU is a welcome amendment to the Prospectus Directive.  It should make it simpler, and less expensive, for EU companies to introduce share schemes.

It is possible for companies without a head or registered office in the EU to benefit from the share schemes exemption to the prospectus directive.  However, to do so they will have to have securities traded on a regulated market or have securities traded on a market in a non-EU country and meet certain other requirements.


Prospectus Directive – proposed exemption for employee share schemes – yet further changes

Council of the European Union update on Financial services: simplified rules on prospectuses for securities

Financing Business Growth: The Government’s response to “Financing a private sector recovery”

Full Council Proposal dated 28 June 2010

For further information or to discuss the issues raised, please contact Guy Abbiss ( or Stephen Wright ( on
+44 20 3051 5711.

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