| Law on the Prospectus for Securities Offered for Sale (Wertpapier-Verkaufsprospektgesetz - VerkProspG ) |
As promulgated on 9 September 1998 (Federal Law Gazette I p. 2701), as last amended by Article 2 of the Third Financial Market Promotion Act (Gesetz zur weiteren Fortentwicklung des Finanzplatzes Deutschland or Drittes Finanzmarktförderungsgesetz) of 24 March 1998 (Federal Law Gazette I p. 529)
Table of Contents
Part I Scope
Section 1 General rule
Section 2 Exceptions with respect to the type of the offer
Section 3 Exceptions with respect to specific issuers
Section 4 Exceptions with respect to specific securities
Part II Offer of securities for which admission to Official Quotation (amtliche Notierung) or to the Regulated Market (geregelter Markt) has been sought
Section 5 Content of the prospectus
Section 6 Board of Admission (Zulassungsstelle) and Admissions Committee (Zulassungsausschuß)
Part III Offer of securities for which admission to Official Quotation or to the Regulated Market has not been sought
Section 7 Content of the prospectus
Section 8 Depository
Section 8a Permission and prohibition to publish a prospectus
Section 8b Prohibition of the public offer
Section 8c Obligation of the offeror to furnish information and provide documents
Section 8d Immediate enforcement
Section 8e Advertising
Part IV Publication of the prospectus; liability for statements made in the prospectus
Section 9 Period for and form of publication
Section 10 Publication of an incomplete prospectus
Section 11 Publication of supplementary information
Section 12 Reference to the prospectus
Section 13 Liability for statements made in the prospectus
Part V Procedure within the European Community
Section 14 Cooperation within the European Community
Section 15 Offer in several Member States of the European Union or in other Contracting States to the Agreement on the European Economic Area
Part VI Fees; provisions on fines; transitional provisions
Section 16 Fees
Section 17 Provisions on fines
Section 18 Transitional provisions
For securities which are offered to the public in Germany for the first time and are not admitted to trading on a German stock exchange, the offeror shall publish a prospectus (sales prospectus), unless different provisions are set forth in sections 2 to 4.
A prospectus does not need to be published if the securities
1. are only offered to persons who on a professional or commercial basis purchase or sell securities for own account or for the account of a third party;
2. are offered to a restricted circle of persons;
3. are only offered to employees by their employer or by an undertaking associated with his undertaking;
4. may only be acquired in denominations of at least eighty thousand Deutsche Mark or only at a purchase price of at least eighty thousand Deutsche Mark per investor, or if the selling price for all securities offered does not exceed eighty thousand Deutsche Mark;
5. are part of an issue for which a prospectus has already been published in Germany.
A prospectus does not need to be published if the securities
1. are issued by
a) a Member State of the European Union, another Contracting State to the Agreement on the European Economic Area, a full member state of the Organisation for Economic Cooperation and Development, provided it has not rescheduled its foreign debt or has had similar financial difficulties within the last five years, or a state which has concluded special credit agreements with the International Monetary Fund in connection with its General Arrangements to Borrow;
b) a local authority of the states mentioned in a) above; or
c) an international organisation under public law, to which at least one Member State of the European Union or another Contracting State to the Agreement on the European Economic Area belongs;
2. are bonds which are continuously or repeatedly issued by
a) a credit institution within the meaning of section 1 paragraph (1) of the Banking Act (Gesetz über das Kreditwesen) or a financial services institution rendering financial services within the meaning of section 1 paragraph (1a) sentence 2 no. 1 to 4 of the Banking Act, or the Development Loan Corporation (Kreditanstalt für Wiederaufbau); or
b) an enterprise operating under section 53b paragraph (1) sentence 1 or paragraph (7) of the Banking Act which publishes its annual financial statements regularly;
an issue is deemed repeated if during the twelve calendar months preceding the public offer at least one issue of bonds was carried out within the European Community or another Contracting State to the Agreement on the European Area;
3. are units which are issued by a German investment company or a foreign investment company and in respect of which holders have the right to return the units;
4. are bonds issued by a company or a legal person domiciled in a Member State of the European Union or in another Contracting State to the Agreement on the European Area which operates under a state monopoly and which has been established or is regulated by, or by virtue of, a special law, or in respect of the bonds of which a Member State of the European Union or one of its federal states or another Contracting State to the Agreement on the European Area or one of its federal states has assumed the unconditional and irrevocable guarantee for interest and redemption repayment.
(1) A prospectus does not need to be published if the securities
1. are Euro-securities which are not publicly advertised and are not offered by way of deals within the meaning of the Law Regarding Revocation of Door-to-Door and Similar Dealings (Gesetz über den Widerruf von Haustürgeschäften und ähnlichen Geschäften);
2. are shares in respect of which admission to Official Quotation on a German exchange has been sought and whose number, estimated market value or nominal value, or in the case of no-par stocks their calculated value, is less than ten per cent of the corresponding value of the shares of the same class officially listed on the same exchange, and if the issuer complies with the publication requirements necessary for admission; shares which only differ in respect of the time when the entitlement to dividends begins shall be deemed shares of the same class;
3. are shares in respect of which no admission to Official Quotation on a German exchange has been sought and whose number, estimated market value or nominal value, or in the case of no-par stocks their calculated value, is less than ten per cent of the corresponding value of the shares of the same class admitted to trading on a German exchange, if investors are provided with up-to-date information about the issuer equivalent to the information stipulated in Part III; shares which only differ in respect of the time when the entitlement to dividends begins shall be deemed shares of the same class;
4. are shares which are allocated to shareholders after a capital increase out of corporate funds;
5. are certificates which are issued instead of shares of the same company and with the issue of which no capital change is involved;
6. are issued after the exercise of exchange or subscription rights attached to securities other than shares, provided listing particulars or a prospectus were published in Germany at the time these securities were issued;
7. are offered in the case of a merger of companies;
8. are bonds with an agreed maturity of less than one year.
(2) Euro-securities within the meaning of paragraph (1) no. 1 are securities which
1. are underwritten or promised to be underwritten and distributed by a syndicate whose members do not all have their registered office in the same state,
2. for an essential part, are not offered in the state in which the issuer has his registered office; and
3. may only be subscribed or initially acquired via a credit institution within the meaning of section 1 paragraph (1) of the Banking Act, a financial services institution rendering financial services within the meaning of section 1 paragraph (1a) sentence 2 no. 1 to 4 of the Banking Act, or an enterprise operating under section 53b paragraph (1) sentence 1 or paragraph (7) of the Banking Act.
(1) Where admission to Official Quotation on a German exchange has been sought for securities which are offered to the public, the provisions of section 38 paragraph (1) no. 2, paragraph (2) of the Exchange Act (Börsengesetz) in connection with sections 13 to 40 and 47 of the Exchange Admission Regulation (Börsenzulassungs-Verordnung) shall apply accordingly in respect of the language and the content of the prospectus.
(2) Where admission to the Regulated Market on a German exchange has been sought for securities which are offered to the public, section 73 paragraph (1) no. 2 of the Exchange Act shall apply accordingly in respect of the content of the prospectus.
(1) Where admission to Official Quotation on a German exchange has been sought for securities which are offered to the public, the prospectus may only be published if it has been approved by the Board of Admission of the exchange. If a request for admission is made with several German exchanges simultaneously, the issuer shall determine the Board of Admission to be responsible for the approval of the prospectus. The Board of Admission shall decide about the request for approval within 15 exchange days after receipt of the prospectus.
(2) The Board of Admission shall monitor compliance with the requirements to which the offeror is subject in making a public offer.
(3) The Board of Admission shall provide the offeror upon request with a certificate of the approval of the prospectus.
(4) If admission to the Regulated Market on a German exchange has been sought for securities which are offered to the public, paragraphs (1) and (2) shall apply accordingly under the condition that the Board of Admission is replaced by the Admissions Committee. If the prospectus is approved, it must be indicated in a notification that this does not imply approval in accordance with Article 20 of the Directive 89/298/EEC of 17 April 1989 coordinating the requirements for the drawing up, scrutiny and distribution of the prospectus to be published when transferable securities are offered to the public (OJ EC No. L 124 p. 8).
(5) If a request for admission to Official Quotation and to the Regulated Market is made with several German exchanges simultaneously, the issuer shall determine the Board of Admission to be responsible for the approval of the prospectus.
(1) Where admission to Official Quotation or to the Regulated Market on a German exchange has not been sought for securities which are offered to the public, the prospectus shall contain the information necessary to enable the public to make a proper assessment of the issuer and the securities.
(2) The Federal Government shall be authorised to issue, by ordinance and with the consent of the Bundesrat, any provisions necessary for the protection of the public regarding the language and the content of the prospectus, in particular as regards
1. the persons or companies assuming responsibility for the content of the prospectus;
2. the offered securities; and
3. the issuer of the securities as well as his capital and business activities, his assets and liabilities, financial position, profits and losses, his management and supervisory bodies as well as his prospects.
(3) An ordinance according to paragraph (2) above may also stipulate exemptions from the requirement to include certain information in the prospectus,
1. if there are special circumstances with respect to the issuer, the securities offered, the issue of these securities or the group of investors to which the securities issue is addressed and if the interests of the public have been sufficiently taken into account by an alternative form of information, or
2. considering the minor significance of individual information or in view of a considerable damage likely to be caused with the issuer.
Before its publication the offeror shall sent the prospectus to the Federal Securities Supervisory Office (Federal Supervisory Office). Information to be added pursuant to section 10 shall be sent not later than the time when it is published. The Federal Supervisory Office shall provide the offeror with a confirmation of the date on which it has received the prospectus.
(1) The prospectus may only be published if the Federal Supervisory Office has permitted its publication, or if after receipt of the prospectus ten working days have elapsed without the Federal Supervisory Office having prohibited the publication.
(2) The Federal Supervisory Office shall prohibit the publication if the prospectus does not contain the information required under section 7 paragraph (1) or an ordinance issued pursuant to section 7 paragraphs (2) and (3). Section 10 shall not be affected.
The Federal Supervisory Office shall prohibit the public offer of securities for which admission to Official Quotation or to the Regulated Market has not been sought if it has evidence indicating that in contravention of section 1 the offeror has failed to publish a prospectus or that the prospectus does not contain the information required under section 7 paragraph (1) or an ordinance issued pursuant to section 7 paragraphs (2) and (3).
(1) Upon request of the Federal Supervisory Office the offeror shall furnish information and provide documents required by the Federal Supervisory Office
1. for monitoring compliance with the requirements under sections 1, 8, 8a paragraph (1), sections 9 to 11, 12 sentence 1, section 14 paragraph (1), section 15 paragraphs (3) and (4); or
2. for verifying whether the prospectus contains the information required under section 7 paragraph (1) or an ordinance issued pursuant to section 7 paragraphs (2) and (3).
(2) A person obliged to furnish information may refuse to do so in respect of any questions the answers to which would place himself or one of his relatives as designated in Section 383 paragraph (1) numbers 1 to 3 of the Code of Civil Procedure at risk of criminal prosecution or proceedings under the Law on Administrative Offences. Such person shall be informed of his right to refuse to furnish information.
Objections to and actions to set aside measures in accordance with section 8a paragraph (2) sentence 1 and sections 8b and 8c paragraph (1) shall have no suspensory effect.
(1) The Federal Supervisory Office may prohibit advertising with information that is likely to mislead as to the extent of the verification pursuant to section 8a.
(2) Before general measures pursuant to paragraph (1) above are taken, the central associations of the economic sectors concerned and of the consumer protection agencies shall be consulted.
(1) The prospectus shall be published pursuant to paragraph (2) or (3) below at least one working day before the public offer is made.
(2) Where admission to Official Quotation or to the Regulated Market has been sought, the prospectus must be published
1. by insertion in the official stock exchange gazettes in which the request for admission was or is going to be published; or
2. by making it available, free of charge, at the paying agents stated in the prospectus and at the Boards of Admission or Admissions Committees of those exchanges where admission has been sought; it shall be announced in the official stock exchange gazettes in which the request for admission was or is going to be published at what agents the prospectus is made available.
(3) Where admission to Official Quotation or to the Regulated Market has not been sought, the prospectus shall be published either by announcing it in a supra-regional official stock exchange gazette or by making it available, free of charge, at the paying agents stated in the prospectus; in the latter case it shall be announced in a supra-regional official stock exchange gazette that the prospectus is made available at the paying agents.
If certain conditions of an offer are determined only shortly before the offer is made, the prospectus may only be published without this information if it states how this information is to be added. The information thus to be added shall be published not later than on the day of the public offer pursuant to section 9 paragraphs (2) and (3).
If since the publication of the prospectus changes have occurred which are of material significance for the assessment of the issuer or the securities, these changes shall be published without delay and during the time of the public offer in a supplement to the prospectus. Such supplement shall be subject to the provisions relating to the prospectus and its publication accordingly, with the exception of section 8a above.
Publications in which a public offer of securities is announced and the material characteristics of the securities are described shall contain a reference to the prospectus and its publication. If admission to Official Quotation or to the Regulated Market on a German exchange has been sought the publications shall be sent without delay to the Board of Admission or the Admissions Committee where admission has been sought.
(1) If information in a prospectus that is material for the assessment of the securities is incorrect or incomplete the provisions stipulated in sections 45 to 48 of the Exchange Act shall apply accordingly as follows:
1. in applying section 45 paragraph (1) sentence 1 of the Exchange Act, the time of the initial public offer in Germany, instead of the time when the securities were introduced, shall be relevant for the determination of the period of six months;
2. section 45 paragraph (3) of the Exchange Act shall apply to issuers domiciled abroad whose securities are also offered to the public abroad.
(2) Regardless of the value of the matter in dispute, claims pursuant to paragraph (1) above as well as claims referred to in section 48 paragraph (2) of the Exchange Act shall only be decided upon by the local court (Landgericht)
1. in whose district the exchange is situated with the Board of Admission or Admissions Committee of which approval of the prospectus has been sought; or
2. in whose district the Federal Supervisory Office is situated, if admission to Official Quotation or to the Regulated Market has not been sought.
If such local court has a commercial division, the legal dispute shall be dealt with by this division.
(1) If the securities are also to be offered to the public in other Member States of the European Union or in other Contracting States to the Agreement on the European Economic Area, the person who is responsible for publishing a prospectus shall sent to the competent authorities of such states the draft prospectus he intends to use in these states.
(2) As part of their functions and responsibilities the Boards of Admission, Admissions Committees and the Federal Supervisory Office cooperate among each other and with the competent authorities in the other Member States of the European Union or in the other Contracting States to the Agreement on the European Economic Area and provide each other with the necessary information in so far as official secrecy is respected; to this extent, the members of the Admission Boards, the Admissions Committees and the Federal Supervisory Office as well as the persons acting on their behalf are not subject to the secrecy requirement.
(3) If securities of an issuer domiciled in another Member State of the European Union or in another Contracting State to the Agreement on the European Economic Area to which subscription rights for shares are attached are to be offered to the public in Germany, and if admission to Official Quotation on a German exchange has been sought, the Board of Admission shall obtain a statement from the competent authority of such other state before deciding on the request for approval of the prospectus if the shares of the issuer are admitted to official listing in this state.
(1) If securities of an issuer domiciled in another Member State of the European Union or in another Contracting State to the Agreement on the European Economic Area are to be offered to the public in this state and in Germany simultaneously or nearly simultaneously and if admission to Official Quotation on a German exchange has been sought, the Board of Admission shall, except as provided in paragraph (2) below, approve without further examination the prospectus approved by the competent authority of such other state if it has been provided with a translation of the prospectus into the German language as well as with a certificate of the competent authority relating to the approval of the prospectus. The Board of Admission may waive or partly waive the requirement to furnish a translation of the prospectus if the prospectus is written in a language which is not uncommonly used in Germany in the field of cross-border securities trading. If admission to the Regulated Market on a German exchange has been sought, sentences 1 and 2 shall apply accordingly provided that the Board of Admission is replaced by the Admissions Committee.
(2) If the competent authority of such other Member State or such other Contracting State to the Agreement on the European Economic Area has granted an exemption in respect of specific information to be contained in the prospectus or if it has granted derogations from the information normally required, the Board of Admission or the Admissions Committee shall approve the prospectus pursuant to the first sentence of paragraph (1) above only if
1. the exemption or derogation is permissible under this Act or pursuant to this Act;
2. the same conditions justifying the exemption exist in Germany; and
3. if the exemption or derogation does not depend on further conditions which would cause the Board of Admission or the Admissions Committee to refuse the exemption or derogation.
(3) If securities of an issuer domiciled in another Member State or in another Contracting State to the Agreement on the European Economic Area are to be offered to the public in such state and in Germany simultaneously or nearly simultaneously and if admission to Official Quotation or to the Regulated Market on a German exchange has not been sought, a German translation of the prospectus approved by the competent authority of such other state may be published as the prospectus provided the Federal Supervisory Office has been provided with a translation of the prospectus into the German language as well as with a certificate of the competent authority relating to the approval of the prospectus. The Federal Supervisory Office may waive or partly waive the requirement to translate the prospectus if the prospectus is written in a language which is not uncommonly used in Germany in the field of cross-border securities trading.
(4) If securities of issuers domiciled outside the area of application of this Act are to be offered to the public both in another Member State or in another Contracting State to the Agreement on the European Economic Area not being the state of domicile and in Germany, the provisions of paragraphs (1) to (3) shall apply accordingly, provided the issuer determines that the prospectus be approved by the competent authority of such other state.
(1) The Fee Regulations according to section 5 of the Exchange Act shall stipulate the fees to be levied by the Board of Admission or the Admissions Committee for the approval of the prospectus.
(2) The Federal Supervisory Office shall levy fees for the deposit of the prospectus. The Federal Ministry of Finance shall determine by ordinance not requiring the consent of the Bundesrat the details for levying the fees and the amount of the fees. The Federal Ministry of Finance may by ordinance delegate the authority to the Federal Supervisory Office.
(1) An administrative offence is committed by any person who wilfully or carelessly
1. fails to publish a prospectus in contravention of section 1;
2. publishes a prospectus in contravention of section 6 paragraph (1) sentence 1, also in connection with paragraph (4) sentence 1, or section 8a paragraph (1);
3. fails to comply with an enforceable requirement pursuant to section 8a paragraph (2) sentence 1 or section 8b;
4. fails to comply with an enforceable requirement pursuant to section 8e paragraph (1); or
5. fails to make a publication or an announcement, fails to do so within the prescribed period or in the prescribed form in contravention of section 9 paragraph (1), section 10 sentence 2 or section 11, all also in connection with section 9 paragraph (2) or (3).
(2) An administrative offence is committed by any person who wilfully or carelessly in contravention of section 8c paragraph (1) fails to furnish information, or furnishes information incorrectly, incompletely or not within the prescribed period or fails to provide a document, provides a document incorrectly, incompletely or not within the prescribed period.
(3) The administrative offence is punishable by a fine not exceeding one million Deutsche Mark in the cases referred to in paragraph (1) numbers 1. to 3. above and by a fine not exceeding two thousand Deutsche Mark in the cases referred to in paragraph (1) numbers 4. and 5. above.
(4) The administrative authority within the meaning of section 36 paragraph (1) number 1 of the Law on Administrative Offences shall be the Federal Supervisory Office in the cases referred to in paragraph (1) above where no admission to Official Quotation or to the Regulated Market on a German exchange has been sought in respect of securities which are offered to the public, as well as in the cases referred to in paragraph (2) above.
(1) In respect of securities which were offered in Germany before 1 April 1998 in connection with a public exchange offer and for which no prospectus was published pursuant to section 4 paragraph (1) number 7. as announced on 17 July 1996 (Federal Law Gazette I p. 1047), section 1 shall apply under the condition that the first offer to the public made after 1 April 1998 is deemed an initial public offer.
(2) As regards prospectuses published in Germany before 1 April 1998, section 13 as announced on 17 July 1996 (Federal Law Gazette I p. 1047) and the provisions of sections 45 to 49 of the Exchange Act as announced on 17 July 1996 (Federal Law Gazette I p. 1030) shall continue to apply.
(3) Section 16 paragraph (2) as announced on 17 July 1996 (Federal Law Gazette I p. 1047) concerning the levying of fees by the Federal Supervisory Office shall apply until an ordinance pursuant to section 16 paragraph (2) sentence 2 takes effect.
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