11 April 2020
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Issuance of securities in the era of COVID-19

Among the measures adopted by the Government on April 10, 2020, which were aimed at relieving financial pressure on the economy caused by the COVID-19 pandemic and the state of emergency was the Decree on issuance of debt securities (“Decree”).

The purpose of the Decree is to instate a simpler issuance procedure of debt securities during the state of emergency, as well as 180 days after the state of emergency is lifted.

However, what exactly does the Decree prescribe?

Publishing a prospectus – easier than ever

 The Capital Market Act (“Act”) and resultant regulations regulate publishing of debt securities prospectuses, as well as their mandatory contents.

In line with the Act, the Securities Commission (“SeC”), upon receipt of the prospectus from the would-be issuer, checks whether the prospectus meets formal and minimum content requirements. If so, the SeC approves its publication.

However, in order to make this procedure simpler in the context of the state of emergency and to mitigate the current situation’s financial effects on market participants, the Decree makes certain adjustments to the regular procedure.

Firstly, the Decree prescribes that the prospectus is to be drawn up as a single document, without the summary prospectus. Thus the SeC will issue a new, simpler form and prescribe new, simpler minimum requirements regarding contents of prospectuses within 15 days.

Furthermore, it is not necessary to include publicly available information about the issuer, nor information about the issuer’s financial and audit reports in the prospectus. It is enough to specify where such information can be found electronically and to provide links to the relevant webpages. However, the prospectus must include its issuer’s last regular or consolidated annual financial statement, as well as their management annual report, if such report is prepared by the issuer.

The SeC has 10 working days to approve publishing of a prospectus after they receive a complete request.

When their prospectus is approved, the issuer becomes a public company in the sense of the Act – if they have not already been a public company – and they remain a public company for the period of validity of issued debt securities. On the other hand, the Decree provides that a joint-stock company that becomes a public company does not have to include its shares on a regulated market or MTF.


For more information, please contact us via covid19@geciclaw.com.