On 1 October 2019, ESMA published guidelines on the risk factors to be published in a prospectus in terms of the new Prospectus Regulation (the “Guidelines”) which Guidelines shall apply from 4 December 2019. Under the new Regulation, risk factors are to be categorised according to the type of risk and must be listed in order of materiality (which refers to a combination of likelihood of occurrence as well as the scale of consequences).

The Guidelines are therefore primarily intended to help competent authorities when reviewing the specificity, materiality and presentation of risks factors in a prospectus. This said, the Guidelines will undoubtedly also be of help to issuers and advisors in their preparation of risk factors.

The Guidelines can be accessed here.