Information document for making a public offering: A common approach in the Baltic countries

On 18 December, the Council of Latvijas Banka approved the "Regulations on Drawing up and Publishing an Information Document for Making a Public Offering", which will introduce uniform requirements for disclosing information in the Baltic countries and will contribute to raising funds of businesses in the capital markets of the three Baltic countries.

In 2022, when assessing the development opportunities of the Baltic capital market, supervisors of the financial market of the Baltics agreed on the necessity to harmonise the requirements set for issuers on drawing up offering documents to be met by issuers. Then a working group of supervisory authorities of the Baltic countries embarked on joint work to develop the regulatory framework establishing the requirements for a public offering where no prospectus has to be drawn up. The working group identified the changes necessary to the regulatory framework and developed uniform requirements to be included in the information document for making a public offering. Lietuvos bankas adopted the regulations for the information document to be used for making a public offering in early December. It is expected that the regulations will also be adopted in Estonia in the near future.

Consequently, the requirements for drawing up the information document will be the same in the Baltic countries, and issuers will no longer need to draw up three different offering documents in compliance with the requirements of legal acts of individual countries: Latvia, Lithuania and Estonia.

As of 2024, in cases where a public offering of securities is made not only in Latvia but also in Lithuania and Estonia, it will be possible to draw up the information document in English only. If a public offering of securities is made only in Latvia, the information document will have to be drawn up and published in Latvian.

The new requirements will make the Baltic capital market more accessible to small and medium-sized enterprises, and issuers will enjoy a more convenient, faster and cheaper way of preparing the offering document.

At the same time, the requirements included in the regulations will ensure that the information document contains the minimum information an investor needs to be able to make a reasoned investment decision.

The new regulations of Latvijas Banka no longer impose any obligation on a person making a public offering to coordinate the information document with Latvijas Banka prior to making a public offering. Thus, the administrative burden of issuers is reduced.

The "Regulations on Drawing up and Publishing an Information Document for Making a Public Offering" refer to information documents regarding simple transferable securities, i.e. shares and bonds. Meanwhile, in the future it will be necessary to prepare a prospectus pursuant to the requirements of Regulation No 2017/1129 regarding a public offering made in relation to asset-backed securities.

The "Regulations on Drawing up and Publishing an Information Document for Making a Public Offering" have been announced today in the official gazette of the Republic of Latvia Latvijas Vēstnesis.

The new regulations will come into force on 1 January 2024. They will replace the Financial and Capital Market Commission's Regulation No 49 "Regulation on the Information to Be Included in the Offering Document and Its Preparation".