The Greek government has issued a new draft law on the companies prospectus’ before public offering, which aims to harmonize Greek legislation with the European Union Directive 2003/71EU. The EU directive clearly sets the rules for drafting, approving and circulating the Prospectus which should be issued for Initial Public Offerings or Public Offerings in the Greek market. In detail:
Per the Greek draft, the underwriters will be responsible for a time frame from one to five years after the prospectus is issued, according to BNP Paribas’ General Manager in Greece Alex Kartalis. Fines ranging from three thousand Euro up to one million Euro will be imposed to the accountable parties if investors experience loss due to incomplete or misleading information provided in the company’s prospectus. The Hellenic Bank Association (HBA) has proposed that the time frame should start from one year and be gradually extended to five.
Article 8 of this draft law authorises the Capital Markets Commission (CMC) to determine how to define the price range, the final price of the new shares, the investors’ categories eligible to participate in the PO, the allocation of the new shares etc. This is intended to eliminate issues such as: unreasonable pricing, possible “dependency” between the issuing company and underwriters (being banks) due to possible pending loans etc. The CMC will have the power to postpone for five business days any PO if the procedures do not comply with the new law.
When all the above prerequisites are secured, the company’s Prospectus will be seen as a “passport” for any company wishing to be listed in any European Exchange. The draft law has been submitted to the Bank of Greece (BoG), the CMC, the Athens Exchange (ATHEX) and the HBA for consultation.