Prospectus Liability under the EU Prospectus Regulation

Abstract This chapter explores the complexities of the European rules governing prospectus liability under the EU Prospectus Regulation. It highlights the efforts to harmonize prospectus rules across European jurisdictions, while also underlying the paradoxical choice by the European legislator to leave enforcement of these rules to Member States. To grasp when prospectus liability may be invoked, this chapter examines the key disclosure obligations required by the Prospectus Regulation. It further addresses the concise civil liability framework set forth by the Prospectus Regulation and the efforts by the CJEU to provide clarifications in this regard. Ultimately, this chapter demonstrates that prospectus liability remains largely a Member States’ matter, creating significant challenges, particularly in terms of investor protection and legal uncertainty for issuers. It concludes by questioning the absence of a unified European prospectus liability framework at the European level, especially in light of other capital market instruments such as MiCAR and the UCITS Directive, which expressly establish comprehensive liability frameworks.