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ESMA Clarifies Position on Documents Incorporated by Reference in Prospectuses
Following up on its earlier clarification around future incorporation by reference under Regulation (EU) 2017/1129 (the "Prospectus Regulation"), the European Securities and Markets Authority ("ESMA") published its final report on regulatory technical standards on July 15, 2025, updating the list of documents that may be incorporated by reference into prospectuses
Restoring Incorporation by Reference of Prospectus Directive Documents
The final report on regulatory technical standards ("RTS") address a gap created by Regulation (EU) 2024/2809 (the "Listing Act Regulation"), which had removed the reference to Directive 2003/71/EC (the "Prospectus Directive") from Article 19(1) of the Prospectus Regulation. This removal had disrupted established market practice, particularly for fungible issuances of non-equity securities, by preventing issuers from incorporating by reference terms and conditions from documents previously approved under the Prospectus Directive.
Permitting Incorporation by Reference of Voluntary Pre-Issuance Disclosures with Regard to EU Green Bonds
The RTS also permit the incorporation by reference of voluntary pre-issuance disclosures for environmentally sustainable and sustainability-linked bonds, as introduced by the EU Green Bond Standard. This measure is intended to incentivize the use of standardized disclosure templates and address concerns around greenwashing.
Future Incorporation by Reference
The Listing Act Regulation enabled issuers to incorporate by reference in a base prospectus certain financial information published after the date of approval of the base prospectus. ESMA clarified on June 6, 2025, in its new ESMA_QA_2255 that annual and interim financial information includes any of the audit reports and financial statements, management reports (including, where applicable, the sustainability reporting, corporate governance statements, remuneration reports, and annual reports), or any disclosure of information required under Directive 2011/61/EU. When future information is incorporated by reference, the obligation to produce a supplement no longer applies in such circumstances.
Next Steps
While issuers are progressively taking advantage of future incorporation by reference and adjusting their base prospectuses and dealer agreements to reflect such future incorporation, ESMA's recent guidance on documents incorporated by reference represents a targeted but significant step in reducing administrative burdens and facilitating efficient access to EU capital markets, in line with broader policy objectives to support issuers and promote sustainable finance.
