Assessment of a public offer starts from the content of the information, the way it is published, and the audience it is addressed to. It may also be a public offer even if the information is not called an offer, an advert or investment advice.
Why should the question of whether or not it is a public offer be answered?
It is important to identify public offers, because that can determine whether the requirement to publish a prospectus or an information document about an offer of securities applies. It is not how the event is named that is decisive in the assessment, but whether the investors or potential investors are sent information about the securities that allows them to decide whether to acquire or subscribe to those securities.
Legal basis
Article 2(d) of the Prospectus Regulation states that an offer of securities to the public means a communication to people in any form and by any means that presents sufficient information on the terms of the offer and the securities to be offered to let investors decide to purchase or subscribe to those securities.
A public offer can be made whether the information is published on a website, or in social media, a podcast, an online seminar, an investment meeting, a newspaper article or any other public channel.
Whether something is a public offer is assessed from the actions of individuals and the actual content of the published offer, not from its form or name.
The main characteristics of a public offer
Whether something is a public offer must be assessed case by case. No single characteristic is necessarily decisive, but the total effect of the characteristics may indicate that there is indeed a public offer of securities.
1. The information is publicly available (click to open)
A public offer can occur when information about the securities is available through any channel or form of communication such as a website, social media, a video, a podcast, a seminar or online seminar, personal conversations, telephone calls including cold calls, radio, or television (judgment of the European Court of Justice Schaerbeek and Linkebeek v Holding Communal SA, 9 January 2025 court decision Case 627/23, point 43: without restriction as to [...] the manner in which that offer is to be communicated).
Secondary sales of securities, meaning not the primary sale, may also constitute an offer that requires an information document to be compiled.
2. Who is the information addressed to? (click to open)
The Prospectus Regulation treats public offers very broadly as any offer that is addressed to people. This means that an offer is a public offer even if it is directed only at two people. The offer does not need to have been intended for the wider public or a non-specified group of people. This is expressed in the judgment of the European Court of Justice of 17 September 2014 in case C-441/12 Almer Beheer BV and Daedalus Holding BV v Van den Dungen Vastgoed BV and Oosterhout II BVBA; judgment of the European Court of Justice of 9 January 2025 in case C-627/23 Schaerbeek and Linkebeek v Holding Communal SA; and judgment of the EFTA Court of 18 June 2021 in case E-10/20 ADCADA Immobilien AG PCC in Konkurs v Finanzmarktaufsicht. This does not mean that the offeror cannot apply the exemptions to the requirement to publish a prospectus or information document (see the exemptions below and elsewhere on this website).
3. The information concerns a specific security or issue (click to open)
The characteristics of a public offer can be identified if the information names a specific issuer, issue, bond, share or other security and describes the investment opportunities related to it.
4. The information allows an investment decision to be made (click to open)
Each piece of information must be assessed separately. Sufficient information may be presented as a link to a different source, at separate times or with restricted access rights, but depending on the circumstances this does not necessarily mean that the investor does not have actual access to the information needed for making an investment decision. For more details see the judgment of the EFTA Court of 18 June 2021 in case E-10/20 ADCADA Immobilien AG PCC in Konkurs v Finanzmarktaufsicht.
5. People are encouraged to invest (click to open)
A public offer may be identified by a direct invitation to invest or to subscribe to or purchase securities. It may also be an indirect invitation such as a link to a subscription page, issuing platform, investment announcement or contact form.
The exemption for fewer than 150 people
Article 1(4) of the Prospectus Regulation states that the obligation to publish a prospectus does not apply if the securities are offered to fewer than 150 natural or legal persons other than qualified investors in each member state.
The application of this exemption must assess the offer in its entirety. If the information about the offer is spread publicly on the internet, in social media or through another channel that is indiscriminately available to people, it may be difficult to demonstrate that the offer is actually limited to fewer than 150 people.
With the exemption of 150 people it is the number of people that the offer is communicated to that matters, not the number of people who subscribe to or purchase the security. If the offeror uses agents or other people to present the offer, they must make certain that the limit of 149 people is not exceeded.
The exemption for fewer than 150 people does not mean that an offer addressed to a defined group is automatically spared the requirement to publish information. What is important is how the offer is actually organised and how widely the information is distributed. The offeror must observe that the offer reaches only 149 people and must be ready to prove that the information about the offer has not reached a wider group of people.