Jersey Company Law Series – Rules for Issuing a Prospectus

• A prospectus in Jersey is, broadly, an invitation to the public to become a member of a company or apply for any securities

• Jersey has a flexible statutory regime for issuing a prospectus which involves obtaining the Jersey registrar's consent (subject to exemptions)

• Certain rules also govern any prospectus issued in Jersey by a non-Jersey company

The regulation of such a prospectus is predominantly governed by the Control of Borrowing (Jersey) Order 1958 (as amended) ("COBO") and the Companies (General Provisions) (Jersey) Order 2002 ("CGPO").

What is a "Prospectus"?

A "Prospectus" is defined under the (amended) Companies (Jersey) Law 1998 ("CJL") and means an invitation to the public to become a member of a company or to apply for any securities, save that an invitation is not considered to be made to the public (and is therefore exempt from COBO) where:

• the invitation is addressed to either or both:

• qualified investors as defined in Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (OJ L 168, 30.6.2017, p. 12), as amended from time to time; or

• professional investors as defined in the Financial Services (Investment Business (Special Purpose Investment Business – Exemption)) (Jersey) Order 2001;

• the number of persons (other than qualified investors and professional investors) to whom the invitation is addressed does not exceed 50 in Jersey and 150 elsewhere;

• the minimum consideration which may be paid or given by a person for securities to be acquired by that person is at least EUR 100,000 (or an equivalent amount in another currency);

• the securities to be acquired or applied for are denominated in amounts of at least EUR 100,000 (or an equivalent amount in another currency);

• the invitation relates to the issue of shares or other securities by a company to its members in satisfaction, in whole or in part, of a distribution to be made by that company;

• the invitation relates to a scheme specified in Article 3(2)(c) of the Companies (General Provisions) (Jersey) Order 2002; or

• any combination of the above paragraphs applies.

The term "Securities" is also defined under the CJL and include shares or debentures in a company, any interests in any such shares or debentures or any rights to acquire any such shares or debentures.

As is evident, the CJL has wide ranging exemptions and a document that would otherwise be a prospectus under Jersey law can fall outside of the scope of the legislation where it falls under any one, or any combination, of the exemptions above.

What if a document is not exempted?

Where the document to be issued does not fall into any of the exemptions under COBO and is considered a "prospectus", it must comply with the CGPO.

Broadly, the CGPO requires:

• consent from the Jersey Companies Registrar ("Jersey registrar") to have been obtained to circulation of the prospectus;

• the prospectus to include the information contained in Part 1 of the CGPO schedule;

• the prospectus to include the statements specified contained within Part 2 of the CGPO schedule; and

• a copy of the prospectus, signed by all directors of the company in question (together with a signed copy of any report included in or attached to the prospectus and any such other particulars as the Jersey registrar may require) having been delivered to the Jersey registrar.

In respect of the Jersey registrar's consent referred to above, consent must be obtained prior to any circulation of the prospectus. The Jersey registrar provides a memorandum of compliance which is typically submitted with the prospectus which must show compliance (whether in full or part) with the CGPO.

The Jersey registrar is able to give consent to circulation of a prospectus even where it does not comply in every respect with CGPO provided the Jersey registrar is satisfied that deviation from the requirements therein does not affect the substance of the prospectus in question and is not intended to mislead.

Implications of issuing a "Prospectus"

At present, where a Jersey private company issues a prospectus that does not fall under the COBO exemptions, it will be treated under the CJL as if it were a public company and would mean that it would need to adhere to all relevant public company requirements pursuant to the CJL.

The issue of a "Prospectus" by a non-Jersey company

To note, where a person proposes to issue a prospectus in Jersey which relates any offer for subscription, sale or exchange of any securities of a non-Jersey body corporate, this is prohibited under COBO unless either the consent of the JFSC to the issue of such prospectus is obtained or unless:

• such body corporate does not have a connection with Jersey which for the purposes of this Article is a relevant connection; and

• such offer (a) does not for the purposes of this Article constitute an offer to the public, or (b) is for the purposes of this Article valid in the United Kingdom or in the Bailiwick of Guernsey and is, mutatis mutandis, circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom or in the Bailiwick of Guernsey as the case may be.

The Walkers' Corporate and Regulatory team has advised on the issuance of a variety of different types of prospectuses as well as applications to the Jersey registrar and the JFSC for consents to issue. Our team regularly advises on a wide range of other equity capital market and other fund-raising exercises by Jersey companies or in Jersey including involving listed vehicles on various stock exchanges worldwide.

Our team has extensive M&A experience and is supported by specialist funds, finance and dispute resolution practice groups enabling us to offer a full service to financial services client across all matters under Jersey law.

The information contained in this guide is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.