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Cross-border Enforcement of Listed Companies' Duties to Inform (IVOR nr. 87) 2012/6.6
6.6 Tortious behaviour: untrue or misleading information/omission
mr.drs. T.M.C. Arons, datum 07-05-2012
- Datum
07-05-2012
- Auteur
mr.drs. T.M.C. Arons
- JCDI
JCDI:ADS370842:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
S. 87G FSMA 2000 deals with the duty to publish a supplementary prospectus if, between the approval of the prospectus and trading of the securities, there arises or is noted a significant new factor, material mistake or inaccuracy relating to the information included in the approved prospectus. Subsection 6 prescribes that the supplementary prospectus must provide sufficient information to correct any mistake or inaccuracy which gave rise to the need for it.
Ss 87A and 87G were introduced in the FSMA 2000 by The Prospectus Regulations 2005.
Cf. the 'informed assessment'-test with the 'reasonable investor'-test laid down in s. 80 FSMA 2000 that contains the general disclosure provision for listing particulars: 'the listing particulars must contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to fmd there, for the purpose of making an informed assessment'. The persons responsible for preparing the prospectus cannot challenge the investor's liability claim by reference to the knowledge of their professional adviser.
S. 87A(1)(b) in combination with s. 87A(2) FSMA 2000; PR 2.1.1R; The Listing Principles (Listing Rules section 7.2) require from those preparing the prospectus that they ensure that it contains all information which would be required by an investor when a decision as to whether or not to invest in the securities so as not to create a false market in those securities.
S. 87A(4) FSMA 2000.
Hudson (2008), para. 23-19 notes, by reference to para. 1(1)(b) of Schedule 10 to the FSMA 2000, that the omission of information required by the FSA Listing Rules can only give rise to liability on the basis of s. 90 if that particular information is also required by the general duty to disclose (s. 80(1)).
Fergusson (2011), p. 55.
CE the UCPD referring to informations obligations contained in the PD 2003, belongs to the consumer acquis. The standard of information was determined by the ECJ in the Gut Springenheide case: the average consumer, who is reasonably well informed andreasonably observant and circumspect.
CE s. 80(3) FSMA 2000.
LR 1.3.3R.
R. v Kyslant [1932] 1 K.B. 442.
Hudson (2008), para. 23-17, para. 23-37.
Coles v White City (Manchester) Greyhound Assn. Ltd (1929) 48 T.L.R. 230, CA.
Investors claiming on the basis of section 90 FSMA 2000 have to prove that the prospectus contained either an untrue or misleading statement or an omission of information required to be included by section 87A or 87G1 FSMA 2000.2 The prospectus must provide all necessary information so as to enable an investor to make an informed assessment3 of the assets and liabilities, financial positions, profits and losses, and prospects of the issuer of the securities and the rights attaching to the securities.4 The particular nature of the securities and the issuer in question determine the standard of information required.5 Besides, this general duty to provide information in the prospectus that enables the investor to make an informed investment decision, section 84(1)(a) FSMA 2000 prescribes that the prospectus has to comply with the content requirements laid down in the FSA Prospectus Rules.6 However, it is important to note that no liability arises for the mere fact of an omission of a detailed item prescribed by the Prospectus Rules; the right to compensation arises only in so far as the information in question was required to be included onder the general duty to include all material inforrnation.7
Even though the statutory provision does not explicitly refer to the notion of a `reasonable investor', the EU background of the duty to provide information8 and common sense provide an argument for the adoption of the `reasonable investor'-test with respect to the information requirement. The information required by the investor to make an informed assessment does not encompass all information which may possibly relate to the issuer; the information must be relevant. Furthermore, the persons responsible for preparing the prospectus can only be required to include information which is within their knowledge on the basis of reasonable inquiries.9
The FSA Listing Rules prescribe that the issuer must take reasonable care to ensure that any information it makes available through the FSA is not misleading, false or deceptive.10 Even though the statements in a prospectus may be literally true, a prospectus that gives a misleading impression of the company's financial condition is held to be false.11 Furthermore, the issuer has to ensure that the information disclosed does not omit anything likely to affect the import of the information. A failure to provide information could be in the form of a statement which conceals the failure to provide the correct information in a non-misleading form/context or it could be in the form of a complete omission to make any mention of this material in the prospectus.12 The omission must be of such a nature as to make the statement actually misleading.13