The Danish Financial Supervisory Authority's Memo on historical financial Data in Share Prospectuses

Date 14 aug. 2014
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In a memo of 6 August 2014, the Danish Financial Supervisory Authority (“FSA”) has defined which historical financial data an issuer must provide in a share prospectus.

The reason for the memo is that in practice, it has been difficult for issuers of shares to get an overview of the requirements for financial data in a prospectus.  Thus, it is not a question of making any changes to the regulations, but a question of the FSA providing a summation and systematization as a service to issuers.

With the FSA’s memo, the formal and substantive requirements which an issuer must meet regarding historical financial data in share prospectuses have now been clarified, as have the relaxations applicable to the issuer.

Requirement of financial Data from the Issuer

It follows from the Executive Order on Prospectuses for Securities Admitted to Trading on a Regulated Market and for Offers to the Public of Securities of more than EUR

5,000,000 that the issuer must compose a prospectus containing the information necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, results and future prospects.


Information Requirements of historical financial Data

The information requirements to prospectuses for securities can be found in the Prospectus Regulation ((809/2004/EC) as amended, which prescribes the issuer’s requirements to publication of historical financial data. Issuers classified as small or medium-sized companies (“SMEs”) or companies with a limited market value, as well as prospectuses for pre-emptive rights issues, are subject to less stringent information requirements than major issuers.

Pre-emptive rights issues mean where the issuer only offers shares to existing shareholders.

SMEs and Companies with a limited Market Value

An SME is defined as a company which satisfies at least two of the three following criteria: i) an average number of fulltime employees during the financial year of less than 250 persons; ii) a total balance of less than EUR 43m; or iii) an annual net turnover of less than EUR 50m. A company with a limited market value is a company which is listed on a regulated market and has a market value under EUR 100m based on the quoted value at the end of the year in the previous three calendar years.

The table below shows the information requirements in the different cases that the issuers must meet regarding historical financial data.



 Expanded Information Requirement to the Issuer’s financial Data

In certain cases, an extended information requirement is imposed on the issuer, according to which the prospectus must state pro forma earnings and/or information about other companies than the issuer. This follows directly from the Prospectus Order which also in certain cases authorizes the Danish Financial Supervisory Authority to increase the information requirement.

The expanded information requirements are imposed on the issuer in the following cases:

  • The issuer has had a substantial gross change – meaning that due to a single event, the issuer undergoes changes of more than 25% in relation to relevant indicators, for example balance, revenue, net income etc.
  • The issuer has a complex accounting history – meaning that i) the issuer’s business activity is not actually reflected in the historical financial data; ii)  which can affect the investors’ valuation of the issuer; and iii) the detailed financial data relates to a different company.
  • The issuer has taken on a considerable financial obligation – meaning that the issuer has entered into an agreement that has not yet been executed, and the implementation of the agreement will result in a considerable gross change.

The extended information requirement, which follows directly from the Prospectus Order, precedes the FSA’s authority which is why the issuer must be aware of whether the issuer incurs such liability. If the issuer is included by the extended information requirement, the issuer must publish pro forma accounts relating only to the periods of the current accounts, the most recent closed accounts, or the most recent closed interim accounts, of relevance.

The pro forma accounts must be presented in three columns with the first column containing the historical unadjusted information; the second column containing potential adjustments, including notes; and the third column containing the historical adjusted information.

I case the issuer has a has a complex accounting history or has taken on a considerable financial obligation, the FSA must also make a specific assessment of whether information is to be included in the prospectus of another company and if so, the amount of information. The FSA’s principle is that the information which is included about the other company must correspond to the information which is included about the issuer.


In the event that the issuer has any doubts about which information to include in the prospectus, the issuer must clarify such doubts with the FSA before the first draft prospectus is submitted to the FSA.

If you have any questions or would like additional information regarding prospectuses, please contact partner Dan Moalem ( or attorney Lennart Meyer Østenfjeld (

The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.