Publication without prospectus – principled decision from the Danish Financial Supervisory Authority

Date 11 dec. 2008
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In a ruling from 3 November 2008, the Danish Financial Supervisory Authority decided to report a company (the “Company”) to the police for having offered 90 shares at a total value of DKK 13,500,000 without having an approved prospectus. The decision has been presented to the Danish Securities Council.


The case in brief

At its website, the company had offered 90 shares at DKK 150,000 per share. Prior to the offering, the company had not composed and submitted a prospectus for the Danish Financial Supervisory Authority’s approval in accordance with Section 44-46 of the Danish Securities Trading Act.


Rules applying to prospectus obligation

Section 44(1) of the Securities Trading Act states that, an approved prospectus must be present at the offering of securities to the public of a value between EUR 100,000 and EUR 2,500,000. As a rule, making an application to more than 100 persons is considered a public offering.

According to Section 45 of the Securities Trading Act and as mentioned in Section 44, prospectuses must be submitted to the Financial Supervisory Authority for approval. Pursuant to Section 46, an offering must not take place before the prospectus has been published.


Sections 4 – 11 of Executive Order 1231 of 22 October 2007 on the prospectus of public offerings between EUR 100,000 and EUR 2,500,000 of these securities states which information the prospectus must contain.


The ruling of the Danish Financial Supervisory Authority

The Financial Supervisory Authority assessed that Section 44(1) and Section 46 of the Securities Trading Act had been violated as the company had not composed and submitted a prospectus to the Financial Supervisory Authority. The fact that the case only concerned 90 shares did not affect this assessment.


The Financial Supervisory Authority has thus determined that the duty to publish an approved prospectus applies regardless of the amount of shares offered. It is the number of persons for whom the offer is available and, thus, levelled at that is important.


The Financial Supervisory Authority also determined that the offering of the shares had been publicly assessable to more than 100 persons as it had been published at the company’s website. It may, therefore, be concluded that any offering through a website will probably be sufficient to make an offering public and, thus, available to more than 100 persons.


If you have questions or require additional information on offering of shares or the obligation to compose prospectuses, please contact attorney Dan Moalem (


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.