Venture capital trust (VCT) providers are split over the interpretation of new European rules which set a threshold for securities offers requiring a prospectus, while the Treasury and the FSA say firms should make their own minds up.
In July, the Treasury implemented part of the EU’s prospectus directive, which is a framework for the preparation of prospectuses in public offers of securities, where securities are admitted to trading on a regulated market.
It raised the threshold for securities offers that require a prospectus from £2.5m to £5m. VCT providers are unclear whether the threshold applies to each VCT within a linked offer or to the offer in aggregate.
When asked by Money Marketing, Fundweb.co.uk’s sister publication, to clarify the new rules, a Treasury spokesman says: “The requirement for a prospectus and its content is a matter for legal advice.”
An FSA spokesman says: “We have a limited role in advising prospectus rules. It is up to VCTs to get legal advice on how to interpret the law.”
In November, Albion Ventures released its Albion VCTs linked top-up offer 2011/12, which aims to raise a total of £15m across seven VCTs without a prospectus.
Patrick Reeve, managing partner, says: “The £5m applies to each individual VCT. We took legal advice that told us to look at each individual company in terms of this fundraising.”
But Baronsmead has delayed its first-ever linked offer as a result of legal advice that recommended it should consider the threshold in aggregate.
A spokesman says: “Our legal team advised that the £5m refers to fundraising for the whole offer. So our non-prospectus offer will be available in one document but it will describe each of the four VCTs as separate offers, raising up to £5m for each. Investors will have to subscribe to each offer in equal proportions.”
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