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4 April 2023

The Requirement of "Comprehensibility" in a Prospectus

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Prior to publishing a prospectus, an Issuer must ensure that the information in the prospectus is complete, consistent, and comprehensible in order to obtain approval from the Danish Financial Supervisory Authority (“DFSA”).

The criteria to determine when these requirements are satisfied are set out in Article 36-38 in Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 (“Delegated Regulation”) supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council of 17 June 2017 (“Prospectus Regulation”). The DFSA may also establish criteria additional to those listed in articles 36-38 of the Delegated Regulation.

If the prospectus does not satisfy the requirement of comprehensibility, the DFSA may reject approval. On 28 March 2023, the DFSA issued a short form memo on the requirement for “comprehensibility” in a prospectus with the purpose of contributing to a better understanding of the underlying meaning of the requirement in practice.

Below is a short summary of the DFSA’s comments in relation to the specific criteria set out in Article 37 of the Delegated Regulation.

Dan Moalem

Partner

+45 30 37 96 10

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Joachim Buznicki Nørlem

Senior Associate

+45 30 37 96 02

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Kadir Kurt

Associate

+45 30 37 96 27

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