BETTER FINANCE welcomes ESMA’s Call for Evidence on civil liability provisions under the Prospectus Regulation (PR). This consultation presents a critical opportunity to harmonise liability rules across Member States, addressing disparities that weaken investor protection and hinder the efficiency of EU capital markets. Divergences in fault standards, limitation periods, recoverable damages, and procedural rules create significant barriers to cross-border redress for retail investors and impose unnecessary compliance burdens on issuers.
BETTER FINANCE strongly supports harmonising liability standards to strengthen investor confidence, foster cross-border financial integration, and reduce regulatory fragmentation. Key recommendations include the establishment of a uniform 5 to 10-year statute of limitations for initiating claims, complemented by a 15-year limitation period to preserve underlying rights. This dual framework would provide retail investors with sufficient time to bring forward claims, particularly in complex prospectus cases where issues may surface years after issuance. Harmonising these rules would also simplify cross-border claims, instil investor confidence, and create a more consistent redress framework across Member States.
Moreover, BETTER FINANCE underscores the urgent need to address the disparity between the Markets in Crypto-Assets Regulation (MiCA) and traditional securities frameworks, such as the PR and the Market Abuse Regulation (MAR). MiCA provides clearer liability standards, which risks incentivising speculative digital investments at the expense of real economy financing. Aligning and strengthening liability provisions across these frameworks is essential to maintaining market trust, fostering fair competition, and ensuring that capital flows support productive investments.
Finally, BETTER FINANCE offers views on the potential introduction of an EU-wide safe harbour provision for forward-looking statements. While such a framework could enhance transparency, it must include stringent safeguards to protect investors. Safe harbour protections should apply only to factual, clear, and specific statements, accompanied by detailed risk disclosures. Protections must void automatically if statements are misleading, omit material information, or involve recklessness or wilful misconduct. High-risk contexts, including IPOs, SPAC-related issuances, and certain ESG claims prone to greenwashing, should be excluded or clearly defined to preserve investor trust.
Harmonising liability rules under the PR should take precedence, providing a foundation for a unified and effective redress mechanism across the EU. A tailored safe harbour provision could complement this framework if it upholds transparency and accountability. Together, these measures would promote cross-border participation, strengthen the integrity of EU capital markets, and ensure investor protections remain robust. BETTER FINANCE reiterates that stronger investor protections – not diluted accountability – are key to fostering trust, competitiveness, and increased retail participation in both primary and secondary markets.
⬇️Read and Download the Consultation Response ⬇️