In the case of ADCADA Immobilien AG PCC in Konkurs v the Financial Market Authority (Finanzmarktaufsicht) (Case E-10/20) (“ADCADA”) the European Free Trade Association Court considered whether the offer of securities to the public through publicity on the offering firm’s website was made in accordance with the exemption to the requirement to produce a prospectus per Article 1(4)(b) of the EU Prospectus Regulation 2017/1129 (the “Prospectus Regulations”), or in contravention of the Prospectus Regulations.


The Prospectus Regulation requires a prospectus to be drafted by or on behalf of the issuer and approved by the competent regulatory authority of an EU member state where:

  1. securities are offered to the public within the EU; and/or
  2. securities are admitted to trading on an EU regulated market.

The Prospectus Regulations define “offer of securities to the public” as a communication to persons in any form and by any means whereby such communication presents sufficient information (including the terms of the offer and the securities to be offered) to enable the investors to make a decision to purchase/subscribe.

Notwithstanding this, there are exemptions available to the requirement to produce a prospectus if certain criteria are met:

  1. the offer of securities is addressed exclusively to qualified investors;
  2. the offer of securities is addressed to fewer than 150 persons per member state (other than qualified investors);
  3. the denomination per unit for the securities amounts to at least €100,000; and
  4. the investors who acquire the securities do so for at least a total consideration of €100,000 (for each separate offer).


ADCADA, a real estate investment firm based in Liechtenstein, advertised on its own website and a third-party website, the offer of fixed interest bonds. ADCADA did not submit a prospectus for approval to the Financial Markets Authority (“FMA”) in Liechtenstein prior to offering the securities. The advertisement itself contained the following information:

  1. interest rate;
  2. interest payment terms;
  3. term; and
  4. minimum investment amount.


In a decision taken in June 2020, the FMA concluded that there had indeed been an offer to securities to the public and that ADCADA should have produced a prospectus in accordance with the Prospectus Regulations. In the absence of an approved prospectus, the bond issue was prohibited.

The FMA found that the description of the bonds on the website, and the provision of contact details for investors to enquire and receive further information and/or process the transaction fulfilled the requirements for there to have been an offer made to the public as the link between the promotion and purchase opportunity was clear and satisfied.

Additionally, the information made available by ADCADA was made without any restrictions by way of standard disclaimer wording meaning that the bond offer was made to an unlimited number of investors.


ADCADA appealed the decision made by the FMA and sought clarification from the EFTA court on four questions:

  1. what criteria governs the assessment of whether sufficient information has been provided on the terms of the offer, so as to enable an investor to decide whether to purchase or subscribe for securities?
  2. is the fact that the full bond terms are inaccessible online nor otherwise generally available, together with wording directing investors to get further information from another source, relevant to the assessment of whether there is a public offer?
  3. would an offer fall within the exemption if the issuer ensures that the full terms of the bond are only available on request and are only given to a maximum of 149 people per EEA state which are not qualified investors?
  4. if the offer is disseminated through various media, would that constitute a consolidated offer or several separate offers, which could each be offered to fewer than 150 people?


Offer of securities to the public

The EFTA Court reiterated the very purpose of the Prospectus Regulations to protect investors and the role that prospectuses play in enabling investors to evaluate the risks of the transaction. Therefore, the communication in question would have to contain a minimum amount of information relating to the terms of the offer. Notwithstanding this, simply the publication of an offer price would not, on its own, constitute an offer of securities to the public. In the case of ADCADA, where promotions for bonds were published on the internet, freely accessible to anyone, with the information as listed above, would be deemed sufficient information for the investor to evaluate the transaction before making a decision to invest.

Fewer than 150 persons

The EFTA Court found that where an offer of securities to the public has been published on the internet and is freely accessible to anyone, that offer is considered to be addressed to an unlimited number of people. The fact that the offer information has been disseminated through various media would not be permitted to allow a circumvention to the 150 person limit.


Despite ADCADA being an EU Case, the exemption provisions have been retained in the UK version of the Prospectus Regulations which has applied in the UK since the end of the Brexit transition period therefore it is still of relevance to UK firms.

To review the full case please click here.

For more information, and any guidance or advice on offering and marketing financial instruments within the UK and EU, Cleveland & Co External in-house counsel™, your specialist outsourced legal team, are here to help.