Oliver Brettle and Nicholas Greenacre discuss the difficulties created by the requirements of the Prospectus Directive.

Many employers have encountered problems with the European Union's Prospectus Directive (2003/71/EC) when offering participation in their employee share plans to staff in the EU. The Directive causes particular difficulties for multinational companies listed outside the EU offering shares to their EU employees. As a result of these difficulties, a number of companies have suspended operation of their plans in the EU. Some progress has been made in alleviating these difficulties, but concerns remain, especially in relation to varying interpretations of the Prospectus Directive requirements across the EU. This article explains the key issues.