EU Listing Act: Streamlining Access to Capital Markets
On 8 October 2024, the Council of the European Union adopted the Listing Act, a legislative package of reforms designed to make it easier and more attractive for companies to list on EU public markets.
The EU Listing Act comprises:
- a regulation amending the prospectus regulation, market abuse regulation and the markets in financial instruments regulation;
- a directive amending the markets in financial instruments directive and repealing the listing directive;
- a directive on multiple-vote shares.
Key Changes for Issuers
- Prospectus Regime: Changes include amending the thresholds and expanding the exemptions for the requirement to publish prospectuses, reducing the length and complexity of prospectuses (through the introduction of standardised formats, standardised sequence of information and page limits), creating a shorter form ‘EU Follow-on prospectus’ for secondary issuances, and easing the requirements on ‘EU Growth’ prospectuses.
- Enhanced Flexibility: The legislation introduces greater flexibility by allowing issuers to incorporate information from their management report into the prospectus and providing more clarity on the disclosure of inside information in protracted processes.
- Multiple-Vote Share Structures: In a move aimed at attracting high-growth companies, the Listing Act allows for the listing of companies with multiple-vote share structures under certain conditions, providing founders with greater control.
Implications for Market Participants
The Listing Act has significant implications for a wide range of market participants, including:
- Issuers: Companies, particularly SMEs, will benefit from a streamlined listing process, reduced costs, and increased flexibility.
- Investors: Investors will continue to receive the necessary information to make informed investment decisions, while also benefiting from a more dynamic and diverse market.
Next Steps
The EU Listing Act comes into force 20 days after its publication in the Official Journal of the EU. The regulation component of the EU Listing Act is directly applicable in all Member States. The new public disclosure of inside information regime, with respect to intermediate steps in a protracted process, will only become applicable 18 months after entry into force of the regulation.
The directive components of the EU Listing Act will have to be transposed into national law by each Member State. Member States have 18 months to transpose the amendments effected to MiFID II and 2 years to transpose the directive on multiple-vote shares.
How we can help
Our team of capital markets experts is closely monitoring the implementation of the EU Listing Act and can advise clients on all aspects of this new regulatory framework. We can assist with:
- Prospectus drafting and review
- Compliance with market abuse regulation requirements
- Structuring multiple-vote share offerings
- Navigating the new listing rules
Please contact our Corporate Practice for more information.