European Union: The European Parliament And The Council Agree On The "Listing Act"

On 7 December 2022, the European Commission submitted a proposal for a "Listing Act" containing amendments to, among others, the Prospectus Regulation (2017/1129), the Market Abuse Regulation (596/2014), MiFiD II (2014/65) and MiFIR (600/2014). The purpose of the legislative package is to create easier access to European capital markets, for example by making listing on the markets more attractive and cutting red tape on listed companies and reducing their costs – primarily for the SME segment.

We find it relevant to highlight the following proposed amendments:

• The prospectus obligation threshold is increased in offers of securities to the public: Today, Member States may decide to exempt offers of securities to the public from the obligation to publish a prospectus, if the total value of such offer in the EU is less than EUR 8 million over a period of 12 months. This threshold is increased to EUR 12 million. Such change to the threshold will also require implementation in the individual Member States. In Denmark, the threshold is today EUR 8 million.
• Secondary issuance becomes simpler: Today, there is no obligation to publish a prospectus for the admission to trading on a regulated market of securities fungible with securities already admitted to trading on the same regulated market, provided that they represent, over a period of 12 months, less than 20% of the number of securities already admitted to trading on the same regulated market. This percentage is increased to 30%. A similar exemption is proposed in respect of offers of securities to the public. A further proposed exemption from the prospectus requirement concerns offers of securities fungible with securities that have been admitted to trading on a regulated market or an SME growth market continuously for at least 18 months prior to the offer, provided that a number of conditions are met.
• The length of the offer period in an IPO: The minimum offer period in an IPO is reduced from six to three business days.
• The prospectus length is reduced: It is proposed to reduce the number of pages in a prospectus that relates to shares to 300 A4 pages, with exemptions for e.g. issuers that have a complex financial history.
• "Follow-on prospectus" is introduced: The simplified prospectus will be replaced by a new "follow-on prospectus" that is intended to standardise the process of preparing such prospectuses.
• Inside information: The rules on inside information are adjusted so that intermediate steps in a protracted process no longer need to be disclosed to the public until the process has been finalised.
• Reporting obligations of persons discharging managerial responsibilities: The limit for the reporting of transactions by persons discharging managerial responsibilities is increased from EUR 20,000 to EUR 50,0000. However, the limit is determined by the national authorities, so national legislation will need to be amended too. Today, the limit in Denmark is EUR 20,000.

The wording of the Listing Act will now be finalised and submitted to Member State representatives and the European Parliament for approval. If approved, the Council and the European Parliament will formally adopt the legislative package. We will follow developments closely and are ready to assist you if you have questions about the prospectus requirements or about capital market law in general.