Council and Parliament agree on new act

The Council and the Parliament have reached a provisional agreement on the listing act, a package that will make EU public capital markets more attractive for EU companies and make it easier for companies of all sizes, including SMEs, to list on European stock exchanges.

The agreement will cut red tape and costs to help European companies of all sizes, in particular small and medium-sized enterprises, access more sources of financing.

This will encourage companies to get and remain listed on EU public markets. Easier access to public markets will allow companies to better diversify and complement available sources of funding.

The agreement found on the Listing Package will reduce the administrative burden for companies and contribute to making EU capital markets more attractive fully in line with the objectives of the capital markets union. It is important that we continue to encourage companies to list on the stock exchange while at the same time ensuring high levels of investor protection and market integrity throughout Union.

Vincent Van Peteghem, Minister of Finance of Belgium

The provisional agreement strikes a balance between alleviating ongoing disclosure requirements and maintaining market integrity and efficiency in the market abuse framework by narrowing down the scope of the disclosure obligation in case of protracted processes (multi-stage events). The immediate disclosure obligation no longer covers the intermediate steps of that process, instead, the issuers only need to disclose inside information related to the event that is completing the protracted process.

It also alleviates the investment research rules in order to increase the level of research on SMEs in the EU. This is important to inform potential investors about the prospect of investing in SMEs and improves the visibility of listed issuers.

The Council and the Parliament agreed that investment firms must ensure that the issuer-sponsored research they distribute is produced in compliance with the EU code of conduct.

The agreement also allows the re-bundling of payments for research and execution of orders.

The agreement between the Council and the Parliament reinforces cooperation and coordination between ESMA and the national competent authorities for instance on cooperation agreements with third countries. 

The directive on multiple-vote shares has also been provisionally agreed between the Council and the Parliament.

Next steps

The text of the provisional agreement will now be finalised and presented to member states’ representatives and the European Parliament for approval. If approved, the Council and the Parliament will have to formally adopt the texts.

Background

On 7 December 2022, the Commission put forward measures to alleviate – through a new listing package– the administrative burden for companies of all sizes, in particular SMEs, so that they can better access public capital market funding, without undermining market integrity and investor protection. The listing act package consists of:

• 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.

The proposal seeks to streamline the rules applicable to companies going through a listing process and companies already listed on EU public markets with an aim to simplify for the companies by alleviating their administrative burdens and costs, while preserving a sufficient degree of transparency, investor protection and market integrity.