The EU Listing Act enters into force today

The EU Listing Act was published in the official journal 14 November 2024 and consists of (i) a regulation amending the Prospectus Regulation (Regulation (EU) 2017/1129), Market Abuse Regulation (Regulation (EU) 596/2014) and MiFIR (Regulation (EU) 600/2014) (the "Listing Regulation"), (ii) a directive amending MiFID II (Directive (EU) 65/2014) and repealing directive 2001/34/EC (the "Listing Directive"), and (iii) a new directive on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market. 

Expansion of prospectus exemptions

The Listing Regulation introduces additional exemptions from the obligation to publish a prospectus in relation to public offers and admissions to trading on a regulated market. 

In many cases where a prospectus is exempted, the new regulation instead requires the issuer to file a standardised document following the structure set out in a new Annex IX (below referred to as the "Annex IX Document"). The Annex IX Document needs to be filed (but not approved) by the competent authority in the home Member State, which is the Swedish FSA (Sw. Finansinspektionen) in Sweden, and may not be longer than 11 pages. An Annex IX Document shall include e.g. use of proceeds, risk factors and terms and conditions for the offer. In addition, the Annex IX Document shall include a statement of continuous compliance with reporting and disclosure obligations throughout the period of being admitted to trading. 

An issuer who is covered by the prospectus exemptions outlined below, may still voluntarily draw up a prospectus in accordance with the current Prospectus Regulation. 

The fungible securities exemptions in relation to public offerings and admission to trading on a regulated market, as outlined below, will apply from today, 4 December 2024. The offer size exemption for public offers outlined below will apply from 5 June 2026. 

Exemptions from publishing a prospectus in relation to public offers

• Fungible securities exemption with volume restriction: Issuers will be exempted from publishing a prospectus if: (i) the issuer already has fungible securities admitted to trading on the same regulated market or SME growth market, (ii) the offer represents less than 30 percent of the number of securities already admitted to trading, over a 12-month period, (iii) the issuer is not subject to insolvency proceedings or a restructuring, and (iv) an Annex IX Document is filed with the competent authority. 
• Fungible securities exemption for securities listed for at least 18 months: Issuers will be exempted from publishing a prospectus if: (i) the issuer already has had fungible securities admitted to trading on a regulated market or an SME growth market continuously for at least the 18 months preceding the offer of the new securities, (ii) the securities are not issued in connection with a takeover, (iii) the issuer is not subject to insolvency proceedings or a restructuring, and (iv) an Annex IX Document is filed with the competent authority. 
• Offer size exemption: Public offers below EUR 12 million, calculated over a 12-month period, will be exempted from publishing a prospectus. However, the Member States will retain discretion to apply a lower threshold of EUR 5 million. The current threshold applicable in Sweden is EUR 2.5 million. If a prospectus is exempted under this rule the Member States may instead require that the issuer files a prospectus summary in accordance with Article 7 of the Prospectus Regulation, or a document containing information requirements set out at a national level, provided that the extent and level of information is equivalent or lower than the information required in a prospectus summary according to Article 7. 

Exemptions from publishing a prospectus in relation to admission to trading on a regulated market

• Fungible securities exemption with volume restriction: Issuers will be exempted from publishing a prospectus if: (i) the issuer already has fungible securities admitted to trading on the same regulated market, and (ii) the securities to be admitted to trading represent less than 30 percent of the number of securities already admitted to trading, over a 12-month period. The current threshold is 20 percent. 
• Fungible securities exemption for listed for at least 18 months: Issuers will be exempted from publishing a prospectus if: (i) the issuer already has had fungible securities admitted to trading on a regulated market continuously for at least the 18 months preceding the admission to trading of the new securities, (ii) the securities are not issued in connection with a takeover, (iii) the issuer is not subject to insolvency proceedings or a restructuring, and (iv) an Annex IX Document is filed with the competent authority. 

The Listing Regulation introduces new prospectus types which will replace the simplified prospectus for secondary issuances (article 14), the EU recovery prospectus (article 14a) and the EU growth prospectus (article 15) in the current Prospectus Regulation.

The new prospectus types will apply from 5 March 2026. Before the new prospectus types enter into force, the Commission shall adopt a delegated act specifying the standardised format and sequence for the new prospectus types. 

EU follow-on prospectus

A new EU follow-on prospectus is introduced which may be used for both public offers and admissions to trading on regulated markets of securities that are fungible or not fungible with securities already admitted to trading. The EU follow-on prospectus may also be used for up-listings, i.e. admission to trading on a regulated market when the financial instrument has already been admitted to trading on an SME growth market. The EU follow-on prospectus shall have a maximum length of 50 pages (not taking into account the summary, information incorporated by reference and any additional information due to complex financial history or a significant financial commitment).

The following persons are eligible to draw up an EU follow-on prospectus: 

1. issuers whose securities have been admitted to trading on a regulated market continuously for at least the 18 months preceding the offer or admission to trading on a regulated market of the new securities,
2. issuers whose securities have been admitted to trading on an SME continuously for at least the 18 months preceding the offer of the new securities, 
3. issuers who seek admission to trading on a regulated market of securities fungible with securities that have been admitted to trading on an SME growth market continuously for at least 18 months preceding the admission to trading of the securities, and
4. offerors of securities admitted to trading on a regulated market or an SME growth market continuously for at least the 18 months preceding the offer of securities to the public.
    

However, an issuer having only non-equity securities admitted to trading on a regulated market or an SME growth market shall not be allowed to draw up an EU follow-on prospectus for the admission to trading of equity securities on a regulated market.

EU growth issuance prospectus

A new EU growth issuance prospectus is introduced. The EU growth issuance prospectus can be used for public offers, provided that the issuer has no securities admitted to trading on a regulated market, i.e. typically IPOs. The prospectus shall be a maximum of 75 pages (not taking into account the summary, information incorporated by reference and any additional information due to complex financial history or a significant financial commitment).

The following persons are eligible to draw up an EU growth issuance prospectus: 

1. SMEs,
2. issuers whose securities are admitted to trading on an SME growth market, and
3. issuers, where the total aggregated consideration for the securities offered to the public is less than EUR 50 million calculated over a 12-month period, and provided that such issuers have no securities traded on an MTF and the average number of employees during the previous financial year did not exceed 499.
    

Standardisation of prospectuses

The following new requirements will apply from 5 June 2026.

• All prospectuses shall have a standardised format, and the information shall be presented in a standardised sequence. The Commission shall adopt delegated acts regarding the standardised format and sequence and schedules defining the specific information to be included in a prospectus. 
• Share prospectuses are limited to a maximum of 300 pages. The page limit excludes the summary, information incorporated by reference and any complex financial history or additional financials due to significant financial commitment.

The key amendments to the Market Abuse Regulation relate to delayed disclosure of inside information, insider trading reporting obligations and market soundings.

Delayed disclosure of inside information 

The following new requirements will apply from 5 June 2026.

• In a protracted process, only the final circumstances or event shall be disclosed as soon as possible after they occur, i.e. the obligation to disclose inside information shall not apply to intermediate steps in a protracted process. 
• The conditions for delayed disclosure of inside information are clarified. The previous requirement that the delay of disclosure is "not likely to mislead the public" has been replaced with "not in contrast with" the issuer's latest public announcement or other communications on the same matter. Intermediate steps in a protracted process are not subject to the requirements for delayed disclosure of inside information. Furthermore, ESMA shall establish a non-exhaustive list of what may be considered a legitimate interest for delayed disclosure of inside information. 
   

Insider trading reporting obligations for persons discharging managerial responsibilities (PDMRs)

The following new requirements will apply from today, 4 December 2024.

• The threshold for transaction reporting is raised to EUR 20,000 (previously EUR 5,000). The the competent authority in the home Member State may increase the threshold to EUR 50,000 or decrease it to EUR 10,000. The Swedish FSA has announced that the threshold of EUR 20,000 will be applicable in Sweden until further notice. 
• PDMRs are allowed to trade during closed periods in case of transactions or trade activities that do not relate to active investment decisions undertaken by the PDMR, or that result exclusively from external factors or actions of third parties, or are transactions or trade activities, including the exercise of derivatives, based on predetermined terms. 
   

Market soundings

The following new requirements will apply from today, 4 December 2024.

• It is clarified that the market sounding regime is optional for disclosing market participants and entail the protection from the allegation of unlawful disclosure of inside information. Furthermore, it is clarified that there is no presumption that a disclosing market participant that does not comply with the market sounding regime has unlawfully disclosed inside information when conducting market sounding, however, such participant shall not be able to take advantage of the protection afforded to market participants that do comply with the market sounding regime. 
• The current definition of market sounding is expanded to include information to potential investors not followed by any specific announcement of a transaction. 
• The obligation to analyse and record whether inside information has been communicated (MAR, Article 11.3) and the obligation to inform recipients when the information has ceased being inside information (MAR, Article 11.6) is mandatory to all disclosing market participants regardless of whether they choose to comply with the market sounding regime. 
• The obligation to inform recipients when the information has ceased to be inside information shall not apply if the information has been publicly announced.

The Member States shall by 5 June 2026 adopt necessary laws and regulations to comply with the Listing Directive. 

• The minimum free float requirement for admission to trading on a regulated market is reduced from 25 to 10 percent. Furthermore, the previous geographical restriction of the free float requirement to the EU/EEA is removed, i.e. investor outside the EU/EEA may also be considered when calculating the free float. 
• The Member States have some discretion regarding how the free float requirement is implemented.