EU Listing Act Package Effective Early December: What You Need to Know
The EU Listing Act Package is set to go into effect in early December, bringing with it a number of amendments to key regulations like the Prospectus Regulation, Market Abuse Regulation, and Markets in Financial Instruments Regulation. These changes aim to make public markets more appealing for EU companies and to make it easier for small and medium-sized companies to access capital.
One of the major goals of the Listing Act is to reduce regulatory and compliance costs for companies looking to list on public markets. By streamlining the listing process and enhancing legal clarity, the hope is to encourage more companies to list and, in turn, diversify funding sources, boost investments, stimulate economic growth, create jobs, and drive innovation in the EU.
Key amendments to the Prospectus Regulation include more standardized and streamlined prospectus requirements for primary issuances. This means that there will be set formats and sequences for disclosure in prospectuses and summaries, with a page limit of 300 pages for IPO prospectuses. Additionally, ESMA will develop guidelines on the use of plain language in prospectuses to make them more understandable.
Another important change is the adoption of CSRD and ESG disclosure requirements. This means that issuers will need to consider sustainability reporting requirements and ESG factors when preparing prospectuses for both equity and non-equity securities.
To improve the efficiency of prospectus requirements, risk factors will need to be specific and clearly explained to give investors a clear picture of potential risks. Materiality of risk factors may be disclosed using a qualitative scale of low, medium, or high.
Overall, the EU Listing Act Package represents a significant step towards making public markets in the EU more attractive and accessible for companies of all sizes. These changes are designed to encourage more companies to list and to promote economic growth and innovation in the region.
