Key Elements of the Listings Act 2024

The aim of the Listing package is to 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. Within the scope of the work of the Department of Finance, the Listings Act covers a range of policy and technical areas within primary capital markets legislation and includes a Regulation (amending the Prospectus Regulation, the Market Abuse Regulation and the Markets in Financial Instruments Regulation) and a Directive (incorporating adjustments to the Markets in Financial Instruments Directive and repealing the Listing Directive).

Key measures introduced in the Act are listed below.

Facilitating smaller issuances and smaller issuers 

• It provides for the harmonisation of the threshold under which there is an exemption from the requirement to publish a prospectus. The threshold under which the exemption would apply is for small offers of securities to the public, that is, under €12m., It also provides for Member States to opt for a lower exemption threshold of €5m. The current exemption threshold in Ireland is €8m and changes to domestic disclosure requirements will be subject to this consultation process.
• Introduces rules regarding the EU growth issuance prospectus for SME issuers, with lighter disclosure requirements, and
• Alleviates 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.

Repeal of the Listing Directive and transfer of provisions to MiFID II

• The Listings Act repeals the Listing Directive introduced in 2001 in order to coordinate the rules on the admission of securities to official stock exchange listings. Many provisions of the Directive have become redundant over time. In practice this means that the concept of ‘admission to official listing’ will no longer exist in Union law and will be replaced by ‘admission to trading on a regulated market’. However, Member States including Ireland will retain the ability to provide for and regulate such regimes under national legislation.

Disclosures and prospectus amendments

The Listings Act aims to improve the disclosures process to support retail investors in better understanding and navigating through the prospectus. This will be achieved by

•  Standardising the prospectus content and format and facilitating a more engaging prospectus summary through the use of charts, graphs or tables.
• In recognition of the digitalisation of financial markets and sustainability goals, the prospectus can now be delivered to investors in electronic format.
• Measures to facilitate third country issuances (including SMEs) on EU public markets are included. This applies where the prospectus rules in the third country are deemed equivalent to the EU, and continues to ensure investor protection. The Act also includes provisions for reinforced coordination between ESMA and National Competent Authorities (NCAs), on cooperation agreements with third countries.
• Updates to the scope and application of scrutiny and approval of the prospectus by NCAs are provided for.
• The expansion of exemptions and simplified regime for secondary issuances, with the purpose of making them less costly. The Act introduces a range of simplifications, or exemptions from, the prospectus requirements in cases where the issuer is already known to investors and a fair amount of information is already publicly available i.e. in the case of secondary or follow-on issuances.

Improving the functioning of the EU market abuse regime

• The Act aims to strike 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 the case of a protracted processes. For example, 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.
• The text introduces a mechanism whereby supervisory authorities can exchange order data from markets with a high level of cross border activity in order to enhance the effectiveness of supervision.
• Other measures include providing further legal clarity regarding the disclosure of inside information in certain circumstances and simplification of requirements on insider lists and disclosure-related infringements within the Market Abuse Regulation.