The EU Listing Act has been published

On October 8, 2024, the European Council has approved the Listing Act, a package of legislative measures which (i) reviews the Prospectus Regulation, the Market Abuse Regulation, MiFIR and MiFID II, (ii) introduces a new directive harmonizing the regulation on multiple vote share structures, and (iii) repeals the Listing Directive (see definitions below).

The Listing Act aims to further develop the Capital Markets Union the purpose of which is to make public capital markets more attractive and accessible for companies, especially small and medium-sized enterprises ("SMEs") with the objective of diversifying funding sources other than bank lending. 

The pieces of legislation forming the Listing Act

• Directive (EU) 2024/2811 (the "Listing Act Directive") that (i) amends Directive 2014/65/EU ("MIFiD II") and (ii) repeals Directive 2001/34/EC on the admission of securities to official stock exchange listing and on information to be published on those securities (the "Listing Directive");
• Regulation (EU) 2024/2809 (the "Listing Act Regulation") that amends (i) Regulation (EU) 2017/1129 (the "Prospectus Regulation”), (ii) Regulation (EU) No 596/2014 (the "Market Abuse Regulation" or "MAR") and (iii) Regulation (EU) No 600/2014 ("MIFIR"); and
• Directive (EU) 2024/2810 (the "MVS Directive") on multiple-vote share structures in companies that seek the admission to trading of their shares on a multilateral trading facility ("MTF").

The Listing Act introduces the following main changes

• The Listing Directive. The Listing Directive has been largely dismantled over the years, with most of its rules now incorporated into other EU legal instruments. Consequently, with the Listing Act it has been repealed, and the conditions for admitting shares to a regulated market have been transferred to MiFID II. Furthermore, admission to listing has been simplified by reducing the minimum free float requirements at the time of admission from 25% to 10% without any geographical restriction within the EU/EEA area.
  
  Entry into force. The provisions will enter into force on December 5, 2024, and the changes will need to be implemented by Member States (including Spain) by June 5, 2026 and apply starting June 6, 2025.

• MiFID II. In order to increase the level of investment research on SMEs, the rules on investment research have been amended mainly to (i) include a mandate for fairness, clarity, and non-misleading content in research, (ii) provide for issuer-sponsored research to adhere to an EU code of conduct ensuring independence and conflict of interest management, (iii) remove the previous minimum market capitalization threshold of €1million required for firms to bundle research and brokerage service prices,  and (iv) exclude trading commentaries and advisory services linked to execution from being classified as research.
  
  Entry into force. The provisions will enter into force on December 5, 2024, and the changes will need to be implemented by Member States (including Spain) by June 5, 2026 and apply starting June 6, 2025.

• Prospectus Regulation. The changes to the Prospectus Regulation aim at simplifying and standardizing the form and content of the prospectus, the preparation of which is perceived as a lengthy, complex and expensive process. The Listing Act Regulation attempts to achieve this by (i) introducing additional exemptions from the need to publish a prospectus and expanding on existing exemptions, (ii) introducing the EU Follow- on Prospectus for secondary issuances by companies already admitted to trading on a regulated market or a SME growth market, (iii) replacing the EU Growth Prospectus with the EU Growth Issuance Prospectus simplifying the prospectus for SMEs, and (iv) further standardizing and simplifying the prospectus content and form to make it easier to compare.
  
  Entry into force. Generally, the amendments to the Prospectus Regulation will apply from December 4, 2024. However, certain (significant) provisions will not start applying before 2026. Prospectuses approved 18 months minus one day from the date of entry into force of the amending regulation shall continue to be governed by the provisions of the previous Regulation until the end of their validity. A similar regime applies for EU follow-on prospectuses and EU growth issuances prospectuses, but the grandfathering period applies until 15 months minus one day from the date of entry into force of the Regulation.
  
  For more details refer to the Legal Flash | Changes to the Prospectus Regulation made by the EU Listing Act.

• Market Abuse Regulation. The market abuse regime is updated to simplify and clarify the rules for the disclosure of inside information in protracted processes, review and clarify the market sounding safe harbor, change the reporting thresholds for persons discharging managerial responsibilities (PDMRs) (in particular, in relation to the notification requirements and applicable thresholds during restricted and black-out periods) and introduce a sanctioning system proportionate to the size of the relevant company.
  
  Entry into force. The amendments to MAR will apply from December 4, 2024, except for the provisions regarding disclosure of inside information in a protracted process and delaying disclosure, that will apply from June 5, 2024.
  
  For more details refer to the Legal Flash | Listing Act: new developments concerning market abuse.

• MVS Directive. The new directive on multiple-vote share structures introduces a minimum level of harmonization in the EU on multiple-vote shares structures, allowing these for companies seeking to list their shares on a MTF for the first time provided that they meet certain requirements and safeguards. The MVS Directive, at the same time allows Member States to expand the use of MVS structures in other circumstances as for example, companies listed on regulated markets or for private companies that don’t list their shares. The aim is to reduce the current fragmentation of national regulations and enhance the attractiveness of MTFs and the diversification of financing options especially for SMEs.
  
  Entry into force. The MVS Directive will enter in force on December 5, 2024, and will have to be implemented by June 5, 2026.
  
  For more details refer to the Legal Flash | Multiple-vote shares: EU promotes minimum harmonization.