EU Listing Act – Impact for Irish ECM
On 14 November 2024 the EU Listing Act was officially adopted following its publication in the EU Official Journal.
The EU Listing Act is a legislative package comprising:
- a Regulation amending the Prospectus Regulation, the Market Abuse Regulation and the Markets in Financial Instruments Regulation (the “Listing Act Regulation”);
- a Directive amending the Markets in Financial Instruments Directive (MiFID II) and repealing the Listing Directive; and
- a Directive on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market (which in an Irish context includes Euronext Growth Dublin).
The aim of the package is to make EU public capital markets more attractive for EU companies, and to facilitate the listing of companies of all sizes, and particularly SMEs, on European stock exchanges.
As described below, a number of the EU Listing Act’s provisions came into force on 4 December 2024, with others due to become effective in 2026.
Prospectus Regulation
Secondary Issues
The prior EU prospectus regime provided an exemption from the requirement to produce a prospectus for issuers raising capital where the new shares to be admitted to trading represented less than 20% of the shares already admitted (taking into account any shares that were admitted over the previous 12 months). This was subject to the separate requirement to produce a prospectus for a public offer of shares where no equivalent exemption was afforded.
The EU Listing Act expands this exemption to 30% and introduces a new and complementary exemption for public offerings which represent less than 30% of the admitted securities, provided that the issuer is not subject to restructuring/ insolvency proceedings and a short summary document (up to 11 pages) is filed (but not approved) with the relevant competent authority.
Further, an additional prospectus exemption has been introduced by the EU Listing Act for offerings or listings (without a threshold/size limit) of issuers which have been admitted to trading continuously on any regulated market (or SME growth market) in the EU for the 18 months preceding the offering or admission. Again, issuers will be required to produce a short summary document to avail of this exemption. In addition, the new securities issued under this exemption cannot be issued in connection with a takeover or where the issuer is subject to restructuring/ insolvency proceedings. This is a very significant change and, in effect, means that the vast majority of secondary issuances no longer require the preparation of an EU prospectus (unless prepared voluntarily for other reasons).
In addition, from 5 June 2026 domestic offerings of securities to the public with a total aggregated consideration of less than €12 million (over a period of 12 months) will be exempt from the requirement to produce a prospectus (although Member States may opt to reduce the threshold to €5 million). The equivalent threshold in Ireland currently is €8 million.
Bookbuilding Period
Under the prior regime, where an IPO involved an offer to the public the prospectus was required to be available to the public at least six working days before the end of the offer. Under the EU Listing Act, the minimum period for which the prospectus must be available will be three working days.
Withdrawal Rights
The deadline for investors to withdraw their acceptances due to significant new factors, material mistakes, or material inaccuracies is extended under the EU Listing Act from two to three working days.
New Prospectus Formats and Simplification of Disclosure Requirements
From 5 March 2026:
- the “EU Follow-on prospectus” will replace the simplified prospectus for secondary issuances and the EU Recovery Prospectus; and
- the “EU Growth issuance prospectus”, will be available for SMEs and non-SMEs which have securities already admitted or are to be admitted to trading on an SME growth market (including Euronext Growth) replacing the current EU Growth prospectus.
From 5 June 2026:
- further standardisation of prospectus disclosure requirements will become effective (including with respect to language, order and page limitations), although delegated acts are to be published in due course which will set out the requirements in full;
- financial statements to be included in a prospectus must cover the last two years of financial information (currently, the requirement is to include three) for equity offerings; and
- delegated acts will specify which information issuers required to provide sustainability reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD) will need to disclose.
Prospectus Equivalence
The EU Listing Act provides for a simplified prospectus third-country equivalence regime under which the Commission will adopt delegated acts granting equivalence to the regulatory regime of the relevant third-country.
Timing of Changes
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Regulation / application |
Provisions |
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Entry into force: 4 December 2024 |
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15 months from the entry into force (5 March 2026) |
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18 months from the entry into force (5 June 2026) |
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Comment
These changes will permit Irish listed companies to raise large amounts of equity capital (including for use as acquisition currency) more easily than before and are to be welcomed. Companies will still need to consider the securities law regimes of other relevant jurisdictions when planning any large fundraisings, however, and we expect that Irish issuers will need to continue to be particularly mindful of the equivalent regimes in the UK (particularly for those with London listing) and the US (where market practice may mean that certain of the EU Listing Act’s reliefs are not adopted by the market).
Market Abuse Regulation
Disclosure of Inside Information
The EU Listing Act amends the requirement to disclose intermediate steps in a protracted process so that issuers will only need to disclose inside information to the market as soon as possible after the final event or circumstance in a protracted process has occurred.
Under the new regime, therefore, if an intermediate step in a protracted process is sufficiently “precise” the issuer will have inside information from that point, and will need to comply with its obligations under MAR with respect to that information (such as the requirement to create an insider list, prohibit dealings by insiders and take the other usual precautions around inside information), but the requirement to announce the information will not crystalise until the final step in the process is taken. It is important to note that the issuer will not be “delaying” making an announcement of the intermediate steps for the purposes of MAR, so it will not need to satisfy the conditions for delaying disclosure with respect to the intermediate steps.
This change will take effect on 5 June 2026 and delegated acts are expected be published in due course to provide further information on when a protracted process will be viewed as coming to an end.
Delaying Disclosure
Under the current regime, disclosure of inside information may be delayed by an issuer if, among other things, the delay is not likely to mislead the public. This condition will be replaced under the EU Listing Act with a condition that the inside information does not contradict the most recent previous public announcement by the company on the matter to which the inside information relates.
This change will take effect on 5 June 2026 and delegated acts are expected be published in due course to provide further information relating to the delay of an announcement of inside information under these circumstances.
Share Buybacks
The EU Listing Act provides (with effect from 4 December 2024) that issuers conducting share buy-back programmes will be required to only disclose aggregated daily trade information to the public (rather than the detailed trade-by-trade data previously required). Further, issuers will only be required to report transactions under a buy-back programme to the national competent authority of the most relevant market in terms of liquidity for its shares (rather than to all markets where the shares are traded).
PDMR Dealings
The EU Listing Act provides (from 4 December 2024) that a PDMR may be able to deal during a closed period where the dealing:
- does not involve any active investment decision by the PDMR;
- results exclusively from external factors or actions of third parties; or
- is a dealing based on pre-determined terms.
Further, the current €5,000 threshold for PDMR transaction reporting is increased to €20,000 (although national competent authorities may raise it to €50,000 or to decrease it to €10,000).
Market Soundings
Reflecting general market consensus, the EU Listing Act clarifies that the market soundings safe harbour from the offence of unlawful disclosure may be available even if all of the prescriptive criteria set out by MAR (and the relevant delegated acts promulgated under MAR) have not been followed.
Timing of Changes
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Regulation / application |
Provisions |
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Entry into force: 4 December 2024 |
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18 months from the entry into force (5 June 2026) |
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Comment
We expect that these amendments to MAR will be welcomed by the Irish issuer community. In particular, the amendments relating to the disclosure of intermediate steps in a protected process will give (when effective in June 2026) comfort to issuers taking on multi-stage processes and the aggregation of daily buy-back disclosures will alleviate some of the administrative burden shouldered by market participants when executing share buy-back programmes. We would note, however, that Irish issuers with a London listing will also need to be mindful of UK MAR (which has not been amended in the same way) when assessing disclosure obligations.
Other Changes
Free Float
The 2001 EU Listing Directive will be repealed as of 5 December 2026. While most of its provisions will be repealed without replacement, the requirement for for a minimum percentage of shares to be in public hands from admission will be required to be retained by Member States, but with the percentage reduced from 25% to 10%. Further “public” investors for the purpose of the free float requirement will no longer be required to be located in the EU or EEA.
Multiple Voting Rights
The EU Listing Act provides for the harmonisation among EU Member States of rules relating to multiple-voting share structures by requiring all Member States to ensure that a company seeking to IPO on an EU MTF (including Euronext Growth) is permitted to adopt a multiple-voting share structure. As part of these measures, Member States must by 5 December 2026 introduce legislation to provide for certain safeguards to investors (a maximum voting ratio or requirement that certain decisions by approved by a majority of all shareholders) and may provide others (such as “sunset” provisions or restrictions on who may hold multiple-voting shares).
Timing of Changes
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Regulation / application |
Provisions |
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18 months from the entry into force (5 June 2026) |
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Please contact your usual McCann FitzGerald LLP contact if would like to discuss any of the proposed changes under the Listing Act and/or their impact.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
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