Approval of the Listing Act: Welcome Changes for Issuers of Debt Securities
The EU Listing Act, approved by the EU Council on October 8, 2024, and entering into force on December 4, 2024, introduces key changes to the EU Prospectus Regulation, offering greater flexibility for issuers of debt securities, including exemptions from certain prospectus requirements, expanded disclosure options, and increased thresholds for prospectus exemptions.
The Listing Act, approved by the EU Council on October 8, 2024, and published in the Official Journal of the EU on November 14, 2024, introduces modifications to the EU Prospectus Regulation, providing more flexibility to issuers of debt securities. The Listing Act will enter into force 20 days after its publication (i.e., December 4, 2024), and most changes will apply as from that date.
An issuer of debt securities will be exempt from the requirement to prepare a supplement to a base prospectus to incorporate new annual or interim financial information if such information is made available within the 12-month period for which the base prospectus is valid (unless such issuer decides to prepare a supplement on a voluntary basis). The period to withdraw acceptances to purchase or subscribe securities is increased from two to three working days following the publication of a supplement. The list of documents that can be incorporated by reference has been widened to include ESG disclosure, in line with the provisions of the EU Green Bond Regulation. (Read our Alert, The EU Green Bonds Regulation Is (Almost) Live.)
The Listing Act also introduces other significant modifications for debt capital markets, such as standardizing the format and content of prospectuses, removing the obligation to rank the most material risk factors, introducing a new EU Follow-on prospectus for secondary issuances and an EU Growth issuance prospectus.
Amongst the novelties, the Listing Act expands existing prospectus exemptions. It introduces a harmonized threshold of €12 million per issuer over a 12-month period (up from €8 million today), allowing each Member State to opt for a threshold of €5 million instead and requires a corresponding public document or summary of a prospectus.
Secondary issuances—subsequent issuances of securities fungible with those already listed on a regulated market or a SME growth market—would not require a prospectus, notably when the offer or admission represents less than 30% (up from 20% today) of the already listed securities over a 12-month period.
The total aggregated consideration threshold for the prospectus exemption for credit institutions issuing in a continuous or repeated manner has been raised from €75 million to €150 million.
