The Listing Act – The European Union’s new legislative package aimed to facilitate for companies listing shares and companies acting in a listed environment

To facilitate for companies seeking to list shares or companies whose shares are already listed, the EU has adopted a new legislative package, the “Listing Act”. The Listing Act entail changes to the EU Prospectus Regulation, the EU Market Abuse Regulation, and the EU Regulation and Directive on markets in financial instruments (MiFIR and MiFID II), as well as the repeal of the EU Listing Directive. The Listing Act further introduces a new Directive for harmonising new rules on multiple-vote share structures.

In 2020, the European Commission presented a new extended action plan for the Capital Markets Union. A central core aim of the Capital Markets Union has been to improve access to market-based sources of financing for small and medium-sized companies as a complement to bank financing. In later years, several regulatory acts have been implemented and amended following this purpose. On 7 December 2022, the Commission presented a new initiative, the Listing Act, with the aim to reduce the administrative and financial burden, especially for small and medium-sized listed companies. The purpose is to make the capital markets within the EU a more competitive alternative for companies choosing to list on a public market.

Following the preparation and revision of the proposals by the EU institutions under the ordinary legislative procedure, they were published today, 14 November 2024, in the Official Journal of the European Union. The legislative package will enter into force in December 2024. The regulation shall be applicable from three different dates. Upon its entry into force, for example, the new prospectus exemptions (with the exemption of the new threshold for prospectus requirements), the clarified rules on market sounding and the extended exemptions from trading during a closed period will come into effect. On 5 March 2026, the possibility to prepare secondary issuance prospectuses, EU growth prospectuses and EU Recovery prospectuses will cease. Instead, EU growth issuance prospectuses and EU follow-up prospectuses can be prepared. From 5 June 2026, for example, the new threshold for prospectus requirement will be applied. In addition, the new rules on the disclosure of inside information a protracted process will also apply eighteen months after entry into force.

Regarding Directive (EU) 2024/2810 of the European Parliament and of the Council of 23 October 2024 on multiple-vote share structures in companies that seek admission to trading of their shares on a multilateral trading facility, Sweden must have implemented the provisions into national law by December 2026.

The Listing Act consists of three EU legal acts: (i) a Regulation on amendments to the Market Abuse Regulation [1] , the Prospectus Regulation [2], and MiFIR [3], (ii) a Directive amending MiFID II [4] and repealing the Listing Directive [5] , and (iii) a new Directive on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market (“Multiple-vote Directive”).

The following sections presents a selection of important amendments introduced by the Listing Act.

Changes to the Market Abuse Regulation

Below is a description of the main changes to the Market Abuse Regulation.

• An issuer will not be required to disclose insider information that constitutes an intermediate step in a multi-staged event, a so-called protracted process. Instead, the information will be disclosed in the final stage of the process. The background is that the legislator believes information disclosed at a very early stage and of a preliminary nature can mislead investors rather than contribute to accurate pricing and address information asymmetry. The European Commission is empowered to adopt a delegated act to establish an example list of “final events” in protracted processes that would trigger the obligation to disclose information. The meaning of the term “inside information” in Article 7 of the Market Abuse Regulation, however, is not amended and the prohibition on insider dealing will therefore continue to be triggered by an intermediate step of a protracted process that qualifies as inside information.[6]
• In regard to delaying disclosure of inside information, the current criterion that the delay of disclosure is not likely to mislead the public is clarified, meaning that delayed information must not be in contrast with the latest information disclosed by the issuer related to the subject matter. The European Commission is empowered to specify, in a delegated act, the cases in which this situation may arise.[6]
• In regard to transactions conducted by Persons Discharging Managerial Responsibilities or Persons Closely Associated (PDMR transactions), these shall be reported when exceeding EUR 20,000 within a calendar year, instead of the previous threshold of EUR 5,000. However, the Swedish Financial Supervisory Authority (Finansinspektionen) may decide to raise this threshold to EUR 50,000 or lower it to EUR 10,000 in Sweden. The Swedish Financial Supervisory Authority has not yet made such a decision.[7]

• The Listing Act clarifies the rules on market soundings in the Market Abuse Regulation. The definition of market soundings is expanded to include potential transactions, meaning that a transaction does not need to be announced in connection with the sounding. The changes also clarify that the market sounding regime is intended to provide protection against allegations of unlawful disclosure of inside information (so-called safe harbour). The new regulatory structure means that parts of the requirements related to market soundings are mandatory (including documenting in writing whether the sounding involves the disclosure of inside information and providing this documentation to the Swedish Financial Supervisory Authority upon request), while other parts of the requirements are voluntary (such as obtaining consent to receive inside information from the person receiving it during the sounding).[7]
• The current exemptions from the transactions during closed periods are being expanded, and the new exemptions refer, for example, to trades that do not relate to active investment decisions, or that the transaction result exclusively from external factors or actions by third parties.[7]

Changes to the Prospectus Regulation

Below is a description of some of the key changes to the Prospectus Regulation.

• The threshold exemption for the prospectus requirement is harmonised and set at EUR 12 million across the entire Union (the threshold in Sweden is currently EUR 2.5 million). However, Member States may choose to set the threshold at EUR 5 million instead. Whether Sweden will choose the lower threshold remains to be seen.[6]
• The so-called “20 percent exemption” (meaning that a prospectus does not need to be prepared when securities are admitted to trading on a regulated market if the new securities constitute less than 20 percent of the number of securities already admitted to trading within a twelve-month period) is increased to 30 percent and also applies, provided certain conditions are met, when securities are offered to the public. One of the conditions set forth is that a shorter information document must be registered with the Swedish Financial Supervisory Authority and published according to the usual disclosure rules in the Prospectus Regulation. [7]
• A new prospectus exemption is introduced for a large number of secondary issuances [8] in the market, meaning that the issuer, provided that certain conditions are met, only needs to prepare a short document with key information about the issuer and the offer. [7]
• Going forward, prospectuses will be more standardised and streamlined (i.e., a fixed sequence for the information in the prospectus).
• As a general rule, prospectuses in Sweden should be prepared in either Swedish or When securities are offered or admitted to trading on a regulated market solely within the Member State, Sweden has the option to decide that a prospectus must be prepared in Swedish. Whether Sweden will choose to do so remains to be seen.[6]
• The EU Growth prospectus is repealed and replaced by a standardised EU Growth issuance prospectus which, if prepared regarding shares, may be a maximum of 75 A4 pages. The EU Growth issuance prospectus can be prepared and published by, among others, small and medium-sized companies, provided the issuer does not have securities admitted to trading on a regulated market.[9]
• The secondary issuance prospectus is repealed, and the EU Recovery prospectus is replaced by a standardised EU Follow-on prospectus which, if prepared regarding shares, may be a maximum of 50 A4 pages.[9]

Changes to MiFID II and repeal of the Listing Directive

• The Listing Act also includes changes to MiFID II. One such change is that the minimum percentage of a class of shares that must be in the hands of public investors, so-called free float, at the time of listing and thereafter, is lowered from 25 to 10 percent. However, it also introduces – to ensure sufficient liquidity in the share – the possibility for Member States to set alternative requirements instead of the aforementioned percentage threshold, such as requiring a sufficient number of shares to be held by the public or that the shares are held by a sufficient number of shareholders. The aim is to enable member states to give issuers with more flexibility and to make the Union’s capital markets more competitive.
• The Listing Directive (which is a so-called minimum harmonisation directive) is repealed to achieve a uniform regulatory framework at the Union level.

New directive on multiple-vote share structures in companies that seek the admission to trading of their shares on an sme growth market

The new directive will enable companies listing on SME growth markets for the first time to have a multiple-vote share structure. As is well known, shares with different voting rights are already common in Sweden. To protect the interests of minority shareholders and the company, certain measures are proposed, including provisions that decisions to adopt or amend a multiple-vote share structure must be made by the general meeting with a qualified majority, which is already required in Sweden according to the Companies Act. Voting should take place separately for each class of shares whose voting rights are affected by the decision.

The proposed directive aims to enhance the attractiveness of SME markets and reduce inequalities between companies seeking entry to the internal market. The proposal is intended to help remove barriers to listings.

Setterwalls’ comments

The Listing Act involves extensive changes to several key regulations in the European capital market. Several of the amendments are expected to facilitate and lead to cost savings for companies, especially in connection with raising capital. An initiative to create improved financing opportunities for companies and to strengthen the competitiveness of the capital markets within the EU is considered to be of great importance, but Setterwalls also wants to emphasize the importance of a robust regulatory system that ensures a well-functioning capital market. Alleviations and simplifications of the regulatory frameworks on the capital markets are desirable provided that the investor protection remains high and that adequate access to information and strong confidence in the capital markets are maintained. Setterwalls has monitored the legislative process of the Listing Act and assesses that the final and adopted proposals balance these interests well. For further information or questions, you are welcome to contact Setterwalls’ capital markets team.

[1]  Regulation No 596/2014 of the European Parliament and of the Council.

[2] Regulation (EU) 2017/1129 of the European Parliament and of the Council.

[3] Regulation No 600/2014 of the European Parliament and of the Council.

[4] Directive 2014/65/EU of the European Parliament and of the Council.

[5] Directive 2001/34/EC of the European Parliament and of the Council.

[6] Shall apply from 5 June 2026.

[7] Shall apply from December 2024.

[8] Offers of securities of the same kind as securities that have been already admitted to trading on a regulated market or an SME growth market continuously for at least 18 months.

[9] Shall apply from 5 March 2026.