Simplified prospectus rules coming – the Listing Act legislative package

The Listing Act entail amendments to a number of legislative frameworks in the European capital markets, including the Prospectus Regulation (2017/1129), the Market Abuse Regulation (596/2014) and the Directive on Markets in Financial Instruments (2014/65) (MiFID II), as well as repeal of the Listing Directive (2001/34) and introduction of a new Multiple Voting Rights Directive (COM/2022/761 final). Selected amendments to the legislative frameworks are summarised below. 

Changes to the prospectus regulation

• A new exemption from the obligation to prepare an EU prospectus when a public offer of securities fungible with securities already admitted to trading on a regulated market (Euronext Oslo Børs or Euronext Expand) or an SME growth market (currently no such Euronext Oslo Børs market) represents less than 30% of the existing securities already admitted to trading on such market, calculated over a 12 months' period. 
• The current threshold of 20% in the existing prospectus exemption for admission to trading of fungible securities on a regulated market will be increased to a corresponding 30%. This means that both public offers and admission to trading of securities not exceeding the 30% threshold under certain conditions will be exempted from the obligation to prepare an EU prospectus. Instead, a new short-form document must be filed, however not approved, with the National Competent Authority (in Norway the NFSA) of the issuer's home member state.
• A new exemption to the obligation to prepare an EU prospectus when the original securities have been admitted to trading continuously for at least 18 months on a regulated market (or an SME growth market), regardless of the size of the public offering or admission to trading. The exemption will be applicable under certain conditions and a short-form document must be filed (as above).
• Under current Norwegian legislation, issuers may prepare a more simplified national prospectus (not an EU prospectus) in case of offers of securities to the public with a total consideration of less than EUR 8 million, calculated over a 12 months' period. With the Listing Act, this threshold will be increased to EUR 12 million, provided however that each member state may set the threshold at EUR 5 million. It is currently uncertain which threshold that will be implemented in Norway.
• The simplified prospectus for secondary issuances will be replaced with a standardised EU "Follow-on" prospectus, of a maximum of 50 pages, for offerings and admissions to trading on a regulated market applicable to several categories of issuers with securities admitted to trading on a regulated market (or SME growth market) for 18 months. 
• For SMEs or issuers with securities admitted or to be admitted to trading on a SME growth market (currently no such Euronext Oslo Børs market) and certain issuers where the total consideration for offerings is less than EUR 50 million over a 12 months' period, the EU Growth prospectus will be replaced by a new lighter EU Growth Issuance Prospectus, of a maximum of 75 pages.
• Prospectuses will in general be more standardised and streamlined.
• Stricter rules regarding risk factors in the prospectus that are generic and further requirements to disclose ESG-related issues in the prospectus.
• The language requirements for equity and retail denomination debt prospectuses will become more flexible.

Changes to the market abuse regulation (MAR)

• Under current legislation, a number of conditions shall be fulfilled in order for an issuer to resolve delayed disclosure of inside information. The current condition that "the delay should not mislead the public" will be replaced by a less generic condition that "the information is not in contrast with the latest public announcement or other type of communication by the issuer on the same matter". The revised condition is a codification of ESMA's guidelines on delayed disclosure. 
• The obligation to disclose inside information regarding intermediate steps in a protracted process will be removed. This means that information about a particular circumstance or event constituting an intermediate step (e.g. during negotiations of an agreement) no longer need to be disclosed until the process has been finalised. Hence, there will be no MAR requirement to apply the procedure of delayed disclosure in relation to such intermediate steps. However, the confidentiality obligation and prohibition of insider dealing still apply to intermediate steps that qualify as inside information.
• The minimise threshold of EUR 5,000 for which transactions conducted by primary insiders (persons discharging managerial responsibilities, "PDMRs") and persons closely associated to a PDMR shall be notified will be raised to EUR 20,000 per calendar year, with the possibility for each member state to increase the threshold to EUR 50,000 or to decrease the threshold to EUR 10,000. Further, new exemptions to the prohibition for PDMRs to conduct transactions during a closed period of 30 calendar days prior to the announcement of statutory financial reports will be introduced, including for transactions that do not entail an active investment decision by the PDMR. 
• Amendments to the market sounding regulation clarify that information shared in compliance with the market sounding regime does not constitute unlawful disclosure of inside information and thus becomes a safe harbour. 
• The safe harbour for buy-back programmes will be simplified.

Amendments to MiFID II and repeal of the listing directive

The Listing Act includes proposed changes to MiFID II, among others that the minimum percentage of a share class in the hands of public investors (so-called "free float") will be decreased from 25 percent to 10 percent with no geographical restrictions to EU/EEA. Further, the Listing Directive will be repealed to increase harmonisation within the EU/EEA. 

Directive on multiple-vote share structures

The Listing Act includes a new directive that enable companies seeking admission to trading on multilateral trading facility (MTF), such as Euronext Growth Oslo, to have a multiple-vote share structure. The purpose is to make MTFs more attractive, while allowing founders to keep certain control over the company. As such structures are already adopted in many EU countries, including Norway, the directive will most likely not entail any major amendments for these countries.

Process going forward

The proposed legislative package under the Listing Act remains to be formally adopted by the Council and the European Parliament, which is expected to take place during the second half of 2024. The majority of the amended legislation above will enter into force within the EU shortly following adoption. However, certain provisions will be introduced on a staggered timeline and come into effect until between 15 to 18 months thereafter. Once the Listing Act has been adopted in the EU, an evaluation of potential amendments in Norwegian legislation will be made. Wikborg Rein will monitor the progression of the implementation and will provide updates if and when appropriate. We are available to assist clients and contacts in aspects of the Listing Act.