Capital Markets and Securities
The European Union aims to bolster European capital markets by reducing the regulatory burden, time, and effort for issuers and facilitating access to the capital market, particularly for small and medium-sized enterprises (SMEs), with the EU Listing Act that came into effect on December 4, 2024. The EU Listing Act introduces the most significant changes to the EU prospectus regime in recent years. While the new exemptions from prospectus requirements (see para. 1 below) took effect at the end of 2024, most of the other changes, particularly regarding reduced prospectus content and the new prospectus format, will take effect sequentially on March 5 and June 5, 2026.
Extended Prospectus Exemptions
The EU Listing Act facilitates secondary issuances by expanding existing prospectus exemptions and introducing a simplified prospectus format called the EU Follow-on Prospectus. The newly introduced exemptions are as follows:
- Under the new regime, the prospectus exemption applies both for public offerings and for listings of shares, provided they represent less than 30% of the existing securities fungible with new securities on the same regulated market over a period of 12 months.
- The exemption described in a) was extended to include public offerings of securities listed on an SME Growth Market (an open market trading venue with reduced regulatory requirements, such as the Scale segment of the Frankfurt Stock Exchange). The EU Prospectus Regulation does not apply to listings of securities on an SME growth market without a public offering.
- Furthermore, a new exemption independent of volume has been introduced for public offerings and admission to trading. This exemption applies when the issuer’s securities, which are fungible with the new securities, have been listed on a regulated market for at least 18 months. This exemption also applies to public offerings if the securities are listed on an SME growth market. However, the exemptions do not apply if the issuer is subject to restructuring or insolvency proceedings or the securities are issued in connection with a takeover by means of an exchange offer, a merger, or a split-up.
Continue Reading Update from Germany: The EU Listing Act eases the EU Prospectus Requirements