News |
2024-12-04
EU’s Listing Act facilitates capital raisings
Today, on 4 December 2024, several parts of EU’s Listing Act (the “Listing Act”)[1] becomes applicable, which all listed companies – and especially companies contemplating a capital raising – should be aware of. Not familiar with the Listing Act? Below we have summarized two key changes for listed companies considering a capital raising, both effective as of today.
No prospectus for companies listed at least 18 months.
Companies that have had their shares listed on a regulated market (g. Nasdaq Stockholm) or an SME growth market (e.g. Nasdaq First North Growth Market) continuously for at least 18 months do no longer need to prepare a prospectus in connection with a capital raising through a new share issue (where the new shares are of the same class as the listed shares). The exemption is applicable regardless of the size of the offering, but is conditional upon, e.g., that the securities are not issued as part of a takeover, merger or division. In addition, and instead of a prospectus, a short-form document (maximum 11 pages) including key information on the issuer and the shares/offering must be filed with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) and published by the issuer, but the document is not subject to any scrutiny or approval process with the authority.
TM comment: We expect this exemption to be widely used. For instance, this exemption means that from now on it will be possible to carry out rights issues without preparing and filing a prospectus with the Swedish Financial Supervisory Authority. This will both save time and cost for issuers and remove the transaction risk associated with the prospectus approval process with the Swedish Financial Supervisory Authority. It will also open up the possibility to carry out rights issues in periods of the year which up until now have been more or less closed due the issuer not having available the required financial information to fulfil the prospectus requirements. Finally, the exemption also provides the opportunity to include retail investors to a larger extent than before in directed share issues.
Widened prospectus exemption relating to admission to trading and public offers.
The current 20 per cent exemption (allowing issuers listed on a regulated market to issue, over a period of 12 months, up to 20 per cent of the number of shares already listed without any prospectus) is increased to 30 per cent. Moreover, the increased exemption will also be applicable in relation to public offers, e. listed companies (both companies on a regulated and SME growth market) will be able to offer up to 30 per cent of the company’s shares to the public without any prospectus. This exemption also requires that the issuer files and publishes the short-form document described above.
TM comment: We foresee a more limited use of this exemption, but we expect it to be used in mainly two situations. The first situation is in relation to companies which have been listed for a shorter period than 18 months and therefore can’t use the above-mentioned exemption. The second situation is in connection with public takeovers involving share exchange offers.
What else?
The Listing Act introduces additional changes to the Market Abuse Regulation (MAR), effective as of today. Notable updates include:
- The threshold for reporting PDMR transactions is raised from EUR 5,000 to EUR 20,000. The Swedish Financial Supervisory Authority (Sw. Finansinspektionen) intends to evaluate the threshold in 2025 with the possibility of raising or lowering the threshold to EUR 50,000 or EUR 10,000.
- Certain transactions not related to active investment decisions by PDMRs are now exempt from the prohibition of transactions during closed periods.
What’s next?
In 2026, additional parts of the Listing Act will come into effect. Key updates will include:
- New prospectus types are introduced to further simplify the capital-raising process for listed companies and the listing process for unlisted companies.
- Simplified prospectus rules for companies considering an upgrade to a regulated market, such as moving from Nasdaq First North Growth Market to Nasdaq Stockholm.
- The issuer’s obligation to disclose inside information related to an intermediate step in a protracted process (e.g., M&A transactions) is removed from MAR.
Do you want to know more? Please contact TM & Partners Capital Markets team:
[1] The Listing Act aims to facilitate access to capital market-based financing options for companies within the European Union, and mainly involves changes to the Prospectus Regulation, the Market Abuse Regulation (MAR), MiFID II and MiFIR.
