Members' Research Service By / May 15, 2023

Listing act [EU Legislation in Progress]

On 7 December 2022, the European Commission put forward three legislative packages to further develop the European Union’s capital markets union (CMU).

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Written by Martin Höflmayr (1st edition).

The overwhelming majority of businesses in the European Union (EU) are small and medium-sized enterprises (SMEs). They employ almost two thirds of the workforce, create 85 % of all new jobs and generate about three fifths of EU value added. In the period from 2010 to 2020, only a small proportion of EU SMEs said that they raised external financing through capital markets (4 %), while a quarter used bank loans, and a fifth used business-to-business trade credits or internal funds.

To make capital markets more attractive to EU SMEs and diversify their sources of external financing, the European Commission tabled three interconnected proposals in December 2022. They seek to streamline the listing process, balancing the regulatory and compliance costs to companies seeking to list, or already listed, and ensuring proper investor protection and market integrity.

The key amendments seek to cut red tape in the listing process: at the pre-IPO stage by facilitating the development and provision of investment research while avoiding conflicts of interest inherent in such research; at the IPO stage by making it easier and cheaper for issuers to draw up a prospectus; and at the post-IPO stage by providing more clarity on what constitutes inside information. A new directive on multiple-vote share structures would harmonise national laws and allow listed companies’ owners to raise more funds at a given voting share.


Proposal for a regulation amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises; Proposal for a directive amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC; Proposal for a directive on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market
Committee responsible:Economic and Monetary Affairs (ECON)COM(2022) 762;
COM(2022) 761;
COM(2022) 760
Rapporteur:Alfred Sant (S&D, Malta)2022/0411(COD);
Shadow rapporteurs:Inese Vaidere (EPP, Latvia),
Eva Maria Poptcheva (Renew, Spain), Claude Gruffat (Greens/EFA, France), Valentino Grant (ID, Italy),
Johan Van Overtveldt (ECR, Belgium)
Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’)
Next steps expected: Publication of draft report

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