Listing Act: New Developments Concerning Market Abuse
On October 8, 2024, the EU Council approved the Listing Act a package of legislative measures designed to simplify and make it more attractive for companies to access the capital markets of the European Union (EU), especially for SMEs. See Post | The EU Listing Act has been published.
One of the legislative measures included in the Listing Act is Regulation 2024/2809/EU, which, among other things, introduces significant new features in the market abuse regime. Generally, the reform will be directly applicable from early December 2024, but some provisions will not be applicable until 15 or 18 months later due to the need to develop guidelines or level 2 measures. In this regard, most of the changes related to the delay in the dissemination of inside information and the provisions related to protracted processes will come into force on June 5, 2026.
Key aspects
- - Disclosure of Inside Information
- - The scope of the obligation in the context of protracted processes (e.g., M&A operations) is reviewed, allowing only the "final events" to be communicated and not the intermediate steps.
- - The conditions for delaying the dissemination of inside information are clarified, replacing the requirement that the delay does not mislead the public with the requirement that the information does not contrast with the latest public announcement or other communication from the issuer on the same matter.
- - Market Soundings. It is emphasized that the "safe harbor" is optional, and the protection is extended to communications in potential transactions that are not finalized.
- - Transactions by Managers and Directors ("PDMRs"). Exceptions to the prohibition on trading during "blackout periods" are expanded, and the reporting thresholds for PDMRs’ transactions and related persons are raised.
- - Insider Lists. The implementing technical standards on the alleviated format of the insider lists for issuers admitted to trading on SME growth markets to extend the use of such a format to all insider lists shall be reviewed.
- - Sanctions. A sanctioning system more proportionate to the relevant company’s size, based on total annual turnover and establishing maximum thresholds depending on the type of infringement, is established.