On Thursday, 1 February, representatives of the European Parliament and the Belgian Presidency of the Council of the European Union reached a provisional political agreement on the ‘EU Listing Act’—a legislative package that aims to make it easier for European companies, particularly SMEs, to raise capital on the markets.
Pleased with this development, Belgian Minister of Finance Vincent Van Peteghem stated in a press release that the agreement reached on this legislative package “will reduce the administrative burden for companies and contribute to making EU capital markets more attractive”. He stressed the importance of encouraging “companies to list [themselves] on the stock exchange while at the same time ensuring high levels of investor protection”.
By amending the Market Abuse Regulation (596/2014), the reporting obligation will no longer apply during the intermediate steps of a multistage listing process (e.g., a merger). Issuers will only be required to disclose information related to the final stage of the process.
In order to increase the level of investment research on SMEs, the requirement level has been revised downwards so as to encourage potential investors to seek out SMEs issuing securities on the stock exchange and, conversely, to increase SMEs’ visibility among investors.
On Thursday, representatives of the European Parliament and the EU Council also approved the delineation of ‘multiple-vote share structures’, a corporate governance mechanism that will enable those who run SMEs whose shares are floated on the stock market for the first time to retain control over their companies (see EUROPE 13339/19).
According to the press release, the provisional agreement on the proposal for a specific directive “extends the scope of the directive to include more markets than just SME growth markets, defines the safeguards necessary for [minority] investors entering a multiple-vote share structure and establishes the necessary transparency rules for this kind of undertaking”.
In particular, a provision has been introduced that provides for either a maximum voting ratio (i.e., the value of the votes per share that existing shareholders can hold compared to incoming shareholders), leaving its value to Member States’ discretion, or a restriction on most of the decisions taken by a qualified majority at the listed company’s general meeting [of shareholders].
The provisional political agreement still has to be formally approved by the European Parliament and Member States. (Original version in French by Mathieu Bion)