Facilitating Capital Raising in the EU: Analysing the Reformed Prospectus Regime

What the paper says

To enhance the attractiveness and competitiveness of EU capital markets, the 2024 Listing Act introduces targeted reforms to the Prospectus Regulation and the Market Abuse Regulation (MAR). This article identifies the main amendments to the EU prospectus regime and analyses to what extent they may reduce listing costs and contribute to a more attractive listing environment in the EU, without harming investor protection. The analysis focuses on three key areas of reform. First, the Listing Act significantly broadens exemptions to the prospectus obligation for secondary issuances. Second, it seeks to improve the readability and comprehensibility of prospectuses by introducing page limits and standardized sequences and formats and reducing disclosure regimes for already-listed issuers and Small and Medium-sized Enterprises (SMEs). Third, it addresses fragmentation across Member States by harmonizing the National Competent Authorities’ approval procedures for prospectuses. The analysis shows that, although the potential benefits of this reform may not be underestimated, it is unclear to what extent targeted amendments will significantly enhance listing activity in EU capital markets.