The EU Listing Act: Important Proposed Changes to MAR

On December 7, 2022, the European Commission released a package of measures to further develop the EU’s Capital Markets Union (CMU).

Part of this proposal is the Listing Act, which includes important changes to the Market Abuse Regulation (MAR). Those changes will have a significant impact – mostly positive – on the MAR compliance practices of EU listed issuers

MAR establishes a robust framework to preserve market integrity and investor confidence with numerous rules aiming to prevent insider dealing, unlawful disclosure of inside information and market manipulation.  It subjects issuers to extensive obligations, including as to disclosure and record-keeping, that have a direct impact on the daily operations of listed companies.

Based on stakeholder feedback, the European Commission now introduces potential changes to the regime to alleviate some of the high compliance burdens which MAR puts on issuers.  The objective of the Listing Act’s proposed changes to MAR are to enhance legal clarity, address disproportionate requirements for issuers and, importantly, to increase the overall attractiveness of EU capital markets, while also ensuring an appropriate level of investor protection and market integrity.

The proposal has been submitted to the European Council and the Parliament for deliberation and adoption.  The timing of its entry into force will largely depend on the timing of adoption, which in turn hinges on the European Council and the Parliament’s (other) priorities.

In this alert memorandum, we summarize the most significant changes introduced by the Listing Act and consider some of their practical implications for issuers.