Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 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
Date: 2022-12-07
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: capital market, financial instrument, financial legislation, investment company, investment protection, issue of securities, small and medium-sized enterprises, stock-exchange listing

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   EUROPEAN COMMISSION  Brussels, 7.12.2022  COM(2022) 760 final 2022/0405 (COD)  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 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 (Text with EEA relevance) {SEC(2022) 760 final} - {SWD(2022) 762 final} - {SWD(2022) 763 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Political context 

This proposal is part of the Listing  Act package, a set of measures to make public markets 
more attractive to EU companies and facilitate access to capital for small and medium-sized 
companies (SMEs). It is in line with the main aim of the Capital Markets Union (CMU) to 
improve access to market-based sources of financing for EU companies at each stage of their 
development,  including  for  smaller  companies.  Listed  companies,  including  those  recently 
listed, often outpace privately owned companies in terms of annual revenue growth and job 
creation.1 By listing on public markets, companies can diversify their investor base, reduce 
their  dependency  on  bank  financing,  gain  easier  and  cheaper  access  to  additional  equity 
capital  and  debt  finance  (through  secondary  offers),  raise  their  public  profile  and  increase 
brand recognition. 

Since the publication of the first CMU action plan in 2015, progress has been made to make 
it easier and cheaper for companies, in particular SMEs, to access public markets. In January 
2018, the Directive 2014/65/EU of the European Parliament and of the Council (MiFID II)2 
introduced  a  new  category  of  multilateral  trading  facilities  (MTFs),  the  SME  growth 
markets3,  to  incentivise  SMEs  access  to  capital  markets.  In  2019,  new  EU  rules  were  put 
forward under Regulation (EU) 2019/2115 of the European Parliament and of the Council4 
(SME  Listing  Act)  reduce  the  regulatory  burden  for  companies  listing  on  SME  growth 
markets,  while  preserving  a  high  level  of  investor  protection  and  market  integrity. 
Nevertheless,  despite  this  progress,  stakeholders  argue  that  further  regulatory  action  is 
needed to streamline the listing process and make it more flexible for issuers.  

The new CMU action plan adopted in September 2020 announced that ‘in order to promote 
and diversify small and innovative companies’ access to funding, the Commission will seek to 
simplify the listing rules for public markets’. Following up on this and building on the 2019 
SME Listing Act, the Commission set up a Technical Expert Stakeholder Group (TESG) on 

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4 

Empowering  EU  capital  markets  for  SMEs  -  Making  listing  cool  again  Final  report  of  the  Technical 
Expert Stakeholder Group (TESG) on SMEs, May 2021. Oxera Consulting LPP, Primary and secondary 
equity markets in EU, Final report, November 2020,  Oxera-study-Primary-and-Secondary-Markets-in-
the-EU-Final-Report-EN-1.pdf. 

Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014  on  markets  in 
financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (OJ L 173 
12.6.2014, p. 349). 

For an MTF to qualify as an SME growth market, at least 50% of the issuers whose financial instruments 
are traded on the MTF need to be SMEs, defined under MiFID II as companies with an average market 
capitalisation of less than EUR 200 million. In order to ensure the appropriate level of investor protection, 
the listing rules on SME growth markets must also satisfy certain quality standards, including the need to 
draw  up  an  appropriate  admission  document  (when  a  prospectus  is  not  required)  and  to  comply  with 
periodic financial reporting. The SME growth market framework was developed to further acknowledge 
the special needs of SMEs accessing the public equity and bond markets for the first time. 

Regulation  (EU)  2019/2115  of  the  European  Parliament  and  of  the  Council  of  27  November  2019 
amending Directive 2014/65/EU and Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the 
promotion of the use of SME growth markets (OJ L 320, 11.12.2019, p. 1). 

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SMEs that confirmed stakeholders’ views that further legislative action is needed to support 
listing of companies, especially of SMEs. In its final report5 of May 2021, the TESG made 12 
recommendations  to  amend  the  listing  framework  both  on  regulated  markets,  and  SME 
growth markets. 

On 15 September 2021, President Von der Leyen announced in her letter of intent6 addressed 
to the Parliament and the Presidency of the Council a legislative proposal to facilitate SMEs’ 
access to capital, which has been included in the 2022 Commission work programme.7  

A company’s decision to list is complex and is influenced by a multitude of factors, many of 
which  are  outside  the  reach  of  regulators  and  therefore  cannot  be  addressed  directly  by 
legislation. For instance, the factors that affect the cost of listing services, and more broadly 
geopolitical  instability,  Brexit, COVID-19, and  inflation, have all had (and may  continue to 
have) an impact on the decision to list, when to list, and whether to remain listed in the EU. 
Regulatory requirements and the associated costs and burden, however, are also a major factor 
in a company’s decision to list and remain listed. The Listing Act package presents a targeted 
set  of  measures  aiming  to:  (i)  reduce  the  regulatory  burden  where  it  is  considered  to  be 
excessive  (i.e.  where  regulation  could  contribute  to  investor  protection/market  integrity  in  a 
more  cost  efficient  manner  for  stakeholders);  (ii)  and  increase  the  flexibility  given  under 
company law to companies founders or controlling shareholders to choose how to distribute 
voting rights after the admission to trading of shares. 

The  regulatory  framework  applying  to  the  listing  process  is  multifaceted.  Companies  must 
comply with regulatory requirements before, during and after the initial public offering (IPO). 
The proposed Directive is accompanied by two other legislative proposals, all forming part of 
the Listing Act package: (i) a proposal for a Regulation amending the Prospectus Regulation 
and  Market  Abuse  Regulation,  which  aims  to  streamline  and  clarify  listing  requirements 
applying  on  primary  and  secondary  markets,  while  maintaining  an  appropriate  level  of 
investor protection and market integrity; and (ii) a proposal for a Directive on  multiple-vote 
share  structures,  which  aims  to  address  the  regulatory  barriers  that  emerge  at  the  pre-IPO 
phase and, in particular, the unequal opportunities of companies across the EU to choose the 
appropriate governance structures when listing.  

Reason for the proposal 

Listed  companies,  especially  SMEs,  need  to  make  themselves  known  to  possible  investors: 
the  current  low  level  of  investment  research  on  such  issuers,  driven  by  many  underpinning 
factors, leads to their low visibility and scarce investors’ interest, further limiting the liquidity 
for the already listed companies.  

Under MiFID II and Commission Delegated Directive (EU) 2017/5938 where the investment 
in  connexion  with 
to 
research 

is  provided  by 

third  parties 

investment 

firms 

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Final  report  of  the  Technical  Expert  Stakeholder  Group  (TESG)  on  SMEs  -  Empowering  EU  capital 
markets - Making listing cool again (europa.eu) 

See p. 4: state_of_the_union_2021_letter_of_intent_en.pdf (europa.eu). 

Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  Commission  work  programme  2022  Making 
Europe stronger together COM (2021) 645 final cwp2022_en.pdf (europa.eu).  

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execution/brokerage services, it is not regarded as an inducement if it is received in return for: 
(i) a direct payment by the investment firm out of its own resources; or (ii) a payment from a 
separate  research  payment  account  controlled  by  the  firm  and  subject  to  several  conditions 
(known  as  “unbundling  rules”).  After  a  few  years  of  application,  the  success  of  the 
unbundling rules is contestable.  

The unbundling rules seem to have met some of the objectives, including to better manage the 
conflicts  of  interest,  to  limit  the  over  production  of  research  on  very  liquid  shares  and  to 
improve  transparency  of  the  costs  associated  to  the  provision  of  research.  However,  these 
rules  have  not  contributed  to  growth  of  independent  investment  research  providers.  On  the 
contrary,  further  to  the  introduction  of  the  unbundling  rules,  independent  research  became 
unsustainable due to low prices charged by some larger research providers.  

Evidence  further  suggests  that  the  unbundling  rules  might  have  impaired  the  overall 
availability of research, especially for small and medium capitalisation companies, and led to 
a  shrinking  market  research  infrastructure,  which  is  detrimental  to  a  competitive  and 
diversified analysts’ market. EU brokers, that had in the past provided SME research as part 
of their “bundled” investment services, scaled back SME capacities following their decision 
not  to  pass  the costs of research to  their clients.  The listed  small  and  medium  capitalisation 
companies  segment  was  particularly  affected  because  bundled  payments  allowed  payments 
for  research  on  large  companies  to  be  used  for  research  on  small  and  midcap  companies. 
Overall,  several  surveys  show  that  the  SME  coverage  has  significantly  shrunk  or  even 
disappeared  altogether  in  the  years  after  the  unbundling  rules  took  effect.  The  consequence 
was further concentration in the “unbundled” research market and a reduction in the diversity 
and breadth of the research on offer. 

While the unbundling rules were designed to break the nexus between brokerage commissions 
and investment research as well as to create a “price” for investment research, unbundling has 
not actually allowed to independently price research and has also not opened up this market to 
independent  (non-brokerage)  providers.  Most  importantly,  the  unbundling  rules  have  not 
prevented the negative trend in small and medium capitalisation companies research coverage 
and have not led to the emergence of independent, SME focused research providers. 

In 2021, the unbundling rules were first amended, as part of a more general effort under the 
CMRP9 to help the recovery from the COVID-19 crisis which forced companies to rely more 
heavily  on  debt,  weakening  their  funding  structures.  In  circumstances,  where  companies 
needed  urgent  re-capitalisation,  the  need  for  more  visibility  of  EU  companies,  in  particular 
small and medium capitalisation companies, was considered fundamental and the implicit cost 
of not having the research coverage even higher. In that context, the CMRP, applicable since 
28  February  2022,  sought  to  improve  the  small  and  medium  capitalisation  companies’ 

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Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU of 
the  European  Parliament  and  of  the  Council  with  regard  to  safeguarding  of  financial  instruments  and 
funds  belonging  to  clients,  product  governance  obligations  and  the  rules  applicable  to  the  provision  or 
reception of fees, commissions or any monetary or non-monetary benefits (OJ L 87, 31.3.2017, p. 500). 

Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending 
Directive 2014/65/EU as regards information requirements, product governance and position limits, and 
Directives  2013/36/EU  and  (EU)  2019/878  as  regards  their  application  to  investment  firms,  to  help  the 
recovery from the COVID-19 crisis 

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research  coverage10  by  providing  an  exemption  from  the  unbundling  rules  for  investment 
research covering issuers whose market capitalisation does not exceed EUR 1 billion for the 
period of 36 months preceding the provision of the research, hence allowing in such cases for 
a joint payment for trade execution and research. Nevertheless, while this measure was widely 
welcomed, it did not sufficiently address the problem. As many investment firms and brokers 
offer services to companies of a varying size (and  capitalisation), including those exceeding 
the capitalisation of EUR 1 billion set out in the CMRP, these investment firms and brokers 
decided  against  introducing  two  parallel  systems  for  research  invoicing,  maintaining  the 
unbundled  approach  for  all  clients.  Therefore,  the  amendment  in  the  CMRP  did  not  fully 
reach  its  objective  to  support  the  production  of  the  small  and  medium  capitalisation 
companies research and a further legislative review in this context would be necessary.  

In  addition  to  amendments  to  the  research  unbundling  regime,  the  proposal  introduces  a 
limited  number  of  amendments  to  the  legislative  framework  governing  the  SME  growth 
market, a category of MTFs, created under MiFID II to raise SMEs visibility and profile as 
well  as  to  aid  the  development  of  common  regulatory  standards  in  the  EU  for  markets 
specialised in SMEs.11  

Finally,  the  proposal  also  seeks  to  repeal  the  Listing  Directive.  The  Listing  Directive,  a 
minimum  harmonisation  directive  adopted  in  2001,  provided  the  basis  for  listing  on  EU 
markets  before the adoption  of the Prospectus  Directive12 and the Transparency Directive13, 
that  have  subsequently  replaced  most  of  the  provisions  harmonising  the  conditions  for  the 
provision of information regarding requests for the admission of securities to listing and the 
information  on  securities  admitted  to  trading.  MiFID  introduced  the  notion  ‘admission  of 
financial instruments to trading on a regulated market’. ESMA’s Securities Markets Standing 
Committee analysis on the implementation of the Listing Directive found that many Member 
States are not applying any longer the concepts used in the Listing Directive in national law.14 
Moreover, those Member States that still apply such concepts under national law have a rather 
broad discretion to deviate from the rules set out in the Listing Directive to take into account 

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Recital  8  of  the  CMRP  (Directive  (EU)  2021/338  of  the  European  Parliament  and  of  the  Council  of 
16 February  2021  amending  Directive  2014/65/EU  as  regards  information  requirements,  product 
governance  and  position  limits,  and  Directives  2013/36/EU  and  (EU)  2019/878  as  regards  their 
application  to  investment  firms,  to  help  the  recovery  from  the  COVID-19  crisis)  states  that:  “In  the 
immediate  aftermath  of  the  COVID-19  pandemic,  issuers,  and  in  particular  small  and  middle-
capitalisation companies, need to be supported by strong capital markets. Research on small and middle-
capitalisation  issuers  is  essential  to  help  issuers  to  connect  with  investors.  That  research  increases  the 
visibility  of  issuers  and  thus  ensures  a  sufficient  level  of  investment  and  liquidity.  Investment  firms 
should be allowed to pay jointly for the provision of research and for the provision of execution services 
provided certain conditions are met”. 

In  April  2021,  ESMA  published  its  Final  Report  on  the  functioning  of  the  regime  for  SME  growth 
markets,  which  concluded  that  this  new  regime  has  been  relatively  successful  with,  at  the  time  of  the 
publication  of  the  report,  seventeen  MTFs  registered  as  SME  growth  markets.  Report  available  at: 
final_report_on_sme_gms_-_mifid_ii.pdf (europa.eu). 

Directive  2003/71/EC  of  the  European  Parliament  and  of  the  Council  of  4  November  2003  on  the 
prospectus to be published when securities are offered to the public or admitted to trading and amending 
Directive 2001/34/EC (OJ L 345, 31.12.2003, p. 64). 
Directive  2004/109/EC  of  the  European  Parliament  and  of  the  Council  of  15  December  2004  on  the 
harmonisation of transparency requirements in relation to information about issuers whose securities are 
admitted to trading on a regulated market (OJ L 390, 31.12.2004, p. 38). 

Only 7 NCAs noticed that the Listing Directive is still in force or partially in force in their jurisdiction. A 
more detailed analysis can be found in Annex 7 of the Impact Assessment accompanying this proposal.  

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specific local market conditions. Currently the two concepts ‘admission to official listing’ and 
‘admission to trading on a regulated market’ are often used interchangeably in some Member 
States.  The  dual  regime  of  admission  to  trading,  on  the  one  hand,  and  admission  to  official 
listing, on the other hand, could lead to legal uncertainty at EU level, in particular, due to the 
fact that the requirements on transparency and market abuse, that seek to protect investors and 
ensure  market  integrity,  are  not  currently  applied  to  instruments  admitted  to  official  listing, 
while those requirements apply to instruments admitted to trading on a regulated market.   

Objectives of the proposal 

The overall objective of this proposal is to introduce targeted adjustments to the EU rulebook 
in order to enhance visibility of listed companies, especially SMEs, and streamline the listing 
process with a view to enhancing legal clarity. 

The  proposed  targeted  amendments  to  MiFID  II  seek  to  facilitate  the  development  and 
provision  of  investment  research  on  companies,  especially  for  the  small  and  medium 
capitalisation  ones,  and  to  further  incentivise  the  attractiveness  of  the  SME  growth  market 
regime,  to  ultimately  ease  small  and  medium  capitalisation  companies’  access  to  capital 
markets.  This  proposal  increases  the  market  capitalisation  threshold  for  small  and  medium 
capitalisation companies, below which the re-bundling of trading execution fees and research 
fees would be possible. By increasing the current threshold of EUR 1 billion up to EUR 10 
billion, the aim is to capture a broader scope of small and medium capitalisation companies, 
and in particular more medium size companies, that would benefit from a re-bundling regime, 
allowing  in  particular  that  payments  for  research  on  large  companies  may  be  used  also  for 
research on small companies”. The exemption to the unbundling regime will remove barriers 
to the entry to more research on  small and medium capitalisation companies and globally is 
expected  to  revitalise  the  market  for  investment  research.  The  more  small  and  medium 
capitalisation  companies  research  is  made  available  to  potential  investors,  the  more  chance 
those  companies  may  have  to  find  fundings.  More  investment  research  on  those  companies 
will  bring  them  greater  visibility  and  more  prospect  of  attracting  potential  investors. 
Considering  the  high  number  of  small  and  medium  capitalisation  companies  in  EU,  it  is 
crucial  for  the  EU  economy  that  those  companies  get  access  to  diversified  sources  of 
fundings, including via the capital markets. 

Furthermore,  this  proposal  aims  to  provide  a  framework  for  developing  a  particular  type  of 
research  that  is  paid  by  the  issuer  (‘issuer-sponsored  research’).  A  public  consultation, 
exchanges  with  stakeholders, and different  analyses,15 showed that this type of research has 
developed, in particular, following the introduction of MiFID II, to compensate for the lack of 
the  research  coverage  on  small  and  medium  capitalisation  companies.  Considering  the 
conflicts of interest inherent in such research, it seems necessary to regulate its production to 
guarantee fair and accurate information for its consumers. To promote more transparent and 
independent research, this proposal mandates that such research is produced following a code 
of conduct developed or endorsed by a market operator or a competent authority in the EU. 

In  order  to  make  investment  research  labelled  as  issuer-sponsored  research  more  easily 
accessible  to  the  public  and  to  promote  the  visibility  of  small  and  medium  capitalisation 
companies  with  potential  investors,  the  proposal  mentions  that  Member  States  shall  ensure 

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Report  entitled  “Reviving  research  in  the  wake  of  Directive  2014/65/EU:  Observations,  issues  and 
recommendations available at: 20200124-rapport-mission-recherche-projet-va-pm.pdf (amf-france.org)  

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that  issuers  may  submit  their  issuer-sponsored  research  to  the  collection  body  as  defined 
under [Article 2(2) of the proposal for a regulation on a European Single Access Point16].  

Once established, the European Single Access Point (ESAP), proposed by the Commission on 
25  November  202117  and  currently  under  interinstitutional  negotiations  with  the  EU  co-
legislators  will  provide  a  single  point  of  access  to  public  financial  information  on  EU 
companies,  including  SMEs,  and  EU  investment  products.  ESAP  is  designed  to  give  EU 
companies,  especially SMEs,  greater visibility to investors and could  be used to  collect  and 
disseminate  issuer-sponsored  research.  Going  forward,  ESAP  may  be  used  to  publish  the 
issuers’ notifications related to issuer-sponsored research and the contents of such research. 

Moreover,  the  targeted  amendments  to  MiFID  II  seek  to  clarify  that  an  operator  of  a 
multilateral trading facility (MTF) can apply for a segment of the MTF to be registered as an 
SME growth market provided that certain requirements are complied with in respect of that 
segment. 

Furthermore,  this  proposal  seeks  to  increase  the  harmonisation  and  coherence  of  the  listing 
rules in the EU, in order to make the regulatory framework fit for purpose. This proposal in 
particular harmonises and consolidates the listing rules by repealing the Listing Directive and 
transferring its relevant provisions into MiFID II, in order to reduce legal uncertainty and risk 
of regulatory arbitrage in the EU.  

Those  provisions  concern:  (i)  the  minimum  free  float  requirement,  which  determines  the 
portion of a company’s issued share capital that is in the hands of public investors, as opposed 
to  company  officers,  directors,  or  shareholders  that  hold  controlling  interest;  and  (ii)  the 
foreseeable market capitalisation of the shares for which admission to listing is sought or, if 
this cannot be assessed, the company's capital and reserves, including profit or loss, from the 
last financial year. The proposal also decreases the minimum free float requirement from 25% 
to  10%  to  allow  for  more  flexibility  for  issuers  who  want  to  keep  a  large  share  in  the 
company. In addition, the new minimum free float threshold of 10% will not be limited to the 
public  in  the  EU/EEA.  That  geographical  restriction  of  the  free  float  requirement  to  the 
EU/EEA will not be maintained as MiFID II does not provide for such restriction for financial 
instruments admitted to trading. 

• 

Consistency with existing policy provisions in the policy area 

The  amendments  to  MiFID  II  and  the  repeal  of  the  Listing  Directive  are  in  line  with  the 
overarching objectives of MiFID II to increase transparency and reinforce investor protection. 
Furthermore,  this  proposal  builds  and  further  expands  on  the  amendments  brought  by  the 
CMRP to the investment research regime.  

Targeted  amendments to MiFID  II  are fully in  line with  the objectives of the existing SME 
growth markets regime under MiFID II 'to facilitate access to capital for smaller and medium-
sized enterprises' and with the need to focus attention 'on how future regulation should further 
foster and promote the use of that market so as to make it attractive for investors, and provide 

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Proposal for a Regulation of the European Parliament and of the Council establishing a European single 
access  point  providing  centralised  access  to  publicly  available  information  of  relevance  to  financial 
services, capital markets and sustainability. 2021/0378 (COD). 
Proposal for a Regulation of the European Parliament and of the Council establishing a European single 
access  point  providing  centralised  access  to  publicly  available  information  of  relevance  to  financial 
services, capital markets and sustainability. 2021/0378 (COD) 

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a  lessening  of  administrative  burdens  and  further  incentives  for  small  and  medium 
capitalisation companies to access capital markets through SME Growth Markets'18. 

• 

Consistency with other Union policies 

The proposal is fully in line with the CMU core aim to make financing more accessible to EU 
companies  and in  particular to  SMEs.  It  is  consistent with  a number of legislative and non-
legislative  actions  taken  by  the  Commission  in  the  framework  of  the  2015  CMU  Action 
Plan,19 2017 Mid-term Review of the CMU Action Plan20 and 2020 CMU Action Plan. 

In order to  support jobs  and growth  in  the EU,  facilitating access  to  finance for companies, 
especially SMEs, has been a key goal of the CMU from the outset. Since the publication of 
the CMU Action Plan in 2015, some targeted actions were taken to develop adequate sources 
of funding for SMEs through all their stages of development. In its Mid-term Review of the 
CMU Action Plan published in June 2017, the Commission chose to raise its level of ambition 
and  strengthened  its  focus  on  the  SMEs’  access  to  public  markets.  In  May  2018,  the 
Commission  published  a  proposal  for  the  SME  Listing  Act21  aiming  to  reduce  the 
administrative  burden  and  the  high  compliance  costs  faced  by  SME  growth  market  issuers 
while ensuring a high level of market integrity and investor protection; foster the liquidity of 
publicly  listed  SME  shares  to  make  these  markets  more  attractive  for  investors,  issuers  and 
intermediaries;  and  facilitate  the  registration  of  MTFs  as  SME  growth  markets.  The  SME 
Listing Act was adopted in November 2019.  

Furthermore,  following  the  COVID-19  crisis,  the  Commission  published  the  CMRP,  which 
comprised  of  targeted  amendments  to  capital  markets  and  bank  regulation,  with  the 
overarching  aim  to  make  it  easier  for  capital  markets  to  support  EU  businesses  to  recover 
from  the  COVID-19  crisis.  The  suggested  changes  to  the  capital  market  rules  aimed  in 
particular to alleviate regulatory burden and complexity for investment firms and issuers.  

This proposal follows up on the 2020 CMU Action Plan and its objective to make financing 
more  accessible  to  EU  companies  (Action  2  “supporting  access  to  public  markets”).  The 
proposal  focuses  on  alleviating  the  regulatory  requirements  that  can  deter  a  company  from 
deciding to list or to remain listed. Other factors that may deter issuers from listing, such as a 
narrow investor base and a more favourable tax treatment of debt over equity, are addressed 
by  other  ongoing  and  upcoming  CMU  initiatives  that  complement  the  amendments  put 
forward  in  this  proposal  and  should  be  analysed  in  conjunction  with  this  initiative.  These 
initiatives relate, for example, to (i) the creation of an EU Single Access  Point (ESAP) that 
will tackle the lack of accessible and comparable data for investors, making companies more 
visible to investors, (ii) the centralisation of EU trading information in a consolidated tape for 
a more efficient public market trading landscape and price discovery, (ii) the introduction of a 

18  MiFID II, recital 132  
19 

Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions,  Action  Plan  on  Building  a  Capital  Markets 
Union COM(2015) 468 final 

20 

21 

Communication  from the Commission on the  mid-term review  of  the capital  markets  union action plan 
June 
({SWD(2017) 
https://ec.europa.eu/info/sites/info/files/communication-cmu-mid-term-review-june2017_en.pdf 

{SWD(2017) 

final} 

final} 

224 

225 

and 

– 

8 

2017)              

Proposal for a Regulation of the European Parliament and of the Council amending Regulations (EU) No 
596/2014 and (EU) 2017/1129 as regards the promotion of the use of SME growth markets COM(2018) 
331 final  

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debt-equity  bias  reduction  allowance  (DEBRA)22  to  make  equity  financing  more  attractive 
(and less costly) for companies. 

Furthermore, a series of the Commission initiatives will further strengthen the investor base 
for  listed  equity.  The  EU  SME  IPO  Fund  will  play  the  role  of  an  anchor  investor  to  attract 
more private investment in SMEs’ public equity by partnering with institutional investors and 
investing in funds focused on SME issuers. The CRR and Solvency II reviews will increase 
the investor base for issuers by facilitating investments from banks and insurance companies 
in public (long-term) equity.  
This proposal is also in line with the New European Innovation Agenda23 published in 2022. 

The  proposal  also  takes  into  account  the  evidence  behind  the  opinion  of  the  Fit  For  Future 
Platform  on  facilitating  SMEs’  access  to  capital  and  in  particular  on  simplification  of  the 
procedures for the admission to trading of securities of SMEs and other listing obligations. 

Finally,  this  proposal  will  help  especially  EU  SMEs  benefit  from  a  clearer  and  easier 
legislative regime to access capital markets. This is also in line with the objective of the SME 
relief package announced by the Commission President Ursula von der Leyen in the State of 
the European Union speech on September 19, 2022.24 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Articles 50, 53(1) and 114 of the Treaty on the Functioning of the 
European Union (TFEU).25 

Article 50(1) TFEU and in particular Article 50(2)(g) TFEU provide for the EU competence 
to act in order to attain freedom of establishment as regards a particular activity, in particular 
“by  coordinating  to  the  necessary  extent  the  safeguards  which,  for  the  protection  of  the 
interests of members and others, are required by Member States of companies or forms within 
the  meaning  of  the  second  paragraph  of  Article  54  TFEU  with  a  view  to  making  such 
safeguards equivalent throughout the Union”. Article 50 TFEU mandates the Parliament and 
the Council to act by means of directives.  

Article  114  TFEU  provides  for  the  adoption  of  measures  for  the  approximation  of  the 
provisions laid down by law, regulation or administrative action in Member States which have 
as their object the establishment and functioning of the internal market. The Union legislature 
may have recourse to Article 114 TFEU in particular where disparities between national rules 
obstruct  the  fundamental  freedoms  or  create  distortions  of  competition  and  so  have  a  direct 
effect on the functioning of the internal market. 

22 

23 

24 

25 

Proposal for a Council Directive on laying down rules on a debt-equity bias reduction allowance and on 
limiting the deductibility of interest for corporate income tax purposes (COM/2022/216 final). 

Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  -  A  New  European  Innovation  Agenda 
(COM/2022/332 final). 

European Commission - Statement, A “Relief Package” to give our SMEs a lifeline in troubled waters I 
Blog of Commissioner Thierry Breton; Brussels, 19 September 2022. 

OJ C 326, 26.10.2012, p. 47–390 (GA) 

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The legal basis for amendments to MiFID II is Article 53(1) TFEU. Article 53 TFEU grants 
the co-legislators the power to issue directives aimed at making it easier for persons to take up 
and pursue commercial activities across the EU. 

• 

Subsidiarity (for non-exclusive competence)  

Under Article 4 TFEU, EU action for completing the internal market must be appraised in the 
light  of  the  subsidiarity  principle  set  out  in  Article  5(3)  of  the  Treaty  on  European  Union 
(TEU). It must be assessed whether the objectives of the proposal: (i) could not be achieved 
by the Member States  alone; and  (ii) could  be better achieved  at  EU level  given their scale 
and  effect.  It  also  has  to  be  considered  whether  the  objectives  would  be  better  achieved  by 
action at EU level (the so-called ‘test of European added-value’). 

The proposed measure aims at ensuring a better research coverage in the EU, particularly for 
small  and  medium  capitalisation  companies.  As  the  measure  touches  upon  rules  on 
inducement that are governed by MiFID II, the revised rules would also apply at EU level.  

On the code of conduct for the issuer-sponsored research, considering that such research may 
be distributed cross-border, the proposed EU measure would ensure that the same or similar 
level of requirements would apply to all issuer-sponsored research. This would improve, in a 
harmonised way, the quality of issuer-sponsored research across the EU  and. Consequently, 
improve access to funding opportunities through EU public markets.  

Regarding  the  listing  requirements  set  out  in  the  Listing  Directive,  the  different  approaches 
taken  by  Member  States  and  their  different  interpretations  of  the  rules  make  it  difficult  to 
reduce regulatory fragmentation in the EU. As MiFID II now covers the rules for admission 
of financial instruments  to  trading  and seeks maximum  harmonisation  across national  rules, 
the introduction of the remaining  relevant  provisions  of the  Listing  Directive  into MiFID  II 
seems to be the most appropriate way to reduce the divergent application of listing rules in the 
EU.  

• 

Proportionality 

On the proportionality principle, the proposal does not go beyond what is strictly necessary to 
achieve its objectives. It is compatible with the proportionality principle, taking into account 
the right balance between market participants’ interests at stake and the cost-efficiency of the 
measure.  

On  investment  research,  the  proposed  regulatory  amendment  will  reduce  the  burden  for 
investment firms and in turn ensure that more small and medium capitalisation companies’ get 
research coverage and benefit from better visibility in the market. 

On  Listing  Directive  overall  the  proposal  to  repeal  it  and  include  the  relevant  provisions  in 
MiFID II shows the evolution of the legislative environment. 

• 

Choice of the instrument 

This proposal amends a directive of the European Parliament and of the Council adopted on 
the basis of Article 53(1) TFEU. A proposal for a directive is therefore required to amend the 
aforementioned Directive.  

The Listing Directive is based on Article 50 and Article 114 TFEU. The Listing Directive will 
be repealed and relevant provisions on listing will be introduced in MiFID II. This will enable 

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Member  States  to  amend  the  legislation  currently  in  force  to  the  extent  needed  to  ensure 
compliance with the relevant MiFID II provisions.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

This initiative focuses on reducing the regulatory burden that issuers incur during the listing 
process and afterwards when they are listed. Therefore, it only covers those aspects in the EU 
legislation that stakeholders consider to hinder companies’ access to and ability to remain on 
public markets. 

To  inform  this  initiative,  the  Commission  services  collected  a  significant  amount  of  data 
directly  from  trading  venues  and  issuers  (including  SME  associations).  TESG  (in  force 
between  October  2020  and  May  2021)  provided  some  evidence  in  addition  to  the  input 
received from market participants. The Commission also contracted a study on Primary and 
Secondary Equity Markets in the EU from Oxera in November 2020, which contains a very 
detailed  overview  of  EU  capital  markets.  Other  sources  used  included  extensive  academic 
literature and research.  

More  information  on  the  problems  identified  in  the  proposal  is  provided  in  the  impact 
assessment on the Listing Act annexed to this proposal. Annex 7 provides an overview of how 
the  Listing  Directive  has  been  implemented  by  the  Member  States  and  sets  out  potential 
future courses of action. Annex 9 analyses rules on investment research and the changes to the 
EU regulatory environment to date. It also sets out possible ways forward.  

• 

Stakeholder consultations 

On 19 November 2021, the Commission launched a 14-week public and targeted consultation 
seeking views from  stakeholders on how to  increase the overall attractiveness  of listings on 
public  markets  in  the  Union,  including  any  potential  shortcomings  in  the  regulatory 
framework that dissuade companies from raising funds via capital markets. The consultation 
put  forward specific questions concerning Regulation (EU) 2017/1129,  Regulation  (EU) No 
596/2014,  and  including  the  Directive  2001/34/EC  and  Directive  2014/65/EU  and  areas  of 
improvement from a general standpoint.  

Overall, 108 responses were received, sent by stakeholders from 22 Member States, the US, 
the UK and Switzerland. 

The  majority  of  respondents  (60%)  saw  merit  in  including  in  Level  1  the  conditions  under 
which an operator of an MTF may register a segment of the MTF as an SME growth market. 
They highlighted that this would enhance legal clarity. They added that such an amendment 
could also incentivise more MTFs to register SME GM segments.  

A  small  majority  of  respondents  (51%)  viewed  the  new  research  regime  introduced  by  the 
CMRP  as  positive  to  support  SMEs’  access  to  capital  markets.  Most  of  those  respondents 
pointed  out  that  the  impact  of  the  CMRP  is  however  very  limited.  Some  pointed  out  that 
research  coverage  for  SMEs  is  considered  uneconomic  for  asset  managers  and  research 
providers  and  that  this  appears  as  a  long-term  trend.  Nevertheless,  business  associations,  in 
particular, and NCAs pointed out it is still too early to tell what the overall impact of the new 
regime is. The overwhelming majority of respondents (72.9%) would see merit in alleviating 
the  MiFID  II  regime  on  research  even  further.  While  some  suggested  to  lift  the  exemption 
threshold in order to fully cover the small and mid-cap segment, several business associations 

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considered  that  going  back  to  fully  bundled  execution  and  company  research  pricing  is  the 
only  solution  to  boost  research  for  SMEs  (which  dropped  to  an  almost  non-existent  level). 
Some also considered that the MiFID II research regime was wrongly designed for companies 
of any size. They claimed that MiFID II regime has indirectly become an incentive to allocate 
a  larger  part  of  research  services  value  in  the  hands  of  a  few  big  players  (i.e.  leading  to 
consolidation in the industry).  

A majority recommended to fully exempt from the unbundling rule research on fixed income, 
as  the  reform  has  not  produced  any  impact  on  the  spreads,  nor  led  to  more  research  by 
independent providers. However, a few respondents were also strongly opposed to the full re-
bundling,  arguing  that  this  would  create  an  unacceptable  non-level  playing  field  between 
research  provided  by  investment  firms  and  other  research  producers  -  research  has  to  be 
independent  regardless  of  the  fact  that  the  entity  issuing  it  may  run  other  activities  or  may 
belong to  a  group. Many  respondents  suggested to encourage  research sponsored by issuers 
and  argued  that  this  is  the  sole  way  to  develop  research  on  SMEs  (both  equity  and  fixed-
income  products).  They,  however,  suggested  safeguards  to  increase  its  acceptability  by 
investors, such as by making it subject to a code of conduct rules and clearly labelling it as 
issuer-sponsored  research  (and  not  as  a  marketing  communication).  A  large  majority  of 
respondents  (58.5%)  considered  that  the  Listing  Directive,  in  its  current  form,  needs  to  be 
amended. Respondents were divided on whether the Listing Directive should be incorporated 
in  another  piece  of  legislation,  amended  as  a  directive  or  amended  and  transformed  into  a 
regulation, or repealed. Over 33% of respondents considered that the definitions laid down in 
Article 1 of the Listing Directive are outdated. Almost 47% of them being not able to answer. 
Very few respondents (20%) thought that the definitions were not outdated. Most respondents 
(54%) considered that the broad flexibility that the Listing Directive leaves to Member States 
and NCAs on the application of the rules for the admission to the official listing of shares and 
debt securities is appropriate in light of local market conditions. The majority of respondents 
who  expressed  their  opinion  considered  the  expected  market  capitalisation  (Article  43(1)  of 
the Listing Directive), the disclosure pre-IPO (Article 44 of the Listing Directive) and the free 
float requirement (Article 48(5) of the Listing Directive) as very or rather relevant (67%, 68% 
and 72% respectively). While some respondents added that flexibility is needed to adjust the 
requirements according to the size of the market or issuer (to have the possibility to lower the 
free  float  threshold),  others  argued  that  national  discretion  would  not  be  necessary  if  an 
appropriate minimum threshold is set at EU level.  

• 

Collection and use of expertise 

Over the recent years, companies’ and especially SMEs’ access to public markets has been the 
focus  of  the  Commission’s  continuous  evaluations.  Issues  relating  to  regulatory  burden  on 
companies  when  accessing  public  markets  were  raised  in  the  context  of  the  TESG  and  the 
2020  CMU  Action  Plan.  The  Commission  also  took  into  account  extensive  research  on  the 
topic undertaken in the Oxera study.  

The Commission also organised two technical meetings/workshops with industry stakeholders 
in April 2022 with a view to further refining the policy options under consideration. 

Furthermore,  the  Commission  presented  the  objective  of  the  proposal  at  the  European 
Securities Committee Expert Group and at  the Coordinators of the Economic and Monetary 
Affairs Committee (ECON) of the European Parliament. 

Expert group recommendations 

In October 2020, the European Commission initiated the TESG. The Group had been tasked 
with monitoring and assessing the functioning of SME growth markets, as well as providing 

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expertise  and  possible  input  on  other  relevant  areas  of  SME  access  to  public  markets.  The 
TESG confirmed the concerns expressed by the stakeholders that further legislative action is 
needed to support listing of companies and especially of SMEs. In its final report, published 
in  May  2021,  the  TESG  formulated  12  recommendations,  including  encouraging  Member 
States  to  put  in  place  measures  to  promote  equity  research  coverage  of  all  listed  small  and 
medium sized companies.  

Stakeholder meetings 

The  Commission  services  also  organised  two  technical  meetings/workshops  with  industry 
stakeholders  in  April  2022  with  a  view  to  further  refining  the  policy  options  that  the 
Commission  was  considering.  The  meeting  with  the  exchanges  was  held  on  5  April  2022. 
Most exchanges were in favour of repealing the Listing Directive as long as certain elements 
(free float and minimum foreseeable market capitalisation) were incorporated in the MiFID II 
regime. Some were also in favour of lowering the minimum free float to 10%. One exchange 
expressed a view that the concept of “admission to the official listing” is important and should 
be kept. This exchange opposed the repeal of the Directive for that reason. The meeting with 
issuers  and  investors  was  conducted  on  8  April  2022.  On  the  Listing  Directive,  the 
stakeholders that expressed their view saw merit in deleting the provisions on free float. 

Meetings with Member State experts 

The  Commission  also  presented  the  objective  of  the  proposal  at  the  European  Securities 
Committee Expert Group (EGESC) on 15 October 2021 as well as on 17 and 30 May 2022. 
Delegations participating in the discussion showed support for the Commission’s objective to 
improve  the  attractiveness  of  EU  public  markets,  while  ensuring  investor  protection  and 
market integrity. 

Meeting with the ECON coordinators in the European Parliament's Committee  

The  MEP  Coordinators  that  participated  in  the  discussion  welcomed  the  Commission’s 
proposed  way  forward  on  the  Listing  Act,  acknowledging  the  problem  with  EU  public 
markets.  They  stressed  that  the  Commission  needs  to  find  a  right  balance  to  ensure  that  all 
companies, especially SMEs, can access public markets for funding, while at the same time 
ensuring adequate investor protection.  

• 

Impact assessment 

The  impact  assessment  was  submitted  to  the  Regulatory  Scrutiny  Board  (RSB)  on  10  June 
2022 and approved by the Regulatory Scrutiny Board (RSB) – with reservations – on 8 July 
2022.The RSB requested to amend the draft impact assessment to clarify: (i) the articulation 
and coherence of the Listing Act initiative with other linked capital markets initiatives; (ii) the 
risks  and  limitations  of  the  analysis;  and  (iii)  the  different  views  expressed  by  different 
categories  of  stakeholders  on  the  problem  definition,  the  options  and  their  impacts.  The 
Board’s  comments  were  addressed  and  integrated  in  the  final  version  of  the  impact 
assessment.  

The  impact  assessment  focuses  on  identifying  and  addressing  specific  regulatory  barriers  at 
each  stage  of  the  listing  process.  It  discusses  barriers  at  the  pre-IPO  stage  stemming  from 
company law, in particular, from the fact that a multiple-vote share listing is not possible in 
some Member States. It then focuses on barriers at the IPO stage arising from the Prospectus 
Regulation,  notably  from  the  high  costs  of  drawing  up  a  prospectus.  Finally,  it  addresses 
barriers encountered at the post-IPO stage stemming from MAR, in particular, costs due to the 
legal uncertainty regarding the issuers’ obligation to publicly disclose inside information. For 

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each stage of the listing process, the impact assessment sets out two alternative policy options, 
after  having  analysed  the  available  empirical  evidence  and  accounting  for  stakeholders’ 
views.  

The  impact  assessment  analyses  the  options  in  relation  to  three  objectives,  that  is  whether 
they: (i) reduce the regulatory and compliance costs for companies seeking to list or those that 
are already listed, (ii) ensure a sufficient level of investor protection and market integrity, and 
(iii) provide issuers with more incentives to  list. The preferred option (for each stage of the 
listing process) should thus be cost-efficient and effective in addressing the identified barrier 
while safeguarding  a sufficiently high level  of investor protection and market  integrity. The 
proportionality of measures for smaller companies has been considered when identifying and 
assessing options. 

While the regulatory amendments set out in the options, on their own, could not address all 
the challenges faced by EU public markets, together with other measures considered as part of 
a wider plan to enhance companies’ access to public capital markets, they seek to contribute 
to  reversing  the  current  negative  trend  in  EU  public  markets.  Absent  of  those  regulatory 
improvements,  EU  public  markets  would  continue  to  rely  on  the  suboptimal  regulatory 
framework  for  listing,  which  in  turn  would  reduce  the  attractiveness  of  public  markets, 
resulting in an economic cost for EU issuers, investors and the EU economy as a whole. The 
baseline scenario hence envisages no amendments to the legislative framework governing the 
rules for listing and already listed companies. 

With  regard  to  the  Listing  Directive,  the  impact  assessment  recommends  the  repeal  of  the 
Listing  Directive  and  transferring  the  relevant  provisions  from  the  Listing  Directive  into 
MiFID II.  

With regard to MiFID, the impact assessment recommends looking into measures that could 
be  adopted  to  revitalise  the  market  for  investment  research  such  as  increasing  the  market 
capitalisation of issuers/companies below which the exemption applies to include coverage of 
broader  scope  of  SMEs.  Furthermore,  another  measure  that  would  help  encourage  more 
issuer-sponsored research would be to create a “code of conduct” which would regulate such 
research.  

As regards the social, economic and environmental impacts, climate consistency check and do 
no  significant  harm  principles,  this  proposal  will  contribute  to  the  CMU  agenda  and  its 
objectives to ensure the development and further integration of capital markets in the EU. The 
regulatory  measures  proposed  in  this  initiative  are  expected  to  have  an  impact  on  all 
companies in the EU, but in particular on SMEs, which are more exposed to the (excessive) 
regulatory burden than larger companies with a higher cost absorption potential. This proposal 
would  also  be  conducive  to  the  development  of  more  open  and  more  competitive  capital 
markets, benefitting in particular faster-growing companies in innovative and research-intense 
sectors that tend to have higher capital needs. 

The initiative is not expected to have a direct social impact. However, there can be a positive 
indirect impact on employment. Although the (indirect) social impact cannot be quantified, it 
is likely to be positive. Provided that the proposal achieves its objective of easing the access 
to public markets by EU companies, the latter will be able to benefit from a more diversified 
and larger pool of funding sources, allowing these companies to innovate, grow and employ 
more people. 

No  direct  environmental  impacts  and  no  significant  harm,  either  direct  or  indirect,  are 
expected to arise from the implementation of this proposalA significant number of companies 
listed on public markets, however, may engage in the development and innovation process of 

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new environment-friendly technologies. A better access to finance will allow these companies 
to grow at a more rapid pace and allocate more financial resources to R&D programmes that 
can contribute to the European Green Deal objectives. 

This proposal is in line with the SDG 826- decent work and economic growth as it contributes 
to the growth of SMEs by providing easier access to funding through public markets. Newly 
listed companies are a key motor of new investment and job creation. Easier access to public 
markets creates incentives for entrepreneurs to diversify in times of economic turmoil, leading 
to a more resilient economy. It also contributes directly to Target 8.3 “Promote development-
oriented  policies  that  support  productive  activities,  decent  job  creation,  entrepreneurship, 
creativity and innovation, and encourage the formalisation and growth of micro-, small- and 
medium-sized  enterprises,  including  through  access  to  financial  services”  and  Target  8.10  “ 
Strengthen the capacity of domestic financial institutions to encourage and expand access to 
banking, insurance and financial services for all” as well as indirectly to Target 8.2 “Achieve 
higher  levels  of  economic  productivity  through  diversification,  technological  upgrading  and 
innovation”. 

Furthermore, it is  in  line with  SDG 9  – industry, innovation,  and infrastructure as an  easier 
access  to  public  markets  would  increase  access  of  smaller  (industrial)  companies  to  new 
funding  opportunities.  This  would  provide  them  with  alternative  sources  of  financing  and 
ensure their ability to  grow and innovate, including in  the areas of key strategic importance 
for the EU. Contributes indirectly to Target 9.3 “Increase the access of small-scale industrial 
and  other  enterprises  to  financial  services,  including  affordable  credit,  and  their  integration 
into value chains and markets”. 

This proposal overall is not expected to have any impact on digitalisation. 

• 

Regulatory fitness and simplification 

The overall Listing Act package is expected to bring about annual administrative cost savings 
of  approximately  EUR  167  million  for  issuers,  including  SMEs.  It  is  expected  that  NCAs 
would  be  able  to  reduce  their  costs  because  simpler  and  clearer  requirements  will  make  it 
possible to conduct their supervisory activities more efficiently.  As the relevance and added 
value  of  the  Listing  Directive  has  decreased  as  a  result  of  recent  enacted  legislation,  the 
Listing  Act  package  also  proposes  to  repeal  the  Listing  Directive.  It  is  expected  that  there 
would  be  only  minor  adjustment  costs  arising  from  the  implementation  of  the  proposal  for 
issuers and NCAs. 

• 

Fundamental rights 

The  proposal  respects  fundamental  rights  and  observes  the  principles  recognised  by  the 
Charter,  in  particular  the  freedom  to  conduct  a  business  (Art.  16)  and  consumer  protection 
(Art. 38). As this initiative aims at alleviating the administrative burden placed on issuers, this 
initiative would contribute to improving the right to conduct business freely. 

26 

Amongst  the  Sustainable  Development  Goals  (SDG)  of  the  United  Nations,  SDG  8  concerns  “decent  work  and 
economic growth”. The  Listing  Act is expected to  contribute to the growth of SMEs by providing easier access to 
funding through public markets. Newly listed companies are a key motor of new investment and job creation. Easier 
access to public markets creates incentives for entrepreneurs to diversify in times of economic turmoil, leading to a 
more resilient economy. 

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4. 

BUDGETARY IMPLICATIONS 

The initiative is not expected to have any impact on the EU budget.  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

An evaluation is envisaged 5 years after the implementation of the measure and according to 
the  Commission’s  better  regulation  guidelines.  The  objective  of  the  evaluation  will  be  to 
assess, among other things, how effective and efficient the Directive has been in achieving the 
policy objectives and to decide whether new measures or amendments are needed.  

• 

Detailed explanation of the specific provisions of the proposal 

Amendments to Directive 2014/65/EU  

Article 1 of the proposal amends Directive 2014/65/EU in the ways described hereunder. 

 
Article 1(1) of the proposal amends Article 4(1), point (12) of Directive 2014/65/EU, 
which is the definition of “SME growth markets”, to also include the segment of an MTF in 
the definition.  

 
Article 1(2), point (a) of the proposal  introduces a new point 3a on the qualities of 
investment research. It sets out that research provided by third parties shall be fair, clear and 
not misleading.  

 
Article 1(2), point (a) of the proposal also inserts a new point 3b on the conditions to 
label  research  as  “issuer-sponsored  research”.  Such  conditions  include  the  requirement  for 
research  to  comply  with  a  code  of  conduct,  as  well  as  the  requirements  for  the  content, 
publication  and  review  of  such  code  of  conduct.  The  Article  also  clarifies  that  issuers  may 
submit  their  issuer-sponsored  research  to  the  collection  body  under  the  proposal  for  a 
European single access point. A final clarification is added that any research material paid by 
the  issuer  but  not  produced  in  compliance  with  such  code  of  conduct  shall  be  labelled  as  a 
marketing communication.  

 
Article  1(2),  point  (a)  of  the  proposal  introduces  a  new  point  3d.  For  research 
labelled as issuer-sponsored research, it must be a clearly indicated on the front page of the 
research that it has been prepared in line with a code of conduct.  

 
capitalisation to EUR 10 billion, below which the unbundling rules do not apply. 

Article 1(2), point (b) of the proposal increases the threshold of companies’ market 

 
Article 1(3), points (a) to (c) clarify that a segment of MTF can be registered as an 
SME  growth  market  and  set  out  the  conditions  and  requirements  for  its  registration  or  de-
registration.  

 
Article  1(4)  of  the  proposal  introduces  a  new  Article  51a  to  cover  the  specific 
conditions for the admission of shares to trading on a regulated market. Such conditions are 
the EUR 1 million minimum market capitalisation requirement for companies that seek to list 
their  shares  on  a  regulated  market,  as  well  as  a  10%  minimum  free  float  requirement. 
Furthermore, the Commission is empowered to adopt delegated acts to change such thresholds 
when  they  hamper  the  liquidity  on  public  markets,  taking  into  account  financial 
developments.  

EN 

15 

  EN 

Amendments to Directive 2001/34/EC  

Article 2 of the proposal repeals the Listing Directive. 

Article 3 sets out the requirement and timeline to transpose this Directive. 

Article 4 sets the date when this Directive will enter into force. 

Article 5 sets out to whom this Directive is addressed. 

EN 

16 

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2022/0405 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

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 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 50, 53(1) and 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee27,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

27 
28 

29 

30 

Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council28  has  been 
amended  by  Regulation  (EU)  2019/2115  of  the  European  Parliament  and  of  the 
Council29,  which  introduced  proportionate  alleviations  to  enhance  the  use  of  SME 
growth  markets  and  to  reduce  the  excessive  regulatory  requirements  for  issuers 
seeking  admission  of  securities  on  SME  growth  markets,  while  preserving  an 
appropriate level  of investor protection and market  integrity. However, to streamline 
the listing process and to render the regulatory treatment of companies  more flexible 
and  proportionate  to  their  size,  further  amendments  to  Directive  2014/65/EU  are 
necessary. 
Directive 2014/65/EU and Commission Delegated  Directive (EU) 2017/59330 set  out 
the  conditions  under  which  the  provision  of  investment  research  by  third  parties  to 
investment  firms  providing  portfolio  management  or  other  investment  or  ancillary 
services  is  not  to  be  regarded  as  an  inducement.  In  order  to  foster  more  investment 

OJ C , , p. . 
Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014  on  markets  in 
financial  instruments  and  amending  Directive  2002/92/EC  and  Directive  2011/61/EU  (OJ  L  173, 
12.6.2014, p. 349). 
Regulation  (EU)  2019/2115  of  the  European  Parliament  and  of  the  Council  of  27  November  2019 
amending Directive 2014/65/EU and Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the 
promotion of the use of SME growth markets (OJ L 320, 11.12.2019, p. 1). 
Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU of 
the  European  Parliament  and  of  the  Council  with  regard  to  safeguarding  of  financial  instruments  and 
funds  belonging  to  clients,  product  governance  obligations  and  the  rules  applicable  to  the  provision  or 
reception of fees, commissions or any monetary or non-monetary benefits (OJ L 87, 31.3.2017, p. 500). 

EN 

17 

  EN 

                                                 
(3) 

(4) 

(5) 

(6) 

research  on  companies  in  the  Union,  in  particular  small  and  medium  capitalisation 
companies,  and  to  bring  those  companies  greater  visibility  and  more  prospect  of 
attracting  potential  investors,  it  is  necessary  to  introduce  some  amendments  to  that 
Directive. 

The  provisions  concerning  research  laid  down  in  Directive  2014/65/EU  require 
investment firms to separate payments which they receive as brokerage commissions 
from  the  compensation  perceived  for  providing  investment  research  (‘research 
unbundling  rules’),  or  to  pay  for  investment  research  from  their  own  resources  and 
assess the quality of the research they purchase based on robust quality criteria and the 
ability  of  such  research  to  contribute  to  better  investment  decisions.  In  2021,  those 
rules have been amended by Directive (EU) 2021/338 of the European Parliament and 
of the Council31 to allow for bundled payments for execution services and research for 
small  and  medium  capitalisation  companies  below  a  market  capitalisation  of 
EUR 1 billion. The decline of investment research has, however, not slowed down. 

In  order  to  revitalise  the  market  for  investment  research  and  to  ensure  sufficient 
research  coverage  of  companies,  in  particular  the  small  and  medium  capitalisation 
companies,  further  alleviation  of  the  research  unbundling  rules  are  necessary.  By 
increasing from EUR 1 billion to EUR 10 billion the threshold of companies’ market 
capitalisation below which the unbundling rules do not apply, more small and medium 
capitalisation companies, and in particular more medium capitalisation companies will 
benefit from a larger research coverage, bringing those companies more visibility from 
potential investors and thus increasing their capacity to raise funding in the markets. 

In  addition,  to  further  support  the  coverage  of  small  and  medium  capitalisation 
companies by investment research, research material paid fully or partially by issuers 
should  be  labelled  as  ‘issuer-sponsored  research’.  To  ensure  an  adequate  level  of 
objectivity  and  independence  of  such  research  material,  such  material  should  be 
produced in line with a code of conduct developed or endorsed by a market operator 
registered  in  a  Member  State  or  by  a  competent  authority.  In  order  to  support  more 
visibility of the issuer-sponsored research, issuers should have the possibility to submit 
their issuer-sponsored research to the relevant collection body as defined32 in [Article 
2 (2) of the proposal for a Regulation33 on a European Single Access Point]. 

Directive  2014/65/EU  introduced  the  SME  growth  market  category  to  increase  the 
visibility  and  profile  of  markets  specialised  in  SMEs  and  foster  the  development  of 
common  regulatory  standards  in  the  Union  of  markets  specialised  in  SMEs.  SME 
growth markets  play a key  function in  facilitating  access  to  capital  for those smaller 
issuers  by  catering  for  their  needs.  To  foster  the  development  of  such  specialised 
markets and to limit the organisational burden for the operators of multilateral trading 
facilities (MTFs), it is necessary to allow the segment of a MTF to apply to become a 
SME growth market provided that such segment is clearly separated from the rest of 
the MTF. 

31 

32 
33 

Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending 
Directive 2014/65/EU as regards information  requirements, product governance and position limits, and 
Directives  2013/36/EU  and  (EU)  2019/878  as  regards  their  application  to  investment  firms,  to  help  the 
recovery from the COVID-19 crisis (OJ L 68, 26.2.2021, p. 14). 
See Article2.2 o proposal for a Regulation [2021.78.COD] 
Proposal for a Regulation [2021/03.78.COD] 

EN 

18 

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(7) 

(8) 

(9) 

34 

35 

36 

Directive  2001/34/EC  of  the  European  Parliament  and  of  the  Council34  lays  down 
rules  concerning  listing  on  Union  markets.  That  Directive  aims  at  coordinating  the 
rules  on  the  admission  of  securities  to  official  stock  exchange  listing  and  on 
information  to  be  published  on  those  securities  to  provide  equivalent  protection  for 
investors at Union level. That Directive also lays down the rules of the regulatory and 
supervisory  framework  for  Union  primary  markets.  In  the  course  of  the  years, 
Directive  2001/34/EC  has  been  amended  significantly  several  times.  Directives 
2003/71/EC  of  the  European  Parliament  and  of  the  Council35  and  Directive 
2004/109/EC of the European Parliament and of the Council36 have replaced most of 
the provisions harmonising the conditions  for the provision  of information regarding 
requests  for  the  admission  of  securities  to  official  stock  exchange  listing  and  the 
information on securities admitted to trading, and have made large parts of Directive 
2001/34/EC redundant. Directive 2001/34/EC as a minimum harmonisation Directive 
gives Member States a rather broad discretion to deviate from the rules laid down in 
that Directive, which has  led to  market  fragmentation in  the Union.  To drive market 
harmonisation  at  Union  level  and  create  a  single  rule  book,  Directive  2001/34/EC 
should be repealed. 

Directive  2014/65/EU,  like  Directive  2001/34/EC,  provides  for  the  regulation  of 
markets  of  financial  instruments  and  strengthens  investor  protection  in  the  Union. 
Directive 2014/65/EU also sets out rules on the admission of financial instruments to 
trading. By extending the scope of Directive 2014/65/EU to cover specific provisions 
from  Directive  2001/34/EC  will  ensure  that  all  relevant  provisions  from  Directive 
2001/34/EC  are  maintained.  A  number  of  provisions  of  Directive  2001/34/EC, 
including the requirements on free float and market capitalisation which still apply, are 
enforced  by  competent  authorities  and  are  considered  important  rules  for  seeking 
admission  to  trading  of  shares  on  regulated  markets  in  the  Union  by  market 
participants. It is therefore necessary to transfer those rules in Directive 2014/65/EU to 
set  out,  in  a  new  provision  of  that  Directive,  specific  minimum  conditions  for  the 
admission  to  trading  of  shares  on  regulated  markets.  The  application  of  that  new 
provision  should  complement  the  general  provisions  on  the  admission  of  financial 
instrument to trading laid down in Directive 2014/65/EU. 

To  allow  for  more  flexibility  for  issuers  and  to  make  Union  capital  markets  more 
competitive, the minimum free float requirement should be decreased to 10%, which is 
a threshold that ensures for a sufficient level of liquidity in the market. The free float 
requirement laid down in Directive 2001/34/EC that a sufficient number of shares is to 
be distributed to the public in one or more Member States refers to the public within 
the Union and the European Economic Area (EU/EEA). That geographical restriction 
of  the  free  float  requirement  to  the  EU/EEA  should  not  be  maintained  as  Directive 
2014/65/EU does not provide for such restriction for financial instruments admitted to 

Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of 
securities  to  official  stock  exchange  listing  and  on  information  to  be  published  on  those  securities  (OJ 
L 184, 6.7.2001, p. 1). 
Directive  2003/71/EC  of  the  European  Parliament  and  of  the  Council  of  4  November  2003  on  the 
prospectus to be published when securities are offered to the public or admitted to trading and amending 
Directive 2001/34/EC (OJ L 345, 31.12.2003, p. 64). 
Directive  2004/109/EC  of  the  European  Parliament  and  of  the  Council  of  15  December  2004  on  the 
harmonisation of transparency requirements in relation to information about issuers whose securities are 
admitted  to  trading  on  a  regulated  market  and  amending  Directive  2001/34/EC  (OJ  L  390,  31.12.2004, 
p. 38). 

EN 

19 

  EN 

                                                 
trading.  The  requirement  that  a  company  is  to  have  published  or  filed  its  annual 
accounts  for  a  specific  period  of  time  should  not  be  transferred  to  Directive 
2014/65/EU since Regulation (EU) 2017/1129 of the European Parliament and of the 
Council37  already  contains  a  provision  to  that  effect.  Directive  2014/65/EU  already 
lays  down  provisions  to  designate  competent  authorities.  Thus,  the  provisions  laid 
down  in  Directive  2001/34/EC  to  appoint  one  or  more  competent  authorities  are 
redundant.  The  requirement  for  debt  securities  that  the  amount  of  the  loan  is  not  be 
less than EUR 200 000 are considered obsolete in light of current market practice. 

(10)  The concept of admission of securities to official listing on stock exchanges provided 
for in Directive 2001/34/EC is no longer frequently used given market developments, 
as  Directive  2014/65/EU  already  provides  for  the  concept  of  ‘admission  of  financial 
instruments to trading on a regulated market’. The two concepts ‘admission to official 
trading  on  a  regulated  market’  are  often  used 
listing’  and  ‘admission 
interchangeably in some Member States. That means that, in some Member States, no 
distinction  is  made  between  the  two  concepts.  Furthermore,  the  dual  regime  of 
admission to  trading, on the one hand, and admission to  official  listing, on the other 
hand, could lead to legal uncertainty at Union level, in particular, due to the fact that 
the  requirements  laid  down  in  Directive  2003/71/EC,  Directive  2004/109/EC  and 
Directive 2014/57/EU of the European Parliament and of the Council38 do not apply to 
instruments admitted to official listing, while those requirements apply to instruments 
admitted to trading on a regulated market. 

to 

(11)  To  enhance  the  visibility  of  listed  companies,  in  particular  SMEs  and  to  adapt  the 
listing  conditions  to  improve  requirements  for  issuers,  the  power  to  adopt  acts  in 
accordance with Article 290 of the Treaty on the Functioning of the European Union 
should be delegated to the Commission in respect of amending Directive 2014/65/EU. 
The  market  capitalisation  threshold  for  companies,  for  which  the  re-bundling  of 
trading execution and research fees would be possible, to  capture  small and medium 
capitalisation  companies,  and  providing  a  framework  for  the  development  of  a 
particular form of research for which the issuer pays should be adapted. The adaption 
of the listing rules in the Union should also reflect market practice for it to be effective 
and promote competition. It is of particular importance that the Commission carry out 
appropriate  consultations  during  its  preparatory  work,  including  at  expert  level,  and 
that those consultations be conducted in  accordance with  the principles laid  down in 
the  Interinstitutional  Agreement  of  13  April  2016  on  Better  Law-Making39.  In 
particular,  to  ensure  equal  participation  in  the  preparation  of  delegated  acts,  the 
European  Parliament  and  the  Council  receive  all  documents  at  the  same  time  as 
Member  States'  experts,  and  their  experts  systematically  have  access  to  meetings  of 
Commission expert groups dealing with the preparation of delegated acts. 

(12)  Directive 2014/65/EU should therefore be amended accordingly. 

(13)  Since  the  objectives  of  this  Directive,  namely  to  ease  Union  small  and  medium 
capitalisation companies’  access  to capital markets,  and to  increase the  coherence of 
Union  listing  rules  cannot  be  sufficiently  achieved  by  the  Member  States  but  can 

37 

38 

39 

Regulation  (EU)  2017/1129  of  the  European  Parliament  and  of  the  Council  of  14  June  2017  on  the 
prospectus to be published when securities are offered to the public or admitted to trading on a regulated 
market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12). 
Directive  2014/57/EU  of  the  European  Parliament  and  of  the  Council  of  16  April  2014  on  criminal 
sanctions for market abuse (market abuse directive) (OJ L 173, 12.6.2014, p. 179). 
OJ L 123, 12.5.2016, p. 1. 

EN 

20 

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rather, by reason of the improvements and effects sought, be better achieved at Union 
level, the Union may adopt measures, in accordance with the principle of subsidiarity 
as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In  accordance  with  the 
principle of proportionality as set out in that Article, this Directive does not go beyond 
what is necessary in order to achieve those objectives. 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 
Amendments to Directive 2014/65/EU 

Directive 2014/65/EU is amended as follows: 

(1) 

in Article 4(1), point (12) is replaced by the following: 

‘(12)  ‘SME growth market’ means a MTF, or a segment of a MTF, that is registered 

as an SME growth market in accordance with Article 33;’; 

(2) 

Article 24 is amended as follows: 

(a) 

the following paragraphs 3a to 3d are inserted: 

‘3a.  research provided by third parties to investment firms providing portfolio 
management  or  other  investment  or  ancillary  services  and  research 
prepared  and  distributed  by  such  firms  shall  be  fair,  clear  and  not 
misleading.  Research  shall  be  clearly  identifiable  as  such  or  in  similar 
terms, provided that all conditions applicable to the research are met. 

3b.  Where  the  research  is  paid,  fully  or  partially,  by  the  issuer  and 
disseminated  to  the  public  or  to  investment  firms  or  to  the  clients  of 
investment firms providing portfolio management or other investment or 
ancillary  services,  such  research  shall  be  labelled  as  “issuer-sponsored 
research”  provided  that  it  is  produced  in  compliance  with  a  code  of 
conduct  developed  or  endorsed  by  a  market  operator  registered  in  a 
Member State or by a competent authority.  

The  code  of  conduct  shall  set  out  minimum  standards  of  independency 
and  objectivity  to  be  complied  with  by  the  providers  of  such  research. 
The market operator or the competent authority shall publish the code of 
conduct on its website and review and re-endorse it every 2 years.  

3c.   Member  States  shall  ensure  that  any  issuer  may  submit  its  issuer-
sponsored research, as referred to in paragraph 3b of this Article, to the 
relevant collection body as defined in [Article 2(2) of the proposal for a 
Regulation on a European Single Access Point40]. 

3d.  Research that is labelled as issuer-sponsored research shall indicate on its 
front  page  in  a  clear  and  prominent  way  that  it  has  been  prepared  in 
accordance with a code of conduct. The name of the market operator or 
competent authority that has developed or endorsed such code of conduct 
shall also be mentioned. Any other research material paid fully or in part 
by the issuer but not  produced in compliance with a code of conduct as 
referred 
labelled  as  marketing 
communication.’; 

in  paragraph  3b  shall  be 

to 

40 

Proposal for a Regulation [2021/0378.COD]. 

EN 

21 

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(b) 

in paragraph 9a, point (c) is replaced by the following: 

‘(c) 

the  research  for  which  the  combined  charges  or  the  joint  payment  is 
made concerns issuers whose market capitalisation for the period of 36 
months  preceding  the  provision  of  the  research  did  not  exceed  EUR 
10 billion,  as  expressed  by  end-year  quotes  for  the  years  when  those 
issuers  are or  were listed or by the own-capital  for the  financial  years 
when those issuers are or were not  listed.’; 

(3) 

Article 33 is amended as follows: 

(a) 

paragraphs 1 and 2 are replaced by the following: 

‘1.  Member States shall provide that the operator of a MTF may apply to its 
home competent authority to have the MTF or a segment thereof, registered as 
an SME growth market. 

2.  Member  States  shall  provide  that  the  home  competent  authority  may 
register  the  MTF,  or  a  segment  thereof,  as  an  SME  growth  market  if  the 
competent authority receives an application as referred to in paragraph 1 and is 
satisfied that the requirements in paragraph 3 are complied with in relation to 
the MTF, or that the requirements in paragraph 3a are complied with in relation 
to a segment of the MTF.’; 

(b) 

the following paragraph 3a is added: 

‘3a.  Member  States  shall  ensure  that  the  relevant  segment  of  the  MTF  is 
subject  to  effective  rules,  systems  and  procedures  which  ensure  that  the 
conditions referred to in paragraph 3 and all of the following conditions have 
been complied with: 

(a) 

(b) 

(c) 

the segment of the MTF registered as ‘SME growth market’ is clearly 
separated  from  the  other  market  segments  operated  by  the  MTF 
operator,  which  is  inter  alia  indicated  by  a  different  name,  different 
rulebook,  different  marketing  strategy,  and  different  publicity,  as  well 
as  a  specific  allocation  of  the  market  identification  code  to  the  SME 
growth market segment; 

the transactions made on the specific SME growth market segment are 
clearly  distinguished  from  other  market  activity  within  the  other 
segments of the MTF; 

upon  request  of  the  MTF’s  home  competent  authority,  the  MTF  shall 
provide  a  comprehensive  list  of  the  instruments  listed  on  the  SME 
growth  market  segment  concerned,  as  well  as  any  information  on  the 
operation  of  the  SME  growth  market  segment  that  the  competent 
authority may request.’; 

(c) 

paragraphs 4 to 6 are replaced by the following: 

‘4. 
The criteria laid down in paragraphs 3 and 3a are without prejudice to 
compliance by the investment firm or market operator operating the MTF, or a 
segment  thereof,  with  other  obligations  under  this  Directive  relevant  to  the 
operation of MTFs.  

5.  Member  States  shall  provide  that  the  home  competent  authority  may 
deregister a MTF, or a segment thereof, as an SME growth market in any of the 
following cases: 

EN 

22 

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(a) 

(b) 

the  investment  firm  or  market  operator  operating  the  MTF,  or  a 
segment thereof, applies for its deregistration; 

the  requirements  in  paragraph  3  or  3a  are  no  longer  complied  with  in 
relation to the MTF, or a segment thereof. 

6.  Members States shall require that if a home competent authority registers 
or deregisters a MTF, or a segment thereof, as  an SME growth market  under 
this  Article,  that  authority  shall  as  soon  as  possible  notify  ESMA  of  that 
registration or deregistration. ESMA shall publish on its website a list of SME 
growth markets and shall keep that list up to date.’; 

(d)  paragraph 8 is replaced by the following: 

The  Commission  is  empowered  to  adopt  delegated  acts  in  accordance 
‘8. 
with  Article  89  to  supplement  this  Directive  by  further  specifying  the 
requirements  laid  down  in  paragraphs  3  and  3a  of  this  Article.  Those 
requirements  shall  take  into  account  the  need  to  maintain  high  levels  of 
investor  protection  to  promote  investor  confidence  in  those  markets  while 
minimising  the  administrative  burdens  for  issuers  on  the  market.  They  shall 
also take into account that de-registrations do not occur nor shall registrations 
be  refused  merely  because  of  a  temporary  failure  to  comply  with  the 
requirement laid down in paragraph 3, point (a), of this Article.’; 

(4) 

the following Article 51a is inserted: 

Specific conditions for the admission of shares to trading 

‘Article 51a 

1.  Member  States  shall  require  that  the  foreseeable  market  capitalisation  of  the 
shares  for  which  admission  to  trading  is  sought,  or  if  this  cannot  be  assessed,  the 
company’s  capital  and  reserves,  including  profit  and  loss,  from  the  last  financial 
year, shall be at least EUR 1 000 000 or an equivalent amount in a national currency 
other than the Euro. 

Paragraph  1  shall  however  not  apply  to  the  admission  to  trading  of  shares 

2. 
fungible with shares already admitted to trading. 

3.  Where,  as  a  result  of  an  adjustment  of  the  equivalent  amount  of  the  Euro  in 
national  currency,  the  market  capitalisation  expressed  in  national  currency  remains 
for a period of 1 year at least 10 % approximately the value of EUR 1 000 000, the 
Member State shall, within the 12 months following the expiry of that period, adjust 
its laws, regulations or administrative provisions to comply with paragraph 1. 

4.  Member States shall require that  regulated markets  ensure  that at any time at 
least 10% of the subscribed capital represented by the class of shares concerned by 
the application for admission to trading is held by the public. 

5. 
 Where  the  percentage  of  shares  held  by  the  public  is  below  10%  of  the 
subscribed capital, Member States shall ensure that regulated markets require that a 
sufficient number of shares is distributed to the public to fulfil the requirement laid 
down in paragraph 4. 

6.  Where  admission  to  trading  is  sought  for  shares  fungible  with  shares  already 
admitted  to  trading,  regulated  markets  shall  assess,  to  fulfil  the  requirement  laid 
down in paragraph 4, whether a sufficient number of shares has been distributed to 

EN 

23 

  EN 

the  public  in  relation  to  all  the  shares  issued  and  not  only  in  relation  to  the  shares 
fungible with shares already admitted to trading. 

7. 
The  Commission  is  empowered  to  adopt  delegated  acts  in  accordance  with 
Article  89  to  amend  this  Directive  by  modifying  the  thresholds  referred  to  in 
paragraphs  1  and  3  or  in  paragraphs  4  and  5  or  in  both,  when  the  applicable 
thresholds  impede  the  liquidity  on  public  markets  taking  into  account  the  financial 
developments.’; 

(5) 

Article 89 is amended as follows: 

(a) 

paragraphs 2 and 3 are replaced by the following: 

second 

subparagraph, 

‘2.  The  delegation  of  power  referred  to  in  Article 2(3),  Article 2(4), 
Article 13(1), 
Article 4(1)(2), 
Article 16(12),  Article 23(4),  Article 24(13),  Article 25(8),  Article 27(9), 
Article 28(3),  Article 30(5),  Article 31(4),  Article 32(4),  Article 33(8),  Article 
51a(7),  Article 52(4),  Article 54(4),  Article 58(6),  Article 64(7),  Article 65(7) 
and  Article 79(8)  shall  be  conferred  on  the  Commission  for  an  indeterminate 
period of time. 

Article 4(2), 

second 

Article 4(2), 

subparagraph, 

The  delegation  of  power  referred  to  in  Article 2(3),  Article 2(4), 
3. 
Article 13(1), 
Article 4(1)(2), 
Article 16(12),  Article 23(4),  Article 24(13),  Article 25(8),  Article 27(9), 
Article 28(3),  Article 30(5),  Article 31(4),  Article 32(4),  Article 33(8),  Article 
51a(7),  Article 52(4)  Article 54(4),  Article 58(6),  Article 64(7),  Article 65(7) 
and Article 79(8) may be revoked at  any time by  the European Parliament  or 
by the Council. A decision to revoke shall put an end to the delegation of the 
power  specified  in  that  decision.  It  shall  take  effect  the  day  following  the 
publication of the decision in the Official Journal of the European Union or at 
a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any  delegated 
acts already in force.’; 

(b)  paragraph 5 is replaced by the following: 

to  Article 2(3),  Article 2(4), 
‘5.  A  delegated  act  adopted  pursuant 
Article 4(1)(2), 
Article 13(1), 
Article 4(2), 
subparagraph, 
second 
Article 16(12),  Article 23(4),  Article 24(13),  Article 25(8),  Article 27(9), 
Article 28(3),  Article 30(5),  Article 31(4),  Article 32(4),  Article 33(8),  Article 
51a(7),  Article 52(4),  Article 54(4),  Article 58(6),  Article 64(7),  Article 65(7) 
or Article 79(8) shall enter into force only if no objection has been expressed 
either  by  the  European  Parliament  or  the  Council  within  a  period  of  three 
months of notification of that act to the European Parliament and the Council 
or if, before the expiry of that period, the European Parliament and the Council 
have both informed the Commission that they will not object. That period shall 
be extended by three months at the initiative of the European Parliament or of 
the Council.’. 

Article 2 
Repeal of Directive 2001/34/EC 

Directive 2001/34/EC is repealed as of … [OP please insert the date = 24 months from date of 
entry into force of this Directive]. 

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Article 3 
Transposition 

1.  Member States  shall adopt  and publish, by … [OP  please insert  the date = 12 months 
after  the  date  of  entry  into  force  of  this  Directive]  at  the  latest,  the  laws,  regulations  and 
administrative  provisions  necessary  to  comply  with  this  Directive.  They  shall  forthwith 
communicate to the Commission the text of those provisions. 

They  shall  apply those provisions from  … [OP  please insert the date = 18 months after the 
date of entry into force of this Directive]. 

When Member States adopt those provisions, they shall contain a reference to this Directive 
or be accompanied by such a reference on the occasion of their official publication. Member 
States shall determine how such reference is to be made. 

2.  Member States shall communicate to the Commission the text of the main provisions of 
national law which they adopt in the field covered by this Directive. 

Article 4 
Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 5 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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