ICMA response to European Commission targeted consultation on the Listing Act
11 February 2022
The consultation posed a wide range of questions relating to the state of public capital markets in the EU and the associated regulatory regimes, namely the EU’s Prospectus Regulation (PR), Market Abuse Regulation (MAR), MiFID, Transparency Directive and Listing Directive.
ICMA has responded to the European Commission’s targeted consultation on
the Listing Act: making public capital markets more attractive for EU
companies and facilitating access to capital for SMEs. The key points from ICMA’s
response are as follows.
- The EU’s primary bond markets currently function efficiently,
particularly in the wholesale space. The regulatory environment for
listing wholesale bonds in the EU is considered to be reasonably
well-calibrated, although is perceived to place more emphasis on
investor protection than ensuring access to finance for bond issuers.
- Given the well-functioning nature of wholesale primary bond markets
currently, many ICMA members would welcome only necessary adjustments to
the PR. However, some more ambitious proposals to increase flexibility
for bond issuers could also be considered. In any event, the base
prospectus format, wholesale disclosure regime and flexibility for bond
issuers to choose their home Member State under the PR work well and
must be retained. Similarly, the public offer exemptions and application
to securities to be admitted to a regulated market (but not MTFs)
provide important flexibility.
- In relation to MAR, the broad scope (namely its application to
securities listed on regulated markets, MTFs and OTFs), the definition
of “inside information”, obligations relating to insider lists and the
market soundings regime are considered problematic or disproportionate.
- Changes to the listing-related requirements under MiFID,
Transparency Directive and Listing Directive are, on balance, not
considered to be necessary at this time.
- There is scope to develop a pan-EU retail bond market, but
regulation is only one factor among various other commercial and market
drivers. Constructing an appropriate regulatory regime would require a
holistic consideration of various regulatory tools and incentives. The
situation is similar for SME issuer access to public bond markets, where
investors tend to need more (rather than less) information about the
issuer. While challenges exist in both the retail and SME contexts, they
should be considered separately given retail investors are less likely
to be able to assess and bear the increased risks associated with
investing in SME bonds.
ICMA
© ICMA
