Listing Act

The European Commission believes that limited use – by international standards – of the European capital market to raise debt or equity capital is having a negative impact on economic growth and the resilience of the European Union. A draft reform package known as the Listing Act aims to remove regulatory obstacles that deter companies from accessing the capital market. This would reduce the burden on small and medium-sized enterprises (SMEs), start-ups and growth companies in particular and make Europe a more attractive financial location for investors.

Alongside the proposed Listing Act, the German parliament has also put forward a key points paper that commits it to improving the financing of future investments and facilitating capital market access for businesses. The proposed changes are to be welcomed, but still require considerable work to flesh out the detail.

Companies are likely to derive the following benefits from a stock market listing:

• Shareholders have the ability to dispose of their shares quickly and easily.
• The capital market is available to the company as an additional source of financing.
• The company becomes more attractive as an employer, while key employees can more easily share in the company’s success through stock option schemes for management and employees.
• The company increases its visibility to customers and business partners.

We have summarised the latest proposals to amend various EU legal acts and on the enactment of a new directive on shares with multiple voting rights, and presented them in an accessible manner. “Shares with multiple voting rights” refers to shares that give their holder a multiple of the voting rights of “normal” shares at the company’s general meeting (also known as dual class shares). In Germany, dual class shares are currently prohibited by law in almost all cases, under section 12 (2) of the Stock Corporation Act (Aktiengesetz – AktG). Dual class shares are permitted in other countries, however, including some Member States of the European Union, and are quite common. Accordingly, the current legislation is likely to put Germany at something of a competitive disadvantage. 

• Synopsis of Market Abuse Regulation (including final compromise by the General Secretariat of the Council of the EU)
• Synopsis of Prospectus Regulation (including final compromise by the General Secretariat of the Council of the EU)
• Reforms to European capital markets law 

Ask our experts about the listing act

Partner

Philipp Melzer

Rechtsanwalt

Frankfurt

Contact details : Philipp Melzer

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Further information in our blog post

(in German language only)

Germany

Blog · 16 Feb 2023

Listing Act