05-15-2025 Article

Listing Act – Overview of significant changes in the European market abuse regime for issuers

Update Capital Market Law No. 57

On 4 December 2024, the EU Listing Act, a package of several legal acts adopted by the European legislator, entered into force. Among other things, this introduces some significant changes to the market abuse regime. The aim of the EU Listing Act is to make the capital market in Europe more attractive. To this end, the Market Abuse Regulation (Regulation (EU) No 596/2014 - MAR) has been amended. The aim is to reduce excessive obligations for issuers while continuing to ensure an appropriate level of investor protection and transparency.

Unlike the amendments to the Prospectus Regulation with regard to the significant extension of prospectus exemptions (see Capital Markets Law Update No. 56), the amendments to the Market Abuse Regulation will largely take effect next year, more specifically on 5 June 2026. Nevertheless, it is advisable for issuers to start looking into the upcoming changes now. In particular, issuers should pay attention to the delegated acts still to be adopted by the EU Commission and the interpretation guidelines from the European and German supervisory authorities.

This article provides an overview of the most important changes for practitioners.

Changes relating to the Issuer’s Obligation to Disclose Inside Information

No obligation to publish intermediate steps

The rules on the issuer’s obligation to disclose inside information directly concerning that issuer (so-called ad hoc disclosure) are probably undergoing the most extensive changes. This applies in particular to disclosure requirements with regard to so-called "protracted processes", i. e. processes consisting of several intermediate steps resulting in a final event. Typical protracted processes include M&A transactions, but also major capital or conversion measures.

The main changes are easy to explain, but the devil is in the detail. First, intermediate steps in protracted processes will no longer have to be disclosed to the public in an ad hoc announcement, even if they constitute inside information. In the future, only the "final event" will have to be disclosed. This is intended to avoid confusion among investors by publishing premature information at a very early stage. As in the future intermediate steps will no longer have to be disclosed (in general) in future, there will also no longer be a need to delay of that disclosure. As a result, decisions to delay the publication of intermediate steps are therefore no longer required; instead, MAR provides for a statutory delay of that publication in future. The related documentation requirements will also no longer apply.

The EU Listing Act thus streamlines the previous MAR system in relation to the disclosure of inside information. While the obligation to disclose an inside information no longer applies if it constitutes an intermediate step in a protracted process, this information nevertheless remains inside information. This means, among other things, that insider dealing prohibitions will still have to be observed; issuers and persons acting on their behalf or on their account must continue to maintain insider lists for persons with access to any type of inside information (for the simplifications provided in this regard, see Capital Markets Law Update No. 55).

Confidentiality and disclosure requirements in the event of rumours

Even if an inside information "only" constitutes an intermediate step, the issuer's duty to ensure confidentiality will continue to apply in the future. Disclosure may therefore only be withheld as long as it is ensured that the inside information, i. e. the specific intermediate step, is kept confidential. Otherwise, the inside information must be disclosed to the public as soon as possible. This is particularly the case if a rumour expressly refers to undisclosed inside information and the rumour is sufficiently precise. In such cases, it is assumed that confidentiality is no longer ensured. In practice, the issuer is therefore required not only to maintain confidentiality within its own organisation, but also to take appropriate compliance measures to identify rumours in the market and assess whether the confidentiality of the information is no longer ensured.

Distinction between intermediate steps and final events to be disclosed disclosure

In the wake of the new regulations, practitioners will in future face the challenge of clearly distinguishing between intermediate steps and the respective final event subject to disclosure. The EU Commission has been empowered to draw up a non-exhaustive list of final events in protracted processes in a delegated act and to specify the point in time at which the final event is deemed to have occurred and therefore must be disclosed. ESMA, the European securities and markets authority, and the Deutsches Aktieninstitut (DAI) already addressed possible practically relevant protracted processes and final events (see also).

On 7 May 2025, ESMA published a proposal for a non-exhaustive list of final events (ESMA; Final Report – Technical advice concerning MAR and MiFID II SME GM). ESMA first defines the term "protracted process" as a series of actions, steps or decisions spread in time which need to be performed, at least in part by the issuer, in order to achieve an intended objective or result. ESMA then identifies three categories of protracted processes and sets out principles for determining the relevant disclosure date for each category. ESMA distinguishes between protracted processes that are entirely internal to the issuer (such as restructurings, capital increases and dividend distributions), processes that involve the issuer and external counterparties (such as mergers, disposals of relevant assets, contracts), and protracted processes that involve the issuer and public authorities.

In the case of issuers with a two-tier governance structure (such as a stock corporation under German law) where the approval of the supervisory body (supervisory board) for a decision adopted by the management body (management board) is required by law, bylaws or statutes, ESMA recognises that the decision-making process is only complete once the supervisory body has given its approval. However, the issuer's internal decision-making process should provide for the supervisory body's decision to taken place as soon as possible to ensure timely disclosure.

However, the legally binding nature of ESMA’s proposals will only be established by a delegated act to be adopted by the European Commission, which has to be adopted by July 2026 at the latest, based on ESMA's advice and further consultations. It therefore remains to be seen whether the Commission will follow ESMA's technical advice.

However, it is already becoming apparent that even after the amendment of the rules on disclosure of inside information, careful consideration, assessment and documentation of this process will be necessary in each individual case. Hopefully, the delegated act will provide helpful examples and guidance for practitioners.

Changes relating to managers' transactions (directors' dealings)

Another change relevant to practice is the relaxation of the reporting thresholds for directors' dealings. Initially, nothing will change in Germany, as BaFin had already adopted the reporting threshold of EUR 20,000 now required by law in the past. However, the competent national authority, i. e. BaFin in Germany, will be able to raise the threshold to up to EUR 50,000 in future. Such an increase in the threshold value in Germany would be welcome for corporate practice.

Changes relating to buy-back programmes and market sounding

The EU Listing Act also provides further simplifications to reduce the administrative burden of applying MAR. These apply since the date of entry into force of the Listing Act on 4 December 2024.

With regard to the notification of transactions under buy-back programmes under the so-called safe harbour provision of Article 5 MAR, the Listing Act provides for a number of procedural simplifications. More specifically, multiple notifications to several supervisory authorities will no longer be necessary if an issuer's shares are listed on several trading venues. It will suffice to notify the authority competent for the supervision of trading venue that is most relevant in terms of liquidity. With regard to market sounding under Article 11 MAR, it has now been clarified that the requirements for market sounding set out therein are not mandatory. Disclosure of inside information without applying the specific rules for market sounding therefore is not necessarily inadmissible or unlawful. However, if the market sounding requirements are met, the disclosure is presumed to be lawful (safe harbour rule). If the disclosed information loses its status as inside information, the recipients of the market sounding must still be notified immediately (so-called cleansing). However, if the inside information has been announced publicly in the meantime, cleansing is no longer necessary.

These changes also serve to reduce the MAR requirements often perceived as very formal and to streamline the European market abuse regime.

Conclusion

The new provisions in European market abuse law are welcome in principle. However, the far-reaching changes in the area of ad hoc disclosure requirements are likely to give rise to considerable pitfalls in practice, at least until the supervisory authorities have established a certain administrative practice. Ultimately, it therefore remains to be seen to what extent the specific list of final events in the delegated act yet to be adopted will create a certain degree of legal certainty. Issuers will have to redesign their existing processes with regard to the treatment of inside information and process to delay its disclosure, at least in cases involving protracted processes. In addition, the administrative burden associated with monitoring the emergence of rumours on the market will not really be reduced.