Amendments to Euronext Dublin Listing Rules
Following Euronext Dublin’s consultation process on proposed amendments to the Euronext Dublin Listing Rules in Q4 2024, Euronext Dublin has published updated listing rules for its regulated market.
The changes to the Euronext Dublin Rule Book II (the “Listing Rules”), which apply from 1 January 2025, are significant and are comparable to, and in many circumstances go further than, the recent large-scale reforms to the UK Listing Rules which have applied since 29 July 2024. We expect that the streamlining and simplification of the Listing Rules will be broadly welcomed by listed companies.
Key Changes
The amendments proposed by Euronext Dublin in its consultation have largely been adopted as proposed.
Key changes to the Listing Rules include:
Continuing Obligations
- The removal of the rules relating to:
- significant transactions (where the Listing Rules will now be less prescriptive than their UK equivalent), other than with respect to reverse takeovers;
- related party transactions (although issuers will still need to be mindful of separate related party transaction rules under the Companies Act 2014 (introduced to give effect to SRD II in 2020));
- shareholder approval of employee share schemes and long-term incentive plans (although it remains to be seen how institutional investor sentiment will reconcile with this relaxation of the Listing Rules);
- the distinction between a secondary listing and primary listing; and
- most ongoing disclosure obligations, save for those relating to board changes, notification of resolutions passed at general meeting and reporting on the corporate governance code applied.
Reverse Listings
- The reverse takeover regime, which is now referred to as “reverse listings” in order to align with practice across the Euronext network, has been updated. Reverse listings will now be dealt with under a separate notice document to be published alongside the Listing Rules (Notice - Reverse Listing – Policy with Respect to Reverse Listing on Euronext Markets). This notice provides that a transaction will be deemed to be a reverse listing if (i) the percentage ratio using the total assets, revenue and/or profit or loss tests (compared to previous class tests with respect to gross assets, profits, consideration and gross capital) produces a result of more than 50% (down from the previous 100%) and (ii) is determined to be a fundamental change of business by Euronext Dublin. Under the previous Listing Rules, this was an either/or test. No shareholder approval is required for a reverse listing (in contrast to the position under the revised UK Listing Rules for ESCC category companies).
Admission Requirements
- Admission requirements relating to the following have been relaxed:
- an applicant’s historical financial information – although applicants will still require three-years’ audited financials in order to apply for listing, the requirement for these financials to cover at least 75% of the applicant’s business for the HFI period has been removed;
- working capital statement – although the Listing Rules requirement for an applicant to confirm with respect to its group that it has sufficient working capital for at least 12 months has been removed, a similar requirement under the EU prospectus regime is likely to mean that working capital disclosure is unlikely to change meaningfully;
- independent business - the requirement that the applicant demonstrate that it carries out an independent business as its main activity has been removed; and
- controlling shareholders – the requirement to have a written agreement in place with any controlling shareholder has been removed (although it remains to be seen whether market practice will see institutional investors seeking this notwithstanding the relaxation of the Listing Rules).
Sponsor Regime
- The concept of the Sponsor has been removed. A replacement requirement for an Equity Listing Agent has been introduced, but the scope of its role has been significantly reduced. Issuers will no longer be required to have a Sponsor (or now Equity Listing Agent) appointed for the duration of their listings and an Equity Listing Agent will only be required on first admission and on each subsequent admission of securities where a prospectus is required. This dispensation is however not afforded to REITs which will be required to have an Equity Listing Agent appointed when making an application for listing and for the duration of their listing.
Comment
We expect the revisions to the Listing Rules to be universally welcomed across the Irish PLC landscape. The removal of various continuing obligations will make day-to-day corporate activities more straightforward for issuers listed on Euronext Dublin, with the absence of the previous significant transaction rules likely to be particularly welcomed in boardrooms.
Further, the streamlining of the criteria for admission now puts Euronext Dublin on a level playing field with other regulated markets across the Euronext network and opens up the possibility for cross-listings across the Euronext network, which is to be welcomed.
Please contact your usual McCann FitzGerald LLP contact if would like to discuss any of the proposed changes under the revised Irish Listing Rules and/or their impact.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
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