GESSEL continues to contribute to the consultations concerning revision of the Market Abuse Regulation

This February, members of GESSEL’s capital markets practice have again contributed to consultations organised by the European Securities and Markets Authority (ESMA) with respect to review of the Market Abuse Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014, which institutes an EU-wide regulatory framework for publicly listed companies geared at ensuring protection of investors.

The consultations are geared at collating feedback from market participants and from the broader market environment concerning operation of the current capital markets regulations in practice and any perceived need for these regulations’ amendment. ESMA has adopted the position that capital markets in the European Union remain underdeveloped in juxtaposition with financial centres around the world, and that European businesses tend to utilise debt financing and capital financing less than their global competitors – tendencies which have implications for economic growth and macroeconomic resilience.

Accordingly, one of the main objectives of the Action Plan devised in September 2020 within the Capital Markets Union is comprised in providing businesses in general – and small and medium-sized enterprises in particular – with unfettered access to optimum financing forms, also in the public markets. ESMA has declared its willingness to consider even more simplifications to the rules concerning, among other subjects, issue prospectuses and information duties. The recent market studies and consultations were structured accordingly. Moreover, in October 2020 ESMA convened the Technical Experts and Stakeholders Group to monitor market developments from the perspective of SME growth. May 2021 brought publication of the TESG’s final report, which set out twelve specific recommendations for the European Commission and for Member States.

It is hoped that these consultations might facilitate streamlining of the relevant EU laws, enabling issuers to tap the public markets to finance growth and job creation while continuing to ensure a high level of investor protection and market integrity.