What changed

14.2.2024

European Parliament

PROVISIONAL AGREEMENT RESULTING FROM INTERINSTITUTIONAL NEGOTIATIONS

2019-2024

Subject: Proposal for a directive of the European Parliament and of the Council amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC

TEXTS ADOPTED

(COM(2022)0760 – C90415/2022 – 2022/0405(COD))

P9_TA(2024)0351

The interinstitutional negotiations on the aforementioned proposal for a directive have led to a compromise. In accordance with Rule 74(4) of the Rules of Procedure, the provisional agreement, reproduced below, is submitted as a whole to the Committee on Economic and Monetary Affairs for decision by way of a single vote.

Increasing the attractiveness of public capital markets and facilitating access to capital for SMEs – amending Directive

2022/0405 (COD)

Committee on Economic and Monetary Affairs

Proposal for a

PE749.149

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

European Parliament legislative resolution of 24 April 2024 on the proposal for a directive of the European Parliament and of the Council amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC (COM(2022)0760 – C9-0415/2022 – 2022/0405(COD))

amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC

(Ordinary legislative procedure: first reading)

(Text with EEA relevance)

The European Parliament,

THE– EUROPEANhaving PARLIAMENTregard ANDto THEthe COUNCILCommission OFproposal THEto EUROPEANParliament UNION,and the Council (COM(2022)0760),

Having– having regard to Article 294(2) and Articles 50, 51(2) and 114 of the Treaty on the Functioning of the European Union, andpursuant into particularwhich Articlethe 50,Commission 53(1)submitted andthe 114proposal thereof,to Parliament (C90415/2022),

Having– having regard to Article 294(3) of the proposalTreaty fromon the Functioning of the European Commission,Union,

After transmission of the draft legislative act to the national parliaments,

– having regard to the opinion of the European Economic and Social Committee of 23 March 2023,

Having regard to the opinion of the European Economic and Social Committee,

– having regard to the provisional agreement approved by the responsible committee under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council representative by letter of 14 February 2024 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

Acting in accordance with the ordinary legislative procedure, Whereas:

– having regard to Rule 59 of its Rules of Procedure,

(1) Directive 2014/65/EU of the European Parliament and of the Council has been amended by Regulation (EU) 2019/2115 of the European Parliament and of the Council, which introduced proportionate alleviations to enhance the use of SME growth markets and to reduce the excessive regulatory requirements for issuers seeking admission of securities on SME growth markets, while preserving an appropriate level of investor protection and market integrity. However, to streamline the listing process and to render the regulatory treatment of companies more flexible and proportionate to their size, further amendments to Directive 2014/65/EU are necessary.

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0303/2023),

(2) Directive 2014/65/EU and Commission Delegated Directive (EU) 2017/593 set out the conditions under which the provision of investment research by third parties to investment firms providing portfolio management or other investment or ancillary services is not to be regarded as an inducement. In order to foster more investment research on companies in the Union, in particular small and middle capitalisation companies, and to bring those companies greater visibility and more prospect of attracting potential investors, it is necessary to introduce ▌ amendments to that Directive.

1. Adopts its position at first reading hereinafter set out;

(3) The Articles concerning research laid down in Directive 2014/65/EU require investment firms to separate payments which they receive as brokerage commissions from the compensation perceived for providing investment research (‘research unbundling rules’), or to pay for investment research from their own resources and assess the quality of the research they purchase based on robust quality criteria and the ability of such research to contribute to better investment decisions. In 2021, those rules have been amended by Directive (EU) 2021/338 of the European Parliament and of the Council to allow for bundled payments for execution services and research for small and middle capitalisation companies below a market capitalisation of EUR 1 billion. The decline of investment research has, however, not slowed down.

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

(4) In order to revitalise the market for investment research and to ensure sufficient research coverage of companies, in particular for small and middle-capitalisation companies, the research unbundling rules need to be further adjusted to offer investment firms more flexibility in the way that they choose to organise payments for execution services and research, thus limiting the situations where separate payments may be too cumbersome.

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Accordingly, the market capitalisation threshold for companies for which the re-bundling of payments for trading execution and research would be possible should be removed to allow investment firms to proceed in the way they find most appropriate in terms of payments for research and execution services. Doing so would, however, require transparency vis-a-vis clients as to the choice of payment method.

P9_TC1-COD(2022)0405

Investment firms should inform their clients whether they apply a separate or joint payment method for the provision of third-party research and execution services.

Position of the European Parliament adopted at first reading on 24 April 2024 with a view to the adoption of Directive (EU) 2024/… of the European Parliament and of the Council amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC

The choice of an investment firm as to whether to apply separate or joint payments for research and execution services should be made in compliance with the investment firm’s policy. That policy should be provided to clients and should indicate, depending on the method of payment selected by the firm, the type of information on costs attributable to third-party research. In the case of joint payment for research and execution services, clients should be entitled to receive, upon request and on an annual basis, information on the total costs attributable to third-party research provided to the investment firm, if known to the firm. The investment firm’s policy on separate or joint payments should also include information on the measures to prevent or manage the conflicts of interest arising from the use or delivery of third-party research to clients while providing investment services to those clients.

(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Directive (EU) 2024/2811.)

Regardless of the selected payment method, the investment firm should also perform an assessment of the quality, usability and value of the research it uses, to ensure that such research contributes to enhancing the investment decision process of the firm’s clients, where that research is distributed directly to them or where used by the portfolio management services of the firm.

Sales and trading commentary comprises analyses of market conditions, trading and trade execution ideas, trade execution management tools and other bespoke analyses related to executing a trade in financial instruments. Such sales and trading commentary is incidental to the execution of transactions in financial instruments as it allows investment firms offering execution services to demonstrate the quality of the execution they achieve for their clients. Therefore, sales and trading commentary cannot be separated from execution services and should not be considered to be investment research.

(4a) The adjustment of unbundling rules alone will not suffice to revitalise the market of research investment and address the longstanding shortage of research coverage of small and middle-capitalisation companies. Further measures should be introduced to improve the research coverage of small and middle-capitalisation companies.

Putting in place organisational arrangements ensuring that issuer-sponsored research is produced in compliance with an EU code of conduct for issuer-sponsored research should enhance the trust in and the use of issuer-sponsored research. The code of conduct should be established on the basis of regulatory technical standards to be developed by ESMA.

Another measure to improve the research coverage of small and middle-capitalisation companies should be to allow issuers paying for issuer-sponsored research to make such research more visible to the public by giving them the possibility of submitting such research to the relevant collection body as defined in Article 2(2) of Regulation (EU) 2023/2859 of the European Parliament and of the Council of 13 December 2023 establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability, subject to it being accompanied by the necessary metadata. Such measures should not prevent Member States or ESMA from considering and assessing additional measures based on public or private initiatives, such as the establishment of dedicated research marketplaces, drawing inspiration from successful initiatives launched in recent years across several financial centres, to revitalise research on small and middle-capitalisation companies and increase their visibility.

(5) In order to reinforce the recognition of issuer-sponsored research prepared in compliance with the EU code of conduct for issuer-sponsored research and to avoid such research being confused with other forms of recommendation that do not comply with the EU code of conduct, only issuer-sponsored research prepared in compliance with the EU code of conduct for issuer-sponsored research should be authorised to be labelled as such. Recommendations of the type covered by Article 3(1), point (35), of Regulation (EU) No 596/2014 that do not meet the conditions required for issuer-sponsored research should be treated as marketing communications for the purposes of Directive 2014/65/EU and identified as such.

(5a) In order to ensure that issuer-sponsored research, labelled as such, is produced in compliance with the EU code of conduct, competent authorities should be given supervisory powers to control that investment firms that produce or distribute such research, have in place organisational arrangements to ensure such compliance. Where those firms do not comply with the EU code of conduct, the competent authorities should be empowered to suspend the distribution of such research and to warn the public that despite its label, the issuer-sponsored research was not produced in compliance with the EU code of conduct. Those supervisory powers should be without prejudice to the general supervisory powers and to the power to adopt sanctions.

(6) Directive 2014/65/EU introduced the SME growth market category to increase the visibility and profile of markets specialised in SMEs and foster the development of common regulatory standards in the Union of markets specialised in SMEs. SME growth markets play a key function in facilitating access to capital for those smaller issuers by catering for their needs. To foster the development of such specialised markets and to limit the organisational burden for the operators of multilateral trading facilities (MTFs), it is necessary to allow the segment of an MTF to apply to become an SME growth market provided that such segment is clearly separated from the rest of the MTF.

(6a) To reduce the risk for fragmentation of liquidity for SME shares, considering the lower liquidity of these instruments, Article 33(7) of Directive 2014/65/EU requires that a financial instrument that is admitted to trading on one SME growth market may only be traded also on another SME growth market where the issuer of the financial instrument has not objected to it. However, the Article currently does not provide the corresponding requirement for non-objection by the issuer where the second trading venue is another type of trading venue than an SME growth market. Hence, the issuers non-objection requirement regarding the admission to trading of their instruments already admitted to trading on an SME growth market should be extended to any other trading venue in order to in order to further reduce the risk of fragmentation of the liquidity of these instruments. If a financial instrument admitted to trading on an SME growth market is also traded on another type of trading venue, the issuer should follow any obligation relating to corporate governance or initial, ongoing or ad hoc disclosure with regard to the latter trading venue.

(7) Directive 2001/34/EC of the European Parliament and of the Council lays down rules concerning listing on Union markets. That Directive aims at coordinating the rules on the admission of securities to official stock exchange listing and on information to be published on those securities to provide equivalent protection for investors at Union level. That Directive also lays down the rules of the regulatory and supervisory framework for Union primary markets. In the course of the years, Directive 2001/34/EC has been amended significantly several times. Directives 2003/71/EC of the European Parliament and of the Council and Directive 2004/109/EC of the European Parliament and of the Council have replaced most of the provisions harmonising the conditions for the provision of information regarding requests for the admission of securities to official stock exchange listing and the information on securities admitted to trading, and have made large parts of Directive 2001/34/EC redundant. In light of this and the fact that Directive 2001/34/EC as a minimum harmonisation Directive gives Member States a rather broad discretion to deviate from the rules laid down in that Directive, Directive2001/34/EC should be repealed to allow a single rule book at Union level.

(8) Directive 2014/65/EU, like Directive 2001/34/EC, provides for the regulation of markets of financial instruments and strengthens investor protection in the Union. Directive 2014/65/EU also sets out rules on the admission of financial instruments to trading. ▌Extending the scope of Directive 2014/65/EU to cover specific provisions from Directive 2001/34/EC will ensure that all relevant provisions from Directive 2001/34/EC are maintained. A number of provisions of Directive 2001/34/EC, including the requirements on free float and market capitalisation which still apply, are enforced by competent authorities and are considered important rules for seeking admission to trading of shares on regulated markets in the Union by market participants. It is therefore necessary to transfer those rules in Directive 2014/65/EU to set out, in a new provision of that Directive, specific minimum conditions for the admission to trading of shares on regulated markets. The application of that new provision should complement the general provisions on the admission of financial instrument to trading laid down in Directive 2014/65/EU.

(9) The level of minimum free float of 25% required by Directive 2001/34/EC is considered excessive and no longer appropriate. To allow for more flexibility for issuers and to make Union capital markets more competitive, the minimum free float requirement should be decreased to 10%, which is a threshold that ensures for a sufficient level of liquidity in the market. However, to better take into account the characteristics and sizes of the issuances of shares, Member States should allow alternative ways to measure whether a sufficient number of shares have been distributed to the public. Compliance with the 10% threshold or with the alternative requirements provided at national level for ensuring a minimum free float should be assessed at time of admission. The free float requirement laid down in Directive 2001/34/EC that a sufficient number of shares is to be distributed to the public in one or more Member States refers to the public within the Union and the European Economic Area (EU/EEA). That geographical restriction of the free float requirement to the EU/EEA should not be maintained as Directive 2014/65/EU does not provide for such restriction for financial instruments admitted to trading.

Certain requirements set out in Directive 2001/34/EC are already covered by provisions laid out in other Union legislation in force or became obsolete. Hence they should not be transferred to Directive 2014/65/EU. For instance the requirement for a company to publish or file its annual accounts for a specific period of time is already included in Regulation (EU) 2017/1129 of the European Parliament and of the Council. Similarly, Directive 2014/65/EU already lays down provisions to designate competent authorities. Furthermore, ▌ the requirement for ▌ the minimum amount of the loan for debt securities no longer reflects market practice. Therefore those provisions have not been transferred to Directive 2014/65/EU.

(10) The concept of admission of securities to official listing on stock exchanges provided for in Directive 2001/34/EC is no longer prevailing, given market developments, as Directive 2014/65/EU already provides for the concept of ‘admission of financial instruments to trading on a regulated market’. While in some Member States the two concepts ‘admission to official listing’ and ‘admission to trading on a regulated market’ are used interchangeably, in other Member States the concept of ‘admission to official listing’ continues to play an important role alongside the concept of ‘admission to trading on a regulated market’, in particular by providing an alternative to issuers of securities, notably debt securities, who seek increased visibility but for whom admission to trading is not a relevant or viable option. The repeal of Directive 2001/34/EC by this Directive should be without prejudice to the validity and continuation of the regimes of admission to official listing on stock exchanges in those Member States who would like to continue to apply the regime. In any case, Member States should retain the ability to provide for and regulate such regimes under national legislation.

(11) To enhance the visibility of listed companies, in particular small and middle-capitalisation companies and to adapt the listing conditions to improve requirements for issuers, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of amending Directive 2014/65/EU. The adoption of the listing rules in the Union should also reflect market practice for it to be effective and promote competition. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(12) Directive 2014/65/EU should therefore be amended accordingly.

(13) Since the objectives of this Directive, namely to ease Union small and middle-capitalisation companies capitalisation companies’ access to capital markets, and to increase the coherence of Union listing rules cannot be sufficiently achieved by the Member States but can rather, by reason of the improvements and effects sought, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Amendments to Directive 2014/65/EU

Directive 2014/65/EU is amended as follows:

(1) in Article 4(1), point (12) is replaced by the following:

‘(12) ‘SME growth market’ means an MTF, or a segment of an MTF, that is registered as an SME growth market in accordance with Article 33;’;’

(2) Article 24 is amended as follows:

(a) the following paragraphs ▌ are inserted:

‘3a. Research used by, or distributed to, clients or potential clients by investment firms providing portfolio management or other investment or ancillary services that has been produced by those investment firms, or produced by third parties and provided to those investment firms, shall be fair, clear and not misleading. Research shall be clearly identifiable as such or in similar terms, provided that all conditions laid down in Delegated Regulation EU 2017/565 applicable to the research are met.

3b. Investment firms providing portfolio management or other investment or ancillary services shall ensure that the research they distribute to clients or potential clients which is paid for, fully or partially, by an issuer shall be labelled as ‘issuer-sponsored research’ only if it is produced in compliance with the EU code of conduct for issuer-sponsored research.

ESMA shall develop draft regulatory technical standards to establish an EU code of conduct for issuer-sponsored research. That code of conduct shall set out standards of independency and objectivity, and specify procedures and measures for the effective identification, prevention and disclosure of conflicts of interest.

In developing the regulatory technical standards on the EU code of conduct, ESMA shall take into account the content and parameters of codes of conduct for issuer-sponsored research which have been established at national level prior to the date of application of the regulatory technical standards, especially where such codes have been widely endorsed and adhered to. ESMA shall also, where applicable, take into account the relevant obligations and standards on investment recommendations set out in Article 20 of Regulation (EU) No 596/2014.

ESMA shall submit those draft regulatory technical standards to the Commission by … [12 months from the date of entry into force of this amending Directive].

Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council .

The EU code of conduct for issuer-sponsored research shall be made publicly available on ESMA’s website.

ESMA shall assess on a regular basis and at least every five years whether the EU code of conduct needs to be reviewed, in which case it shall submit amended draft regulatory technical standards to the Commission.

Member States shall provide that investment firms that produce or distribute issuer-sponsored research have in place organisational arrangements to ensure that such research is produced in compliance with the EU code of conduct as referred to in paragraph 3b and complies with paragraphs 3a, 3b and 3d.

3c. Member States shall ensure that any issuer may submit its issuer-sponsored research, as referred to in paragraph 3b of this Article, to the relevant collection body as defined in ▌ Article 2(2) of Regulation (EU) 2023/2859.

When submitting such information to the collection body, the issuer shall ensure that it is accompanied by metadata specifying that the information complies with the EU code of conduct for issuer-sponsored research. Such information is not regulated information within the meaning of Directive 2004/109/EU of the European Parliament and of the Council nor investment research within the meaning of Directive 2014/65/EU and is therefore not subject to the same level of regulatory scrutiny as such regulated information or investment research.

3d. Research that is labelled as "issuer-sponsored research" shall indicate on its front page in a clear and prominent way that it has been prepared in accordance with the EU code of conduct referred to in paragraph 3b. Any other research material paid fully or in part by the issuer but not prepared in compliance with that EU code of conduct ▌ shall be labelled as marketing communication. ’

(b) ▌ paragraph 9a is amended as follows:

(i) the first subparagraph is replaced by the following:

‘9a. The provision of research by third parties to an investment firm providing portfolio management or other investment or ancillary services to clients is to be regarded as fulfilling the obligations under paragraph 1 if:’

(a) an agreement has been entered into between the investment firm and the third-party provider of research and execution services, establishing a methodology for remuneration, including how the total cost of research is generally taken into account when establishing the total charges for investment services;

(b) the investment firm informs its clients about its choice to pay either jointly or separately for execution services and research and makes available to them its policy on payments for execution services and third-party research, including the type of information that may be provided depending on the firm’s choice of payment and, where relevant, how the investment firm prevents or manages conflicts of interest pursuant to Article 23 when providing joint payments for execution services and research;

(c) the investment firm assesses the quality, usability and value of the research used, as well as the ability of the research used to contribute to better investment decisions, on an annual basis. ESMA may develop guidelines for investment firms for the purpose of conducting those assessments;

(d) where the firm chooses to pay separately for execution services and third-party research, the provision of research by third parties to investment firms providing portfolio management or other investment or ancillary services to clients is received in return for either of the following:

i) direct payments by the investment firm out of its own resources;

ii) payments from a separate research payment account controlled by the investment firm.

(ii) the following subparagraphs are added:

For the purpose of this Article, trading commentary and other bespoke trade advisory services intrinsically linked to the execution of a transaction in financial instruments shall not be considered to be research.

Where a research provider is not engaged in execution services and is not part of a financial services group that includes an investment firm that offers execution or brokerage services, the provision of research to investment firms providing portfolio management or other investment or ancillary services to clients is regarded as fulfilling the obligations under paragraph 1. In such cases, the investment firm shall comply with the requirement under point (c) of the previous subparagraph.

Where known to them, investment firms shall keep a record of the total costs attributable to third-party research provided to them. Upon request, such information shall be made available on an annual basis to the investment firm’s clients.

By … [4 years from the date of entry into force of this amending Directive], ESMA shall prepare a report with a comprehensive assessment of market developments regarding research within the meaning of this Article. That assessment shall incorporate at least the research coverage of listed firms, the evolution of the costs and quality of that research, the impact of joint payments on execution quality, the share of separate and joint payments made by investment firms to third party providers for execution services and research, and the level of fulfilment of the demand for research by investors and other buyers.

Based on that report, the Commission may, if appropriate, submit to the European Parliament and to the Council a legislative proposal concerning changes to the rules laid down in this Directive regarding research.’

(3) Article 33 is amended as follows:

(a) paragraphs 1 and 2 are replaced by the following:

‘1. Member States shall provide that the operator of an MTF may apply to its home competent authority to have the MTF or a segment thereof, registered as an SME growth market.

2. Member States shall provide that the home competent authority may register the MTF, or a segment thereof, as an SME growth market if the competent authority receives an application as referred to in paragraph 1 and is satisfied that the requirements in paragraph 3 are complied with in relation to the MTF, or that the requirements in paragraph 3a are complied with in relation to a segment of the MTF.;’

(b) the following paragraph is inserted:

‘3a. Member States shall ensure that the relevant segment of the MTF is subject to effective rules, systems and procedures which ensure that the conditions referred to in paragraph 3 and all of the following conditions have been complied with:

(a) the segment of the MTF registered as ‘SME growth market’ is clearly separated from the other market segments operated by the MTF operator, which is inter alia indicated by a different name, different rulebook, different marketing strategy, and different publicity, as well as a specific allocation of the market identification code to the SME growth market segment;

(b) the transactions made on the specific SME growth market segment are clearly distinguished from other market activity within the other segments of the MTF;

(c) upon request of the MTF’s home competent authority, the MTF shall provide a comprehensive list of the instruments listed on the SME growth market segment concerned, as well as any information on the operation of the SME growth market segment that the competent authority may request.’;’

(c) paragraphs 4 to 8 are replaced by the following:

‘4. Compliance by the investment firm or market operator operating the MTF, or a segment thereof, with the conditions laid down in paragraphs 3 and 3a is without prejudice to the compliance with other obligations under this Directive relevant to the operation of MTFs. Without prejudice to paragraph 7, the investment firm or market operator operating the MTF, or a segment thereof, may impose additional requirements.

5. Member States shall provide that the home competent authority may deregister an MTF, or a segment thereof, as an SME growth market in any of the following cases:

(a) the investment firm or market operator operating the MTF, or a segment thereof, applies for its deregistration;

(b) the requirements in paragraph 3 or 3a are no longer complied with in relation to the MTF, or a segment thereof.

6. Members States shall require that if a home competent authority registers or deregisters an MTF, or a segment thereof, as an SME growth market under this Article, that authority shall as soon as possible notify ESMA of that registration or deregistration. ESMA shall publish on its website a list of SME growth markets and shall keep that list up to date.’;’

7. Member States shall require that where a financial instrument of an issuer is admitted to trading on one SME growth market, the financial instrument may also be traded on another trading venue only where the issuer has been informed and has not objected. Where the other trading venue is another SME growth market, the issuer shall not be subject to any obligation relating to corporate governance or initial, ongoing or ad hoc disclosure with regard to the latter SME growth market. Where the other trading venue is not an SME growth market, the issuer shall be informed of any obligation relating to corporate governance or initial, ongoing or ad hoc disclosure with regard to the latter trading venue which it will be subject to. ESMA shall develop guidelines by ...[ date of application] on the communication methods to be used and the relevant timelines.

‘8. The Commission is empowered to adopt delegated acts in accordance with Article 89 to supplement this Directive by further specifying the requirements laid down in paragraphs 3 and 3a of this Article. Those requirements shall take into account the need to maintain high levels of investor protection to promote investor confidence in those markets while minimising the administrative burdens for issuers on the market. They shall also take into account that de-registrations do not occur nor shall registrations be refused merely because of a temporary failure to comply with the requirement laid down in paragraph 3, point (a), of this Article.’;’

(4) the following article ▌ is inserted:

‘ Article 51a

Specific conditions for the admission of shares to trading

1. Member States shall ensure that regulated markets require that the foreseeable market capitalisation of the shares for which admission to trading is sought, or if this cannot be assessed, the company’s capital and reserves, including profit and loss, from the last financial year, shall be at least EUR 1 000 000 or an equivalent amount in a national currency other than the Euro.

2. Paragraph 1 shall however not apply to the admission to trading of shares fungible with shares already admitted to trading.

3. Where, as a result of an adjustment of the equivalent amount in a national currency other than the euro, the market capitalisation expressed in the national currency remains for a period of one year at least 10 % more, or at least 10 % less, than EUR 1 000 000, the Member State shall, within the 12 months following the expiry of that period, adjust its laws, regulations or administrative provisions to comply with paragraph 1.

4. Member States shall ensure that regulated markets require that at least 10% of the subscribed capital represented by the class of shares concerned by the application for admission to trading is held by the public at the time of admission.

5. By way of derogation from paragraph 4, Member States may require that regulated markets establish at least one of the following requirements for an application for admission to trading of shares at the time of admission:

(a) a sufficient number of shares is held by the public;

(b) the shares are held by a sufficient number of shareholders;

(c) the market value of the shares held by the public represents a sufficient level of subscribed capital in the class of shares concerned.

6. Where admission to trading is sought for shares fungible with shares already admitted to trading, regulated markets shall assess, to fulfil the requirement laid down in paragraph 4, whether a sufficient number of shares has been distributed to the public in relation to all the shares issued and not only in relation to the shares fungible with shares already admitted to trading.

7. The Commission is empowered to adopt delegated acts in accordance with Article 89 to amend this Directive by modifying the thresholds referred to in paragraphs 1 and 3 or in paragraph 4 or in both, when the applicable thresholds impede the liquidity on public markets taking into account the financial developments.’;’

(4a) In Article 69(2), first subparagraph, the following points are added:

‘(v) take all necessary measures to control that investments firms have in place organisational arrangements to ensure that issuer-sponsored research that they produce or distribute is produced in compliance with the EU code of conduct for issuer-sponsored research;

(w) suspend the distribution by investment firms of any issuer-sponsored research not produced in compliance with the EU code of conduct issuer-sponsored research;

(x) issue warnings to inform the public that research which has been labelled as an issuer-sponsored research is not produced in compliance with the EU code of conduct issuer-sponsored research.’

(5) Article 89 is amended as follows:

(a) paragraphs 2 and 3 are replaced by the following:

‘2. The delegation of power referred to in Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4), Article 54(4), Article 58(6), Article 64(7), Article 65(7) and Article 79(8) shall be conferred on the Commission for an indeterminate period of time.

3. The delegation of power referred to in Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4) Article 54(4), Article 58(6), Article 64(7), Article 65(7) and Article 79(8) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.;’

(b) paragraph 5 is replaced by the following:

‘5. A delegated act adopted pursuant to Article 2(3), Article 2(4), Article 4(1)(2), second subparagraph, Article 4(2), Article 13(1), Article 16(12), Article 23(4), Article 24(13), Article 25(8), Article 27(9), Article 28(3), Article 30(5), Article 31(4), Article 32(4), Article 33(8), Article 51a(7), Article 52(4), Article 54(4), Article 58(6), Article 64(7), Article 65(7) or Article 79(8) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.’.’

(5a) Article 90 is amended as follows:

(a) The following paragraph is added:

‘6. By ... [four years after entry into force of this Directive], the Commission shall review and assess the impact of the provision on non-objection in Article 33(7) on the competition among trading venues, in particular SME growth markets, and its impact on access to capital for SMEs. ’

Article 2

Repeal of Directive 2001/34/EC

Directive 2001/34/EC is repealed as of … [OP please insert the date = 24 months from date of entry into force of this Directive].

Article 3

Transposition and application

Member States shall adopt, publish and apply, by … [OP please insert the date 18 months from the date of entry into force of this Directive] at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.

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When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Article 4

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Article 5

Addressees

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President