Procedures & Obligations

A simplified procedure to access the market and lighter periodic disclosure requirement obligations

The Prospectus Directive provides that any admission of securities on an EU regulated market is subject to the publication of a prospectus approved by the competent local regulator. The Fast Path Listing Procedure is of particular interest since it allows a non EU issuer already listed in the US (NYSE or NASDAQ)  to list its securities on a Euronext regulated market, thus extending to investors the protection of the rules applicable to such a market while granting to issuers certain exemptions that ease access to the market and the periodic disclosure obligations imposed on other issuers listed on regulated markets.

A facilitated access to the market

Euronext has initiated the adoption in France, the Netherlands, Belgium and Portugal, of a Fast Path Listing Procedure for non EU issuers already listed on the NYSE or NASDAQ, and therefore, reporting to the SEC. While other foreign issuers are not expressly excluded from the Fast Path Listing Procedure, at this point only SEC reporting issuers are allowed to use the procedure, due to the strong convergence between the EU and the US disclosure requirements. The procedure avoids the need to draft and/or translate a separate prospectus in order to obtain the approval of the competent EU regulator.

Depending on the position of the various competent authorities, the acceptance, for listing purposes, of documentation filed with the SEC will apply to any such documentation, whether reviewed by the SEC or merely filed with the SEC, since documentation that is not specifically reviewed by the SEC still has to comply with applicable SEC disclosure requirements. More specifically, under the Fast Path Listing Procedure, issuers already listed in the US that request admission to trading on a Euronext regulated market, will be in a position to complete an application for approval of a prospectus by the competent regulators in such jurisdiction using documents they have filed with the SEC “during the last 12 months”; provided they are not making any public offering in such jurisdiction since the Fast Path Listing Procedure is limited to a technical listing (e.g. an admission to trading with no public fund raising). The documentation that would form the “EU Prospectus” for purposes of the foregoing would consist of the issuer’s Form 20-F (if a non US issuer) or Form 10-K (if US issuer), its interim accounts (filed on Form 10-Q in the case of a U.S. issuer or a 6-K in the case of a non-US issuer), and any other current reports containing material information, together with a short wrapper containing, inter alia, the main characteristics of the issuer (including corporate form, registered office, equity shares  authorised, equity shares outstanding), of the listed securities (including nature, rights attached to the securities, settlement), and specific information relating to tax as well as a statement from the issuer on liability and on accuracy of disclosure.

In any case, the compiled “EU prospectus” approved by the competent EU regulator must be posted on the issuer’s internet website and made available to the investors where the securities of the issuer are listed.

Simplified periodic reporting obligation

The Transparency Directive contains provisions allowing the recognition by EU regulators of  documents filed by non-EU issuers in their home country, provided the rules pursuant to which such documents are prepared are considered equivalent to the requirements under the Transparency Directive. Although there is a high level of convergence regarding disclosure obligations, EU regulators have approached the simplification of the ongoing disclosure obligations for issuers listed through the Fast Path Listing Procedure with caution. The market authorities throughout Europe are clearly aware of the fact that, in order for the Fast Path Listing Procedure to be a success, the ongoing disclosure obligations should be eased as far as permitted by the Transparency Directive.

This should be the case in particular when dealing with SEC reporting companies, where the reporting obligations are in substance equivalent to or more stringent than those provided under the Transparency Directive. Although, the formal recognition of such equivalence by the EU regulators is still to come, the AMF has already waived numerous specific obligations required under French law in the context of a listing on the specific Professional compartment of Euronext, such as the permission for those “Fast Path” issuers listed to publish all regulated information in English.