Contributed By Walkers
The continuing obligations applicable to issuers of debt securities listed on Euronext are set out in:
Although it is outside the scope of this Q&A, Regulation (EU) 2017/2402 (the "Securitisation Regulation") also imposes certain transparency and reporting requirements on issuers of debt securities (listed or unlisted). The application of the Securitisation Regulation would need to be analysed on a case by case basis.
Continuing obligations for issuers of debt securities on Euronext include:
Issuers of Euronext listed debt securities are, subject to certain exemptions, required, in accordance with the Euronext Rules, to publish annual reports and accounts as soon as possible after they have been approved and, in any event, by no later than the timeframe permitted under national legislation.
The Euronext Rules require annual reports and accounts to be: (i) prepared in accordance with an issuer's national law and, in all material respects, with national accounting standard or IAS, and (ii) independently audited and reported on.
Under the transparency regime, issuers of securities admitted to trading on a regulated market are, subject to certain exemptions, required to:
i) the audited financial statements of the issuer;
ii) a management report; and
iii) a responsibility statement.
i) a condensed set of financial statements;
ii) an interim management report; and
iii) responsibility statements.
The provisions regarding periodic financial reporting set out in the transparency regime do not apply to issuers that exclusively issue wholesale debt securities (ie, debt securities the denomination per unit of which is:
Equality of Treatment
Issuers of debt securities listed on Euronext must, in accordance with the requirements of the transparency regime, ensure that all holders of debt securities ranking pari passu are treated equally in respect of all the rights attaching to those debt securities.
Exercise of Rights and Meetings
In accordance with the requirements of the transparency regime, issuers of Euronext listed debt securities:
a) the place, time and agenda of meetings of holders of the securities;
b) the payment of interest;
c) the exercise of any conversion, exchange, subscription or cancellation rights and repayment; and
d) the rights of holders of the securities to exercise their rights in relation to the matters mentioned at (a)-(c) above.
Disclosure of Regulated Information
Under the transparency regime, issuers must disclose regulated information to a Regulatory Information Service ("RIS").
Where an Issuer of Euronext listed debt securities discloses regulated information to a RIS, it must simultaneously notify the CBI.
Disclosure of Information
Under the transparency regime, an issuer must notify the public without delay of any change in the rights of holders of the securities (including changes in the terms and conditions of the securities which could indirectly affect those rights, resulting in particular from a change in loan terms or in interest rates.
Corporate governance requirements
In order to have securities listed on Euronext Dublin and admitted to trading on Euronext, the issuer must be duly incorporated and otherwise validly established according to the relevant laws of its place of incorporation and establishment, and be operating in conformity with its constitutional documents. The directors of an issuer are required, under the Euronext Rules, collectively, to have appropriate expertise and experience for the management of the issuer's business.
Specific rules apply to transactions (for example, related party transactions or significant transactions or transactions by directors) post-listing.
Issuers of Euronext listed debt securities will also be subject to the market abuse regime. The market abuse regime prohibits insider dealing, unlawful disclosure of inside information and market manipulation. Chapter 3 of MAR sets out the obligations of issuers in respect of public disclosure of inside information, compiling and maintaining insider lists and reporting of transactions by managers. Under the market abuse regime, Issuers of Euronext listed debt securities are required to, inter alia:
In addition, as noted at 8.3 Rules Regarding Stabilisation and Market Manipulation above, the delegated and implementing acts relating to MAR issued by the European Commission impose detailed regulatory technical standards and requirements in respect of specific issues, such as rules around buy-back programmes/stabilisation measures.
Issuers of debt securities to be listed on the GEM will be subject to the detailed continuing obligation provisions contained in the GEM Listing Rules and will also need to comply with MAR and the Irish and European market abuse regimes.
There are certain differences in the continuing requirements for retail and wholesale offers of debt securities for example, as outlined in 13.1 Continuing Obligations Applicable to Listed Debt Securities, certain provisions of the transparency regime only apply to retail offers.
These obligations apply to foreign incorporated issuers, except that there are equivalency provisions.
If Euronext Dublin considers that an issuer has contravened the Euronext Rules and considers it appropriate to do so, it may impose sanctions on the issuer including censuring of the issuer and/or suspending or canceling the listing of the issuer's securities. To the extent that the Disciplinary Committee determines that the failure to comply with the Euronext Rules is due to a failure by the directors of the issuer to discharge their duties, Euronext Dublin may, amongst other things, censure the relevant director(s) and, in addition, publish such censure.
Issuers of securities listed on Euronext are also subject to the prospectus, market abuse and transparency regimes. There are wide ranging penalties for a breach of any of the above regimes including criminal liability, criminal and administrative sanctions and civil liability. The transparency and market abuse regimes are most relevant in the context of continuing obligations.
As noted above, a wide range of potential penalties for breaches of the market abuse regime may apply, including civil and criminal penalties (including terms of imprisonment) and administrative sanctions, with potential prescribed fines of up to EUR15,000,000 or 15% of turnover for the most serious breaches. Similarly, penalties for breaches of the transparency regime include civil and criminal penalties (including terms of imprisonment) and administrative sanctions and potential prescribed fines of up to EUR1,000,000 or as may be determined under the CBI's administrative sanctions regime.
Issuers of debt securities listed on the GEM are also subject to the market abuse regime and, accordingly, are subject to the same penalties under the market abuse regime outlined above. Issuers of debt securities listed on the GEM are also subject to the various penalties contained in the GEM Listing Rules.