BETTER FINANCE welcomes ESMA's efforts to update and simplify the Guidelines on prospectus disclosure requirements following the adoption of the Listing Act. More generally, we note with concerns that the European Commission's broader simplification agenda may lead to the deprioritisation of important technical standards, to the detriment of other associated disclosure. We therefore encourage ESMA to raise such gaps with the Commission and, at least address them through its Guidelines updates wherever possible.
As outlined during the Listing Act legislative review, BETTER FINANCE support the standardisation and simplification of prospectuses, particularly to facilitate access to public capital markets for SMEs while harmonising supervisory practices. But we stress that revitalising EU capital markets requires much greater participation from individual investors, whose confidence depends on high-transparency standards, accessible information and robust investor protection. For this, prospectuses, and particularly their summaries, must become genuinely investor-friendly. With these upate, we call for ESMA to focus the clear, relevant and comparable information needed, rather relying on excessive removal or cross-referencing thereof, while minimising legalistic jargon. We deem that the goal overpining simplification must both quality and consistency of financial information, be it on key profit forecasts metrics, meaningful risk disclosures and alongside applicable sustainability-related information.
Moreover, investor protection must also extend to corporate accountability and shareholder rights. This is why we stress the importance of transparency on related-party transactions and call for greater clarity on differences between share classes, in light of the accompanying multiple-voting-rights framework for MTFs. Across the EU, harmonised information must reach the investor to mitigate asymmetries between investors and market participants while effort should prevent further fragmentation of cross-border (issuance) market practices. Aainst this backdrop, we broadly support ESMA's proposals within the remit of its Level 3 Guidelines, which we believe should reinforce the key principles established at Level 1, while recalling the importance of relevant Level 2 provisions for regulatory consistency. The Guidelines should also consider related investor-protection issues, as we further caution that the simplification agenda should not lead to the deprioritisation of key technical standards, as envisaged by the European Commission, which could bring much-needed clarity to retail investors and market participants alike. We thereby privide targeted comments and suggestions for clarification to ensure effective disclosure and investor protection.
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