New rules will make it easier to list securities – but what does this mean in practice?
Sweden is now implementing several legislative amendments as a result of the EU’s efforts to strengthen the European capital markets. The purpose is clear: to make it easier and cheaper for companies to raise capital through shares, bonds and other securities.
For many entrepreneurs and growth companies, the changes may mean new opportunities to access capital without being dependent on traditional bank financing.
Lower administrative costs
One of the most important changes concerns the prospectus rules.
A prospectus is the comprehensive information document that companies must prepare in certain situations when securities are offered to the public or admitted to trading on a regulated market.
Producing a prospectus is often both time-consuming and costly. For smaller companies, the cost has sometimes been disproportionately high in relation to the capital to be raised.
The threshold for when a prospectus is required is now being raised from EUR 2.5 million to EUR 12 million over a twelve-month period.
For many small and medium entities (SMEs), this means that capital raises can be carried out with significantly less administration and lower costs.
Ability to use English
Another important change is that Swedish companies that admit securities to trading on a regulated market or direct offers to investors in Sweden will have the opportunity to choose between Swedish and English when preparing a prospectus.
For companies with international investors or international growth ambitions, this is a welcome modernization.
The capital markets are highly international, and many investors prefer to work with English-language documentation.
Strengthened role for emerging markets
The legislative amendments also allow multilateral trading facilities to register specific growth markets for SMEs.
The goal is to create better conditions for smaller companies to gain access to the capital market without having to meet the same requirements that apply to larger listed companies.
For entrepreneur-led companies, this can help create a clearer path from private ownership to a public capital market.
What does this mean for businesses?
For many companies, the changes mean:
- Lower capital raising costs
- Fewer administrative obstacles
- Greater flexibility in financing
- Better opportunities to attract international investors
- A more accessible capital market for SMEs
At the same time, companies should remember that the regulations regarding capital raising, disclosure, corporate governance and market abuse remain complex. Simplifying the prospectus requirements does not mean that the legal risks disappear.
Forsety Legal’s comment
For many years, European companies have been more dependent on bank financing than their American counterparts. The EU’s reforms aim to strengthen the role of capital markets and make it easier for companies to finance growth through investment from the market.
For entrepreneurs and growth companies, this is a positive development. At the same time, the need for qualified advice on capital raising, investor relations, corporate governance and market rules is increasing.
Forsety Legal has experience in capital raising, international stock exchange listings, reverse acquisitions (RTO), corporate governance and international transactions. For companies that are considering raising external capital or preparing for a future listing, the new rules may create opportunities that were not previously practical or economically realistic.
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