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CEE LEGAL MATTERS COMPARATIVE LEGAL GUIDE: CAPITAL MARKETS 2020 CEE Legal Matters www.ceelegalmatters.com CEELM COMPARATIVE LEGAL GUIDE CAPITAL MARKETS 2020 Shearman & Sterling. Your premier law firm of choice in Emerging Markets, helping our clients navigate the most important and strategic transactions across the region. 2 shearman.com WWW.CEELEGALMATTERS.COM CEELM COMPARATIVE LEGAL GUIDE CAPITAL MARKETS 2020 FOREWORD: By Pawel J. Szaja, Partner, Shearman & Sterling Although the number of IPOs and bond offerings in While we focus pri- Central and Eastern Europe over the past few years re- marily on the countries mained significantly lower than in Western Europe, the of CEE, we have also capital markets in CEE have been playing an increas- included a UK chapter ingly important role in providing capital to local busi- to serve as a point nesses and an exit strategy for selling shareholders. The of reference and to IPOs of Nova Ljubjanska Banka in Slovenia, Avast in summarize the IPO/ the Czech Republic, and the Port of Tallinn in Estonia, bond offering process as well as bond offerings in Lithuania, Ukraine, Turkey, for those companies Poland, and Romania (to name just a few) constitut- in the region wishing ed some of the biggest offerings in Europe targeted to list on the London at local, regional, and international investors, and are Stock Exchange (as, testament to the significant potential of this region. indeed, a number have in recent years). In 2019, 30% The need for accessible and efficient capital markets is of all European IPO proceeds were derived from the also universally recognised by local and EU regulators, offerings on LSE, and despite Brexit and the ongoing investors, and market participants. coronavirus pandemic, the UK continues to be the most liquid market and the LSE the most active stock This guide sets out an overview of key requirements exchange in Europe. applicable to IPOs and bond offerings across the region and has been prepared in cooperation with Going public or issuing a public bond is never a experienced professionals recognised as key capital straightforward decision or easy process for first-time markets practitioners in each jurisdiction. Our inten- issuers. Regardless of the chosen listing venue, full tion is to provide a user-friendly summary of the main preparation, and an expected timeline, it is a long jour- listing requirements and IPO/bond process, described ney – but one which will hopefully pay off at the end. in practical terms and presented in a consistent manner We hope that this guide will address some of the most across all countries. In addition, the guide highlights important considerations, help issuers and offerors ongoing reporting and compliance requirements as avoid the unexpected, and make the road less bumpy. well as corporate governance rules applicable to public companies. The Editors: Letters to the Editors: CEE David Stuckey If you like what you read in these pages (or even if you don’t) [email protected] we really do want to hear from you. Please send any com- Radu Cotarcea ments, criticisms, questions, or ideas to us at: [email protected] [email protected] WWW.CEELEGALMATTERS.COM 3 CEELM COMPARATIVE LEGAL GUIDE CAPITAL MARKETS 2020 TABLE OF CONTENTS 3 Foreword 6 Austria 12 Bosnia & Herzegovina 23 Bulgaria 31 Croatia 40 Czech Republic 49 Estonia 54 Hungary 61 Lithuania 65 Moldova 71 Montenegro 86 North Macedonia 90 Poland 101 Romania 109 Russia 116 Serbia 126 Slovakia 130 Slovenia 141 Turkey 153 Ukraine 160 United Kingdom 4 WWW.CEELEGALMATTERS.COM CEELM COMPARATIVE LEGAL GUIDE CAPITAL MARKETS 2020 CHAPTER CONTENTS 1. Market Overview 1.1. Biggest ECM and DCM transactions over the past 2-3 years 2. Overview of the local stock exchange and listing segments (markets) 2.1. Regulated market 2.2. Non-regulated market 3. Key Listing Requirements 3.1. ECM 3.2. DCM 4. Prospectus Disclosure 4.1. Regulatory regimes (Prospectus Regulation or similar) – equity and debt 4.2. Local market practice 4.3. Language of the prospectus for local and international offerings 5. Prospectus Approval Process 5.1. Competent Regulator 5.2. Timelime, number of draft submissions, review and approval process 6. Listing Process 6.1. Timeline, process with the stock exchange 7. Corporate Governance 7.1. Corporate governance code / rules (INED, board and supervisory composition, committees) 7.2. Any other ESG considerations 8. Documentation and Other Process Matters 8.1. Over-allotment (greenshoe or brownshoe structure) 8.2. Stock lending agreement – whether it is used and whether there are any issues (tax, takeover directive) 8.3. Stabilisation – whether allowed and on what terms (MAR, local regimes) 9. Ongoing Reporting Obligations (Life as a Public Company) 9.1. Annual and interim financials 9.2. Ad hoc disclosures WWW.CEELEGALMATTERS.COM 5 CAPITAL MARKETS 2020 AUSTRIA AUSTRIA By Christoph Moser, Partner, and Angelika Fischer, Associate, Weber & Co. 1. Market Overview framework for the admission of securities to a regulated mar- ket in Austria as well as for ongoing obligations of issuers of 1.1. Biggest ECM and DCM transactions over the past listed equity and debt instruments. 2-3 years 2.2. Non-regulated market On the DCM side, in the past 2 to 3 years, the biggest DCM transactions consisted of two multi-tranche bond issuances by The Vienna Stock Exchange also operates the Vienna MTF OMV AG, an integrated oil, gas and polymer company, with (formerly the Third Market (Dritter Markt)), which is not EUR 1 bn multi-tranche corporate bonds issued in each of a regulated market within the meaning of MiFID II but a 2018 and 2019, as well as a EUR 1.75 billion multi-tranche cor- multilateral trading facility. Securities are usually admitted to porate bond issued in April 2020. Further, several other issuers trading on the Vienna MTF if securities need to be listed but issued benchmark size or sub-benchmark size corporate bonds the extensive governance and disclosure framework applicable in 2019 and 2020, including, inter alia, CA Immobilien Anla- to the Official Market should be avoided. The Vienna MTF is gen Aktiengesellschaft, voestalpine AG, IMMOFINANZ AG. governed by the Rules for the Operation of the Vienna MTF of the VSE. Some of the provisions and requirements set On the ECM side, in 2020, Swiss-listed but Austrian-based forth in the Stock Exchange Act 2018 do not apply to finan- ams AG competed a substantial capital increase in an amount cial instruments traded on the Vienna MTF. However, the key of EUR 1.65 billion, which served for the purpose of partially provisions of the Regulation (EU) 596/2014 (Market Abuse financing the acquisition of German OSRAM. In view of the Regulation (MAR)) (dissemination of inside information, di- Covid-19 pandemic, 62% of shares were placed among inves- rectors’ dealing reports and maintaining insider lists) apply also tors, whereas 38% were subscribed by the joint bookrunners. for issuers having securities admitted to trading on the Vienna The transaction was the first notable ECM issue in Vienna in MTF. 2020. In 2019, three initial public offerings (IPOs) took place in Vienna, with Marionomed Biotech AG opening the field 3. Key Listing Requirements for other issuers in February, followed by Frequentis AG and Addiko Bank AG in July 2019. 3.1. ECM 2. Overview of the local stock exchange and Official Market: listing segments (markets) Any admission to the Official Market requires the publication of an approved prospectus (see below). 2.1. Regulated market For a listing on the Official Market (i.e. a regulated market The Official Market (Amtlicher Handel) of the Vienna Stock pursuant to MiFID II) in the standard market segment the Exchange (Wiener Börse) is the only regulated market in Aus- minimum period of existence is three years (exceptions apply) tria in accordance with the Markets in Financial Instruments and a minimum nominal share capital of EUR 1 million is re- Directive (Directive 2014/65/EU (MiFID II). The Stock quired. The free float needs to meet 25% of the total nominal Exchange Act 2018 (Börsegesetz 2018) constitutes the primary 6 WWW.CEELEGALMATTERS.COM CAPITAL MARKETS 2020 AUSTRIA value (par value shares) or the Vienna Stock Exchange. 25% of the number of shares (par value shares) or 10% held 3.2. DCM by at least 50 different share- Also in relation to DCM listings, it has to be distinguished holders. From an accounting between a listing on the Official Market and an inclusion to perspective, IFRS or interna- trading on the Vienna MTF. tionally-recognized accounting standards for groups or also The admission of bonds to listing must be applied for by the national standards for single issuer for the admission segment regulated by law (Official entities must apply. Market) along with a stock exchange member of the Vienna Christoph Moser Stock Exchange (i.e., a credit institution being a member of If issuers target the so-called the stock exchange). The minimum issue size for the Official “prime market” segment of Market is EUR 250,000; there is no such requirement for the the Vienna Stock Exchange, Vienna MTF. Bonds are included in trading in the Vienna some further requirements on MTF upon the request of a credit institution, an investment top of those for the stand- firm, a law firm or the issuer itself. ard market segment apply: a specialist and further market When an issuance program is admitted to the Vienna Stock makers need to be appointed, Exchange, no separate admission procedures are required for the capitalization of the free each of the individual bonds. Trading in the bonds may start float needs to exceed certain as quickly as two days after the Vienna Stock Exchange has re- thresholds (a minimum of ceived the bond terms of the bonds issued under the program.
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