On 22 October 2025, the European Securities and Markets Authority (ESMA) published a final report containing draft regulatory technical standards (RTS) for the establishment of an EU code of conduct for issuer-sponsored research.

Background

In order to revitalise the market for investment research, several amendments are made to the Markets in Financial Instruments Directive II by the Listing Act Directive. One of the measures introduced by the Listing Act Directive concerns issuer-sponsored research, with the provision of an EU code of conduct for such research, which should enhance the trust in, and use of, issuer-sponsored research.

On 18 December 2024, ESMA issued a consultation paper setting out proposed RTS establishing an EU code of conduct for issuer-sponsored research by the EU Listing Act Directive. The deadline for comments on the consultation paper was 18 March 2025.

In its proposals ESMA indicated that:

  • Issuers and research providers should only enter into an agreement where the minimal initial term of the contract is two years and where, at minimum, 50% of the annual remuneration is paid upfront.
  • Research providers should establish, implement and maintain an effective conflicts of interests’ policy.
  • Research that is fully paid for by the issuer should be made public immediately.

Final report

The final report summarises and analyses the responses to the consultation paper and explains how they have been taken into account.

Among other things, ESMA has maintained the requirements of a minimum initial contract term of two years and a minimum upfront payment of 50% of the annual remuneration. While ESMA recognises that these provisions may have an impact on issuers, it considers this impact to be limited and proportionate to the objectives pursued. The 50% upfront payment does not constitute an additional cost, as it covers amounts that would be payable later in any case. Although it may pose challenges for issuers with limited cash flow, it serves the important purpose of supporting the independence and objectivity of the research provider. Similarly, the two-year minimum contract term may be perceived as a cost, but it is justified by the goal of ensuring more consistent and continuous research coverage – particularly for SMEs – which is essential for fostering investor trust and reliance in issuer-sponsored research.

Next steps

The final draft RTS have been submitted to the European Commission for adoption. The Commission shall decide whether to adopt the final draft RTS within three months.