Final Report on Draft Regulatory Technical Standards for EU Code of Conduct for Issuer-Sponsored Research

22 October 2025 ESMA35-335435667-6537 Final Report Draft regulatory technical standards for the establishment of an EU code of conduct for issuer-sponsored research

1 Table of Contents 1 Executive Summary ....................................................................................................2 2 Background.................................................................................................................3 3 Feedback Statement ...................................................................................................5 4 Annexes ....................................................................................................................14 4.1 Annex I - Cost-benefit analysis...........................................................................14 4.2 Annex II - Advice of the Securities and Markets Stakeholder Group (SMSG) .....18 4.3 Annex III - Draft RTS pursuant to Article 24(3c) of MiFID II ................................19

2 1 Executive Summary Reasons for publication The European Securities and Markets Authority (“ESMA”) has been required to develop regulatory technical standards (RTS) establishing a EU code of conduct for issuer￾sponsored research by the Listing Act Directive1 . On 18 December 2024, ESMA published a Consultation Paper to seek stakeholders’ views on ESMA’s proposals for this RTS. The consultation period closed on 18 March 2025. ESMA received a total of 30 responses, 4 of which are confidential, and advice from the Securities and Markets Stakeholder Group. Contents Section 2 sets out the background. Section 3 contains the feedback statement relating to the draft technical standards on the EU code of conduct for issuer-sponsored research. Section 4 consists of three Annexes. Annex I contains the cost-benefit analysis undertaken in relation to the draft RTS. Annex II contains the advice of the Securities and Markets Stakeholder Group. Annex III contains the draft RTS. Next Steps The draft RTS are submitted to the European Commission for adoption. In accordance with Article 10 of Regulation (EU) 1095/2010, the European Commission shall decide whether to adopt the draft RTS within three months. 1 Directive (EU) 2024/2811 of the European Parliament and of the Council of 23 October 2024 amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium￾sized enterprises

3 2 Background Legal background

1. Currently, no specific regime for issuer-sponsored research exists.
2. On 14 November 2024 the Listing Act Directive was published in the Official Journal and entered into force on 4 December 2024.2
3. In order to revitalise the market for investment research, several amendments are made to MiFID II3 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.
4. The Listing Act Directive introduces new paragraphs in Article 24 of MiFID II, dealing with “General principles and information to clients”4 .
5. In line with the new provisions, issuer-sponsored research must be fair, clear and not misleading. It should be clearly identified as such or with similar wording. All relevant conditions outlined in the MiFID II Delegated Regulation5 and applicable to the research shall be met. Lastly, investment firms that produce or distribute research partly or fully paid by the issuer shall use the label "issuer-sponsored research" only if the research complies with the EU code of conduct for issuer-sponsored research, to be developed by ESMA as RTS.
6. These draft RTS attached in Annex III hereto should be submitted by ESMA to the European Commission by 5 December 2025. Public consultation
7. On 18 December 2024, ESMA published a Consultation Paper (CP)6 on the draft RTS to explain the rationale of its proposals and gather input from stakeholders. The consultation period closed on 18 March 2025. 2 OJ L, 2024/2811, 14.11.2024 3 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU 4 New paragraphs 3a to 3e of Article 24 of MiFID II, as added by Article 1(2)(a) of the Listing Act Directive 5 Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive. 6 With Ref: ESMA35-335435667-5921

4 8. ESMA received a total of 30 responses, 4 of which are confidential. The answers received are available on ESMA’s website unless respondents requested otherwise. ESMA also sought the advice of the Securities and Markets Stakeholder Group’s (SMSG). The SMSG advice is included in Annex II. Final report 9. This Final Report summarises and analyses the responses to the CP and explains how the responses, together with the SMSG advice, have been taken into account. ESMA recommends reading this report together with the CP to have a complete view of the rationale for the draft RTS.

5 3 Feedback Statement Question 1: Are you aware of or adhering to another code of conduct for issuer-sponsored research that ESMA could take into account? If so, which specific parts of the code of conduct would be of added value to consider for the EU code of conduct? Please state the reasons for your answer. 10. The respondents did not share a code of conduct, other than the one identified by ESMA (“Existing code of conduct”), specifically dealing with issuer-sponsored research. However, some respondents did share that they or their members adhere to standards or principles applicable to all types of research, including for issuer-sponsored research. 11. One respondent, a national industry association, pointed out that as part of its ‘Industry Standards’, it has a specific provision on issuer-sponsored research. This provision deals with the structure of payments and sets out that the content requirements are the same as for non-sponsored research, with the difference that issuer-sponsored research shall not contain a recommendation (such as buy, hold, or sell), or target price. ESMA notes that the EU code of conduct primarily focusses on procedures and measures that deal with the circumstances in which the research is produced, it does not set out restrictions on the content of the research, such as the inclusion of recommendations and price targets. Question 2: Do you agree with the proposed approach? Please state the reasons for your answer. 12. Most respondents, including the SMSG, expressed support for the approach outlined by ESMA in the Consultation Paper, specifically Option 3, which proposes using the Existing code of conduct as the starting point for the EU code of conduct while introducing targeted amendments. This option was generally viewed as a balanced and pragmatic step forward. 13. However, some of these respondents nonetheless qualified their positive response, in various ways which sometimes proved to be contradictory. For instance, one respondent regretted that the EU code of conduct leaves too much room for regulatory arbitrage as it is not mandatory and that this would potentially undermine its effectiveness. A couple other respondents stressed that the EU code of conduct should not be less stringent than the Existing code of conduct, as this could lead to a lowering of standards. Finally, there were calls to avoid introducing overly prescriptive requirements, with several respondents advocating for adjustments tailored to the specific needs of small and medium-sized enterprises (SMEs), to ensure the framework remains proportionate and supportive of market diversity. 14. Regarding the possibility of regulatory arbitrage, ESMA acknowledges that the non-binding nature of the EU code of conduct leaves the possibility for issuers and research providers

6 not to adhere to the EU code of conduct. However, ESMA notes that – in such case – investment firms would not be able to distribute the analysis produced under the label “issuer-sponsored research” but would have to label it as a marketing communication, which would potentially negatively affect investor’s attitude towards the material. 15. In relation to the concerns expressed by some respondents that the EU code of conduct was lowering the requirements of the Existing code of conduct, ESMA indeed did not replicate in the EU code of conduct a number of obligations that were included in the Existing code of conduct applicable to issuers, so as to make sure that issuers face the least possible obstacles to have their company covered. Since issuers making use of issuer-sponsored research are – for the vast majority – SMEs, ESMA considers that the EU code of conduct already addresses calls to introduce SME-specific adjustments. 16. While many respondents were thus supportive of ESMA’s proposed approach, a minority expressed disagreement. A couple of respondents indicated a preference for Option 2, as they are already compliant with the Existing code of conduct. However, they acknowledged that some revisions to the current code may still be required. 17. As already noted above, given the objective of the level 1 text to revitalise the research market for SMEs, ESMA chose to lower the requirements applicable to issuers, to facilitate the task for issuers intending to use issuer-sponsored research to have their company covered. 18. A few respondents argued that additional regulation—whether in the form of a code of conduct or otherwise—is unnecessary, pointing out that issuer-sponsored research is already sufficiently covered by existing regulatory frameworks. A couple respondents additionally voiced scepticism about the ability of a new EU code of conduct to genuinely revitalise the research market for SMEs and raised concerns about potential interference with the principle of freedom of contract. 19. Another respondent pointed out that mid-cap issuers have historically been critical of the Existing code of conduct, suggesting that it operates on a presumption of bad faith by issuers. This respondent called for a reduction in regulatory burdens placed on mid-cap companies. Additionally, one respondent advocated for a more stringent code of conduct that would not only regulate processes but also address the substantive content of issuer￾sponsored research. 20. While ESMA recognises that issuer-sponsored research produced by investment firms is already subject to MiFID II rules, it notes that research prepared by other types of research providers is not similarly regulated. The aim of the EU Code of Conduct is to establish a label that assures all analysis designated as "issuer-sponsored research" has been developed in accordance with a defined set of rules - particularly regarding the

7 management of conflicts of interest. The EU code of conduct is intended to enhance trust in issuer-sponsored research and to promote its production by issuers and its use by prospective investors. The EU code of conduct therefore intends to strike a healthy balance between regulation and removing obstacles for issuers. 21. Finally, one respondent called for ESMA to explore ways to ensure that all providers of investment research, irrespective of their regulatory status, adhere to the principles of the Code of Conduct. On this point, ESMA notes that the scope of the EU code of conduct is established by the Level 1 text and ESMA therefore cannot extend it. Question 3: Do you agree to mainly focus the requirements on research providers? Or do you think that additional requirements are necessary for issuers? Please state the reasons for your answer. 22. The vast majority of respondents expressed agreement, with several highlighting that imposing additional burdens on issuers - particularly SMEs - could reduce the attractiveness and uptake of issuer-sponsored research. 23. One respondent, however, called for ESMA to clarify whether the EU code of conduct applies to independent research providers. In this regard, ESMA notes that independent research providers are not required to comply with the EU code of conduct. However, if an investment firm intends to distribute their analysis as "issuer-sponsored research," such compliance becomes necessary. Therefore, if an independent research provider wishes to label research fully or partially paid for by the issuer as "issuer-sponsored research" and have it distributed by an investment firm, they must adhere to the EU code of conduct. Similarly, the EU code of conduct is not mandatory for investment firms producing issuer￾sponsored research; however, non-compliance would mean they cannot distribute such research under the "issuer-sponsored" label but should label it as a marketing communication instead. 24. As a result, all research providers - whether independent or not - must comply with the EU code of conduct if they wish their analysis to be labelled and distributed as "issuer￾sponsored research" by investment firms. ESMA reminds stakeholders that this requirement stems from Level 1 legislation. As such, ESMA does not have the authority to broaden the scope of application or make compliance with the EU code of conduct mandatory. 25. Some respondents expressed disagreement with this approach, voicing concern that the current focus is primarily on research providers. One respondent argued that issuers themselves should also be subject to certain obligations if they intend to benefit from the "issuer-sponsored research" label. They cited the minimum contract duration of two years, a minimum renewal period of 12 months, and upfront payment. Another respondent

8 supported this view, suggesting such obligations would ultimately serve the issuers' interests by promoting more consistent research coverage - particularly for SMEs - and reducing the risk of undue financial influence on research providers. 26. On this basis, ESMA decided to maintain the approach chosen and thus focus mainly the requirements of the EU code of conduct on research providers. As detailed below, some requirements of the EU code of conduct (for instance, the initial minimum term of the contract or the minimum upfront payment) however impact issuers but to a limited extent and, in ESMA’s view, are justified by the goal pursued and expected benefits. Question 4: Do you agree with a minimum initial term of the contract of two years? Or should the initial term be more, or less? Or should the code of conduct allow one-off reports, such as for initial public offerings? Please state the reasons for your answer. 27. The responses to this question were relatively balanced. A slight majority of respondents (11) supported the proposal for a minimum initial contract term of two years. Several noted that such a requirement would help reduce pressure on research providers and contribute to sustained research coverage, particularly for SMEs. This, in turn, was seen as beneficial not only to issuers but also to investors, by ensuring consistent and reliable analysis over a reasonable period. 28. A similar number of respondents (10) expressed qualified agreement or partial disagreement, suggesting that exceptions to the two-year minimum should be permitted. However, views diverged on what those exceptions should entail. Many respondents supported allowing one-off reports in the context of IPOs, while endorsing the two-year minimum for issuers seeking ongoing coverage. Others advocated for termination clauses in cases of poor performance by the research provider. On this point, ESMA notes that Clause 4(2) of the EU code of conduct already allows for early termination based on objective criteria. However, ESMA considers that the perceived poor quality of the research should not constitute an objective reason for termination, as this is rather subjective and could reflect dissatisfaction with the research outcomes rather than its methodological integrity. By contrast, failure to deliver reports or systematic delays could be considered objective grounds for termination. Such examples have been added to Clause 4(2) of the EU code of conduct. 29. Finally, a notable minority of respondents (9) opposed the two-year minimum outright, whether or not exceptions were allowed. Some argued for complete contractual freedom, opposing any mandatory minimum term. Others favoured a more flexible approach, such as a shorter minimum duration of one year, with the possibility of renewal—including tacit renewal—if both parties agree.

9 30. First, ESMA would like to remind stakeholders that the EU code of conduct is not mandatory. Its provisions only apply in the specific circumstances outlined above—namely, when research is labelled as “issuer-sponsored” and distributed by investment firms to their clients. ESMA considers that, when used, the “issuer-sponsored research” label should serve as a hallmark of quality. This would help foster greater investor trust and, in turn, encourage broader reliance on issuer-sponsored research. For these reasons, ESMA is of the view that a minimum initial term of two years is beneficial and should therefore be met for the research to be labelled as issuer-sponsored research. In addition, although the feedback was split on allowing exemptions for initial public offerings, ESMA did not include an exemption in that sense as it could create a substantial loophole and risk hampering the expected benefits described in the foregoing. 31. Finally, several respondents used their responses to Q4 to ask ESMA to clarify that pre￾deal investor education should not be considered as issuer-sponsored research because the issuer is not paying for the research and, possibly, only for ancillary costs linked to the distribution of the research produced. ESMA acknowledges that when the issuer does not pay for the research, it is not issuer-sponsored research as referred in Article 24, paragraph 3(b) of MiFID II. However, a case-by-case assessment should be made as to how the cost of producing the research is covered. Question 5: Do you agree with a minimum upfront payment of 50% of the annual remuneration? Or should that percentage be higher or lower? Please state the reasons for your answer. 32. A majority of respondents agreed with the minimum upfront payment of 50% and adhered to the rationale for it as a tool to alleviate pressure on the research providers. Some respondents however wished that the upfront payment be raised to 100%, as a best practice. One respondent instead advocated for a binding payment schedule to be agreed at the signature of the contract. In this respect, ESMA would note that this would still allow pressure to be placed on the research provider regarding any outstanding payments and thus would not make a big difference with no initial upfront payment being made. 33. A notable minority of respondents disagreed with the proposal, many of whom advocated for full contractual freedom. Others recognised the benefits of the proposal but feared that it could act as a deterrent for issuers as SMEs may be facing liquidity problems. A couple however recognised the benefit of having some upfront payment but would see fit to lower the percentage (to, for instance, 30%). 34. As previously noted, ESMA believes that the “issuer-sponsored research” label should serve as a hallmark of quality. A minimum upfront payment of 50% is, in ESMA’s view, the minimum threshold allowing to attain the objectives pursued (limiting the leverage that issuers may have on issuer-sponsored research providers) and ESMA thus did not lower

10 the percentage required for such upfront payment. On the other hand, and despite calls to increase such threshold, ESMA decided to keep this upfront payment at 50% so as to leave room for issuers and research providers contractual freedom and to limit the strain on issuers liquidity resources. Question 6: Do you agree with the information listed in Clause 7 of the code of conduct that research providers should make available to investment firms? Is there anything missing? Please state the reasons for your answer. 35. A majority of respondents disagreed with the proposed information included in Clause 7. Some respondents mentioned that making available the agreement, would entail sharing confidential contract and business information. ESMA notes that it is not intended that research providers share the complete agreement with the issuers, including confidential information, with investment firms. A summary of the key elements of the agreement and the way in which the research provider is remunerated suffices, ESMA has amended Clause 7 accordingly. One respondent mentioned that a summary of the key elements of the agreement and the information on the steps taken to prevent or manage (potential) conflicts of interest could directly be included in the disclaimers accompanying the issuer￾sponsored research. ESMA agrees that research providers can include such information in the issuer-sponsored research itself but notes that when investment firms deem that information insufficient, they can still request additional information to the extent necessary to assess whether the issuer-sponsored research is produced in compliance with the EU code of conduct. 36. Some respondents that disagreed with Clause 7 mentioned that it puts unnecessary burden on research providers. Contrary, some other respondents that agree with the proposed Clause 7 mentioned that they see limited burden from this clause. ESMA is of the view that Clause 7 would require limited effort from research providers, and they could opt to make the information widely or publicly available, for instance as mentioned in the previous paragraph, further limiting the required efforts. 37. Some respondents that disagreed, mentioned that the reference to an independent third party, such as an external auditor should not be included in Article 3 of the RTS. Either because this is already possibly with outsourcing, or because it might become a market practice and that would be too costly. ESMA would like to clarify that the assessment and opinion of an independent third party as referred to would be on the initiative of the research provider, not of the investment firm and is thus only a possibility but not a requirement. The aim is to make it less burdensome for several investment firms to distribute publications of issuer-sponsored research from one research provider, as not each investment firm would have to conduct a full assessment of whether the issuer-sponsored research of the specific research provider is produced in compliance with the code of conduct. Obviously, when an

11 assessment and opinion of an independent third party is available, an investment firm is not required to use it and can rely on its own assessment. 38. One respondent mentioned that investment firms are subject to MiFID II and supervised by national competent authorities. Since their compliance with the EU code of conduct for any issuer-sponsored research they produce is under supervision, making information available to other investment firms that intend to distribute their issuer-sponsored research seems unnecessary. While research providers that are not investment firms are not subject to MiFID, the new requirements introduced by the Listing Act Directive, indeed, require investment firms that produce issuer-sponsored research to comply with the EU code of conduct. However, the Level 1 also requires that investment firms that distribute the issuer￾sponsored research have organisational arrangements in place to ensures that it is produced in compliance with the EU code of conduct, it does not make an exception when the research provider is an investment firm. Consequently, also in these cases investment firms that intend to distribute issuer-sponsored research might require information from research providers, though, to a certain extent they could rely on the regulated status of the research provider. 39. A few respondents that agreed with the proposal, including a consumer association, asked for additional information to be disclosed or mandatory centraliser reporting of contract details and payments, such as through the European Single Access Point. Question 7: Do you agree that only when the issuer paid fully for the research, it should be made accessible to the public immediately? Or should research partially paid for by the issuer also be made accessible to the public immediately? Please state the reasons for your answer. 40. A majority of respondents agree with the proposal, mentioning several arguments such as increased transparency and benefits for the issuer that receives broader attention. A majority of respondents also agree that issuer-sponsored research partially paid for by issuers should not be made publicly available immediately, since this would diminish the appetite for investors to contribute to the payment of the research. However, some respondents, including a consumer association, mentioned that research providers and issuers could or should contractually agree on a timeframe after which partially paid for research would be made available to the public. Some other respondents disagreed with the proposal and stated that all issuer-sponsored research should be made publicly available immediately. Following the responses, ESMA kept the approach as was consulted, thus only requiring that research fully paid for by the issuer should be made publicly accessible immediately. For research partially paid for by the issuer, the issuer and research provider can agree on a timeframe after which it shall be made publicly accessible but this is not required by the code of conduct.

12 41. Some respondents also stated that issuer-sponsored research should always be fully paid for by the issuer and that partially paid for research should be prohibited due to increased conflicts of interest. ESMA notes that the Level 1 text already refers to issuer-sponsored research “paid for, in full or in part, by an issuer”, thus allowing partial payments. Prohibiting such partial payments in the EU code of conduct would therefore not be possible. 42. Some respondents disagree with any required publication, stating that issuer-sponsored research specifically produced for professional clients should not be made public. One respondent noted that this would create a legal liability since the issuer-sponsored research might for instance be misconstrued as investment advice. Question 8: Do you think that any further requirements should be introduced in the code of conduct? Please state the reasons for your answer. 43. Overall, respondents did not propose additional requirements to be included. In contrast, some respondents specifically mentioned that the current safeguards are already sufficient, the EU code of conduct itself is not necessary and thus any additional requirements are also not necessary. 44. One respondent, a consumer association, stated that the drafting of Clause 6 in the EU code of conduct as consulted includes a loophole when the research provider becomes aware that the issuer-sponsored research is not produced in compliance with the EU code of conduct. The drafting requires the research producer to delete the label “issuer sponsored research” but it does not require the research provider to label it as a marketing communication. That a research provider should label such research as marketing communication follows from the new Article 24(3e) of MiFID II. To avoid confusion, ESMA has amended Clause 6 accordingly. 45. One respondent proposed to include an indication whether the issuer-sponsored research is paid for partially or in full by the issuer in the summary required by Clause 3(2). ESMA has included this in Clause 3(2)(a). 46. Few respondents stated that Clause 2(3)(h) should be amended or deleted, since in practice the specific industry knowledge of the research analyst is key in the process of commercial solicitation. ESMA is of the view that a research analyst should not be involved in commercial solicitations with issuers. However, there can be interactions between the research analyst and the issuer to demonstrate the research analyst’s knowledge on the specific industry. This has been clarified in the Clause. 47. Few respondents stated that the list of records to be retained in Clause 8 is too extensive. ESMA would like to note that this requirement merely sets out that certain records which the research provider already possess should be retained. Might at some point in time the

13 question arise whether issuer-sponsored research is produced in compliance with the EU code of conduct, and subsequently a review started, then this information will contribute to the assessment.

14 4 Annexes 4.1 Annex I - Cost-benefit analysis Impact of the draft RTS under Article 24(3c) of MiFID II

1. As per Article 10(1) of Regulation (EU) No 1095/2010, any draft regulatory technical standards developed by ESMA shall be accompanied by an analysis of ‘the potential related costs and benefits’ of the technical standard.
2. The next paragraphs present the cost-benefit analysis of the main policy options included in this final report on the establishment of an EU code of conduct for issuer-sponsored research under Article 24(3c) of MiFID II. Problem identification
3. Paragraphs 3b to 3e of Article 24 of MiFID II lay down rules for issuer-sponsored research. Investment firms must ensure that the research they distribute to clients or potential clients which is paid for, in full or in part, by an issuer shall be labelled as ‘issuer￾sponsored research’ only if it is produced in compliance with the EU code of conduct for issuer-sponsored research. Article 24(3c) of MiFID II requires ESMA to develop draft RTS to establish an EU code of conduct for issuer-sponsored research.
4. The enacting terms of the RTS can only be addressed to entities that are subject to MiFID II. However, research providers, who should produce the issuer-sponsored research in compliance with the EU code of conduct, are not necessarily subject to MiFID II. Therefore, when developing the draft RTS, ESMA had to take this fact into account.
5. In addition, ESMA’s objective was to ensure that the EU code of conduct will contribute to the independence and objectivity of research providers when producing issuer￾sponsored research. Policy objectives
6. The objective of the draft RTS is to enhance investor protection by setting standards of independence and objectivity, and specify procedures and measures for the effective identification, prevention and disclosure of conflicts of interest, whilst also promoting issuer-sponsored research by not imposing deterring requirements.

15 Baseline scenario 7. The baseline scenario is the situation where no EU code of conduct is established by any RTS. Thus, research providers would not be able to label issuer-sponsored research as such since it would be impossible to produce it in compliance with a non-existing code of conduct. Options considered and preferred options Policy issue 1: wider approach 8. ESMA has considered three options for the approach to the development of the EU code of conduct. As described in paragraphs 8 to 11 of Section 3.1 of the Consultation Paper, ESMA opted for Option 3 to take into account and benefit from the experience of the Existing code of conduct (the only code of conduct identified in the EU), in line with the requirement of the Listing Act Directive, and include targeted amendments. This preference for Option 3 was confirmed by the strong support expressed by respondents to the consultation, and ESMA subsequently endorsed this approach in the Final Report. Policy issue 2: requirements for issuers 9. ESMA has considered two options concerning the inclusion of requirements for issuers: Option 2a. Include some requirements for issuers, like in the Existing code of conduct. For instance, a mandatory press release when the research coverage commences or certain requirements when referring to any issuer-sponsored research. Option 2b. Minimize the requirements for issuers. 10. Option 2a would provide some safeguards for investors and would ensure harmonisation in how issuers deal when communicating about issuer-sponsored research. 11. Option 2b on the other hand, would lead to less harmonisation in terms of communication. However, it would not impact the issuer-sponsored research itself since that is produced by the research providers for which multiple requirements are included in the draft RTS. 12. To minimize burden for issuers and make issuer-sponsored research attractive for them, ESMA opted for option 2b. Cost-benefit analysis

16 13. The draft RTS on the establishment of an EU code of conduct on issuer-sponsored research are expected to result in limited costs for investment firms, research providers ad issuers, but also in benefits for investment firms, research providers, investors and issuers. 14. 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. Costs 15. Investment firms are expected to incur limited costs to assess whether issuer-sponsored research is produced in compliance with the EU code of conduct. 16. Research providers are expected to incur limited costs on setting up procedures to comply with the EU code of conduct. 17. For costs incurred by issuers, please refer to the description in paragraph 14 above. Benefits 18. The EU code of conduct is expected to contribute to the quality, independence and objectivity of issuer-sponsored research, to enhance trust in such research, and also to increase availability and demand of such research, which ultimately benefits investors.

17 Table: costs and benefits Stakeholder groups affected Costs Benefits Investment firms Limited ongoing costs to ensure issuer-sponsored research is produced in compliance with the EU code of conduct Ensuring that the issuer-sponsored research they use is of adequate quality. Greater availability of issuer-sponsored research Competent authorities Ongoing cost of supervision that firms comply with the RTS Better outcome for investors Investors None Increased quality of and trust in issuer￾sponsored research Research providers Limited ongoing costs to comply with the EU code of conduct Clarity how to produce issuer￾sponsored research independently and objectively. More demand for issuer-sponsored research Issuers Limited impact on cash flows due to 50% upfront payment of the annual remuneration Limited additional cost linked to minimum initial term of the contract of 2 years Increased research coverage

18 4.2 Annex II - Advice of the Securities and Markets Stakeholder Group (SMSG)

1. As provided by Article 16(2) of the ESMA Regulation7 , ESMA sought the advice of the SMSG.8 The advice is included in the box below. The SMSG is supportive of the approach adopted by ESMA in its consultation, that is the development of a code of conduct using an existing code of conduct (i.e. the French example, which is indeed the only one of which we are aware) as a basis and adapting it to cater for the wider EU context where appropriate. Overall, the SMSG did not find any issues or inconsistencies to flag between the draft code of conduct set out in the annex to the consultation and existing MiFID organisational requirements. We also note that not all issuer-sponsored research providers will be subject to MiFID, and therefore to these requirements, and agree with ESMA that it is important that there is a “soft law” basis to which such firms should abide in order for their research to be distributed under the issuer-sponsored research label by investment firms. The SMSG notes the importance of monitoring the development of the EU research market in general, including the evolution of the provision of issuer-sponsored research and the role of the new code of conduct in this context. We encourage ESMA to therefore include such considerations in the comprehensive assessment it is mandated9 to carry out on the evolution of the research market by 31 December 2028. The SMSG also wishes to express its thanks to ESMA staff for the engagement which took place with them during the consultation period and which assisted the group in reaching the above conclusions. Finally, we wish to point to the development of an EU-wide code of conduct for issuer￾sponsored research as a positive example of identifying a beneficial local market practice and promoting its use across the EU within a common and proportionate regulatory framework. We encourage NCAs, ESMA, the Commission and the EU legislators to pursue such efforts in other areas to develop EU capital markets. 7 Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC 8 The full SMSG’s response has been published on the ESMA website (Ref: ESMA24-229244789-5256) 9 Listing Act Directive, Art 1 (2)(b), amending Directive 2014/65/EU; ESMA mandate inserted in Art 24 (9a)

19 4.3 Annex III - Draft RTS pursuant to Article 24(3c) of MiFID II COMMISSION DELEGATED REGULATION (EU) …/… of […] supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the establishment of an EU code of conduct for issuer-sponsored research (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU10, and in particular Article 24(3c) thereof, Whereas: (1) Directive (EU) 2024/2811 of the European Parliament and of the Council of 23 October 2024 amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises and repealing Directive 2001/34/EC11 provides for amendments to Article 24 of Directive 2014/65/EU introducing provisions on the distribution to clients or potential clients of issuer-sponsored research and the establishment of an EU code of conduct for the production of issuer-sponsored research. (2) This Regulation establishes the EU code of conduct for issuer-sponsored research which sets out standards and specifies procedures and measures intended to improve standards of independence and objectivity in the production of issuer-sponsored research. This is to enhance the trust in and the use of issuer-sponsored research. 10 OJ L 173, 12.6.2014, p. 349. 11 OJ L, 2024/2811, 14.11.2024.

20 (3) Investment recommendations are defined in Regulation (EU) No 596/201412 and are subject to specific requirements laid down in the same Regulation and in Commission Delegated Regulation (EU) 2016/958 13 . Issuer-sponsored research falls within the definition of an investment recommendation under Regulation (EU) No 596/2014, and compliance with the relevant requirements applicable to investment recommendations should be ensured. (4) It is important that conflicts of interest do not adversely affect the interests of investors. It is therefore necessary that issuer-sponsored research providers have a conflicts of interest policy that enables them to effectively identify, prevent, manage, and disclose conflicts of interest. (5) To enhance the trust in and the use of issuer-sponsored research and thus help revitalise the research coverage of small- and middle-capitalisation companies, it is essential to ensure that investors trust the independence and objectivity of issuer-sponsored research. To meet this objective, issuer-sponsored research providers shall ensure that the sponsored nature of the research does not affect how the research is produced with adequate organisational measures and arrangements. (6) To enhance trust in issuer-sponsored research, clients and potential clients of investment firms should be able to differentiate between issuer-sponsored research produced in compliance with the EU code of conduct and other issuer-sponsored research material. Therefore, issuer-sponsored research should be clearly identified as such. Other mandatory information, such as information relating to contractual relationships between the issuer and the issuer-sponsored research provider, should also be included so that investors are empowered to make their own assessment of the objectivity and independence underlying the publication. (7) Continuity and consistency in the research coverage of issuers will improve the quality and attractiveness of issuer-sponsored research. It is therefore desirable that research coverage be provided over a longer term. A minimum initial term of two years is appropriate for contracts between issuers and issuer-sponsored research providers, while a minimum term of one year is appropriate for the renewals of those contracts. However, it is appropriate that earlier termination be possible in situations where the research coverage no longer provides added value, such as when the shares of the 12 Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 1). 13 Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest (OJ L 160, 17.6.2016, p. 15).

21 issuer are delisted. Therefore, the agreement should be permitted to include provisions allowing for early termination. (8) It is important that the remuneration agreements do not compromise the objectivity and independence of issuer-sponsored research providers. Therefore, issuers and issuer￾sponsored research providers should be cautious when agreeing on remuneration arrangements that are not fixed. Variable components linked to the content of the research might negatively impact the objectivity and independence of the research provider. To prevent undue pressure on issuer-sponsored research providers, through withholding payments due under the research contract, issuers should pay at least 50% of the annual remuneration at the start of the contract and at each contract anniversary. (9) To improve coverage of small- and middle-capitalisation companies, issuer-sponsored research should be made more visible and thus be available to all investors where it has been fully paid by the issuer. Only where partly paid by the issuer, might issuer￾sponsored research be reserved for investors who contributed to the payment of this research, either indefinitely or for a period contractually agreed between the issuer￾sponsored research provider and the issuer. (10) To further enhance trust in and relevance of issuer-sponsored research, clients or potential clients should be able to be confident that the issuer-sponsored research available is up-to-date and takes into account the latest events that may affect the value of the relevant financial instruments. Therefore, issuer-sponsored-research providers shall, for as long as they are bound by a research coverage agreement, make their best efforts to publish an update of the analysis, as soon as possible, at the time of the publication of any important information, and any (outside) event likely to have a significant impact on the issuer’s financial instruments. (11) Investment firms shall be able to access all necessary information to assess whether research labelled as “issuer-sponsored research” which is to be distributed to clients and potential clients is produced in compliance with the EU code of conduct. Where an investment firm is not able to make the assessment due to lack of information, research labelled as “issuer-sponsored research” should not be distributed to clients or potential clients or that label should be removed. However, where an independent third party, such as an external auditor, on request of the research provider provided an opinion that the issuer-sponsored research is produced in compliance with the EU code of conduct, it is not necessary for investment firms to perform the same assessment themselves. Where the research provider is an investment firm, the research provider is subject to MiFID II and thus should comply with the EU code of conduct following Article 24(3c) of MiFID II and is supervised by the national competent authority. To a certain extent, investment firms that intend to distribute the issuer-sponsored research from such research provider may rely on the regulated status of the research provider, however, investment firms

22 remain responsible for ensuring their obligations under Article 24(3a), 24(3b) and 24(3e) are met, even where the research provider is an investment firm. (12) Record keeping by issuer-sponsored research providers is essential to allow investment firms providing portfolio management or other investment services or ancillary services to ensure that the research they distribute to clients or potential clients which is paid for, in full or in part, by an issuer and that is labelled as ‘issuer-sponsored research’ is produced in compliance with the EU code of conduct. (13) This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Securities and Markets Authority. (14) The European Securities and Markets Authority has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Securities and Markets Stakeholder Group established by Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council14 , HAS ADOPTED THIS REGULATION: Article 1 Definitions For the purposes of this Regulation, the following definitions apply: (1) ‘issuer-sponsored research’ means research paid for, in full or in part, by an issuer and produced in compliance with the EU code of conduct established by this Regulation, as referred to in Article 24(3b) of Directive 2014/65/EU; (2) ‘research’ means research as referred to in the second, third and fourth subparagraphs of Article 24(9a) of Directive 2014/65/EU; (3) ‘research analyst’ means a relevant person who produces the substance of research; (4) ‘research provider’ means an entity that produces issuer-sponsored research. Article 2 EU code of conduct on issuer-sponsored research 14 Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Market Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

23

1. Investment firms shall obtain from research providers all information necessary to assess whether research labelled as “issuer-sponsored research” is produced in compliance with the EU code of conduct as set out in the Annex to this Regulation.
2. Where an investment firm has insufficient information to assess whether research labelled as issuer-sponsored research is produced in compliance with the EU code of conduct, the investment firm shall not distribute the research to clients or potential clients labelled as “issuer-sponsored research”.
3. To assess that issuer-sponsored research is produced in compliance with the EU code of conduct, an investment firm may rely on: a) the assessment and opinion of an independent third party, such as an external auditor; or b) where the research provider is itself an investment firm, the fact that the investment firm is regulated and it shall also comply with this Regulation when producing issuer-sponsored research. The investment firm so relying, however, shall remain responsible for discharging its obligations under Article 24(3a), (3b) and (3e) of Directive 2014/65/EU. Article 3 Entry into force and application This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 6 June 2026. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, [date] For the Commission The President [For the Commission On behalf of the President [Position]

24 ANNEX The EU code of conduct on issuer-sponsored research Clause 1 Policy and measures for the identification, prevention, management, and disclosure of conflicts of interest

1. Issuer-sponsored research providers shall establish, implement, and maintain an effective conflicts of interest policy with respect to issuer-sponsored research. The policy shall define the steps they take to identify, prevent, manage, and disclose conflicts of interest.
2. Issuer-sponsored research providers shall establish and keep up-to-date a register of potential conflicts of interest and conflicts of interest. It shall record all identified potential conflicts of interest and conflicts of interest and any measures taken to prevent or manage them.
3. When an issuer-sponsored research provider is made aware of or identified a potential breach of the conflicts of interest policy, it shall conduct an investigation and inform the issuer without undue delay.
4. Issuer-sponsored research providers shall assess and periodically review, at least on an annual basis, the conflicts of interest policy. Clause 2 Objectivity and independence of the issuer-sponsored research
5. The sponsored nature of the issuer-sponsored research shall not undermine its independence and objectivity.
6. To ensure that issuer-sponsored research is produced with adequate independence and objectivity and that issuer-sponsored research is produced under the same conditions as those applied to research that is not issuer-sponsored, issuer-sponsored research providers shall implement adequate organisational measures and arrangements in relation to the research analysts involved in the production of the issuer-sponsored research and other relevant persons whose responsibilities or business interests may conflict with the interests of the persons to whom the issuer-sponsored research is disseminated.
7. The organisational measures and arrangements referred to in paragraph 2 shall ensure, as a minimum, that: (a) there are no differences in means, qualification and content between issuer-sponsored research and non-sponsored research, including when the issuer-sponsored research provider distributes both types of research under two different brands; (b) research analysts and other relevant persons involved in the production of issuer￾sponsored research do not undertake personal transactions or trade, in financial instruments to which the issuer-sponsored research relates, or in any related financial instruments, with

25 knowledge of the likely timing or content of that issuer-sponsored research which is not yet publicly available or available to the persons to whom it should be disseminated and cannot readily be inferred from information that is so available, until the recipients of the issuer￾sponsored research have had a reasonable opportunity to act on it; (c) in circumstances not covered by point (b), research analysts and any other relevant persons involved in the production of issuer-sponsored research do not undertake personal transactions in financial instruments to which the issuer-sponsored research relates, or in any related financial instruments, contrary to current recommendations, except in exceptional circumstances and with the prior approval of a member of the issuer-sponsored research provider’s legal or compliance function; (d) a physical separation exists between the research analysts involved in the production of the issuer-sponsored research and other relevant persons whose responsibilities or business interests may conflict with the interests of the persons to whom the issuer-sponsored research is disseminated or, when physical separation is considered not appropriate to the size and organisation of the firm as well as the nature, scale and complexity of its business, other appropriate alternative information barriers exist and are implemented; (e) the issuer-sponsored research providers themselves, research analysts, and other relevant persons involved in the production of the issuer-sponsored research do not promise issuers favourable research coverage; (f) before the dissemination of issuer-sponsored research, issuers, relevant persons other than research analysts, and any other persons are not permitted to review a draft of the issuer￾sponsored research for the purpose of verifying the accuracy of factual statements made in that research, or for any purpose other than verifying compliance with the legal obligations of the issuer-sponsored research provider, where the draft includes a recommendation or a target price; (g) the research analyst who produced the issuer-sponsored research is responsible for media relations and the content of social media posts, and ensures that journalists with whom it may come into contact are systematically reminded that a research contract exists with the issuer; (h) research analysts are not involved, directly or indirectly, in commercial solicitation and contract negotiations with issuers other than interactions on the specific industry knowledge of the research analysts or, when such segregation of duties is not appropriate to the size and organisation of the issuer-sponsored research provider as well as the nature, scale and complexity of its business, other appropriate measures are taken. The term ‘related financial instrument’ in this Clause means any financial instrument the price of which is closely affected by price movements in another financial instrument which is the subject of issuer-sponsored research, and includes a derivative on that other financial instrument. 4. Where the issuer-sponsored research provider uses a third party for all or part of the analysis, it shall ensure that the third party complies with the requirements included in this Clause and Clause 1 of this code of conduct.

26 5. The issuer, or any person acting on its behalf, shall not take any direct or indirect action on the issuer-sponsored research provider and its employees or subcontractors that is intended to influence the conducted research. Clause 3 Identification and mandatory information

1. The issuer-sponsored research provider shall ensure that the words ‘issuer-sponsored research’ and a clear indication that the research is prepared in accordance with this code of conduct are prominently displayed on the front page and, if there is a cover page, on both, as relevant, of the analysis and, the words ‘issuer-sponsored research’ on all its pages. In case of electronic communication, the issuer-sponsored research provider will ensure that either of these statements is prominently displayed.
2. Issuer-sponsored research shall also include a concise summary indicating: (a) whether the issuer paid partially or fully for the research, and that the research was carried out in accordance with the provisions of this code of conduct; (b) whether the issuer-sponsored research is ‘public’ and thus accessible to all investors in accordance with Clause 5 of this code of conduct, or ‘reserved indefinitely’ or ‘reserved until dd.mm.yyyy’ and thus accessible only to the investors who contributed to the payment of this research and for how long; (c) a reference to its conflicts of interest policy; (d) whether the issuer represents more than 5% of the issuer-sponsored research provider’s previous year’s consolidated gross revenues and, if that is the case, the relevant percentage, as well as the measures taken to prevent or manage this specific conflict of interest in accordance with Clause 1 of this code of conduct; (e) whether the issuer is a client of the issuer-sponsored research provider or has had any contractual relationship with the issuer-sponsored research provider, including any liquidity agreement, during the past 12 months and of what type; and (f) where the issuer-sponsored research provider uses an outside research analyst, whether the issuer-sponsored research or other issuer-related revenues represent more than 5% of the outside provider’s consolidated gross revenues and, if that is the case, the relevant percentage, as well as the measures taken in accordance with Clause 1 of this code of conduct.
3. The requirements in this Clause shall be without prejudice to any requirement included in Commission Delegated Regulation (EU) No 2016/958.

27 Clause 4 Contract duration and payments for the issuer-sponsored research

1. The initial term of the contract agreed upon between the issuer and issuer-sponsored research provider shall be at least two years. Any following renewal shall be for at least one year.
2. The contract referred to in paragraph 1 of this Clause may include provisions allowing for termination prior to the agreed term if such anticipated termination is based on objective criteria, such as when the shares of the issuer are being delisted, when the issuer repeatedly fails to make the payments or when the research provider fails to deliver the issuer-sponsored research or delivers the issuer-sponsored research but with systematic delays.
3. The issuer and issuer-sponsored research provider shall not agree on a remuneration arrangement that is likely to compromise the objectivity or independence of the issuer￾sponsored research provider. The remuneration shall not contain variable components that are in any way, directly or indirectly, linked to the content of the research.
4. The issuer shall pay at least 50% of the annual remuneration as soon as possible after the signature of the contract and at each contract anniversary. Clause 5 Dissemination of issuer-sponsored research Where issuer-sponsored research is fully paid by the issuer, it shall be made accessible to the public free of charge. In this code of conduct, "research fully paid by the issuer" refers to research that the issuer￾sponsored research provider is contractually not permitted to offer to any other person than the issuer in exchange for payment. Clause 6 Update of the analysis During the contract term, the issuer-sponsored research provider shall make its best efforts to publish an update of the analysis, as soon as possible, at the time of the publication of any important information, and any (outside) event likely to have a significant impact on the issuer’s financial instruments. This shall include the deletion of the words ‘issuer-sponsored research’ from the entire publication and the inclusion of the label ‘marketing communication’ anytime the issuer-

28 sponsored research provider becomes aware that the research does not meet the requirements of this code of conduct. Clause 7 Information sharing with investment firms

1. Issuer-sponsored research providers shall make available to investment firms, when requested, all information necessary to assess whether issuer-sponsored research is produced in compliance with this code of conduct. This information shall include: a) a summary of the agreement between the issuer and issuer-sponsored research provider, including how the research provider ensures that the remuneration arrangements do not impede its objectivity and independence; b) applicable conflicts of interest policies and registers; c) steps taken to prevent or manage conflicts of interest or potential conflicts of interest in accordance with Clause 1 of this code of conduct. Clause 8 Retention of records
2. Issuer-sponsored research providers shall keep at least the following records: a) the agreement between the issuer and issuer-sponsored research provider, including remuneration arrangements; b) payments they made or received; c) each item of issuer-sponsored research published; d) information and sources used to produce the issuer-sponsored research; e) all communications between the issuer and issuer-sponsored research provider by any means, directly or indirectly, linked to the content of the issuer-sponsored research; f) any extract or summary from the issuer-sponsored research they disseminated, including a price target and ‘buy’, ‘sell’ or ‘hold’ recommendation; g) all information on conflicts of interest, as referred to in Clause 1 of this code of conduct.
3. The records mentioned in paragraph 1 shall be retained on a medium that allows the information to be accessible for future reference and the reproduction of the information stored.
4. Issuer-sponsored research providers shall keep the records in accordance with this Clause for a minimum of five years.

29 Clause 9 Application Nothing in this Code of Conduct shall affect any other obligations under applicable Union Law, in particular those imposed by Regulation (EU) No 596/2014.