Ashurst Quarterly Debt Capital Markets Update Q3 2025

Welcome to the latest edition of the Ashurst Quarterly Debt Capital Markets Update for 2025. In this edition we summarise the key developments in debt capital markets in the third quarter of 2025.

We have a number of different developments to report on in this edition:

• ESMA thematic notes on sustainability claims
• Jurisdiction and arbitration clauses revisited
• New UK prospectus rules published
• EU Prospectus Regulation – Amendments proposed to incorporation by reference
• UK Taxonomy Regulation revoked

ESMA thematic notes on sustainability claims

On 1 July 2025, ESMA published the first of what it proposes will be a series of a thematic notes (ESMA36-429234738-154) to assist issuers and other market participants when making sustainability claims to ensure that they are clear, fair and not misleading.  This first note sets out four principles which ESMA wants market participants to acquaint themselves with to avoid the risks of making misleading claims and gives a number of examples of poor practices, such as cherry-picking, exaggeration, omission, vagueness, inconsistency, lack of meaningful comparisons or thresholds, etc.

These principles and the related guidance included in these notes apply to what are described as non-regulatory communications. For these purposes the note describes regulatory information as that required by specific disclosure standards, such as bond prospectuses, management reports, KIDs and benchmark statements, while non-regulatory information covers all other types of communications such as marketing materials and voluntary reporting.

The four principles do not create new disclosure requirements but aim to remind market participants about their responsibility to make claims only to the extent that they are clear, fair and not misleading.

Jurisdiction and arbitration clauses revisited

There has been much discussion amongst market participants in recent weeks of jurisdiction and arbitration clauses in view of (amongst other things):

• the decision of the Court of Justice of the European Union (CJEU) on asymmetric jurisdiction clauses in the case of Società Italiana Lastre SpA (SIL) v Agora SARL (Case C 537/23 ECLI:EU:C:2025:120);

• the UK acceding to the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters on 1 July 2025; and

• the Arbitration Act 2025 which, with effect from 1 August 2025, has introduced a number of significant amendments to the Arbitration Act 1996, the legislative framework which governs arbitral proceedings with their seat in England (see this Ashurst briefing).

In view of these developments, market participants may want to review closely the jurisdiction and arbitration clauses appearing in customary documentation to ensure that they continue to achieve their policy goals.

New UK prospectus rules published

On 15 July 2025, the FCA published a policy statement (PS25/9) on the final rules it has made to implement the Public Offers and Admissions to Trading Regulations 2024 (the POATRs). This follows on from the consultation papers CP24/12 and CP25/2 published in July 2024 and January 2025, respectively. By and large the FCA received positive feedback on its consultations and has accordingly carried most of its proposals through into the new rules, although there are some important changes in the final rules. The new rules will come into force on 19 January 2026 and, together with the POATRs, will effectively replace the current UK Prospectus Regulation regime. 

In this Ashurst briefing, we highlight the principal changes that the new rules will make to the format and contents of prospectuses and the circumstances in which they are used for issues of non-equity securities.

EU Prospectus Regulation – Amendments proposed to incorporation by reference)

On 15 July 2025 ESMA published a report (ESMA32-117195963-1442) which proposes regulatory technical standards (RTS) which will reverse a significant change made in December 2024 to the EU Prospectus Regulation by the Listing Act package.  This package made a number of changes to the information specified in Article 19 of the EU Prospectus Regulation which may be incorporated by reference into a prospectus.  One of these change was an over-zealous piece of legislative housekeeping which sought to remove redundant references to the Prospectus Directive.  This included amending Article 19(1)(a) to remove documents which have been approved by a competent authority in accordance with the Prospectus Directive.

For the purposes of fungible issues under a base prospectus it has been common practice to incorporate by reference into base prospectuses terms and conditions from previous years' base prospectuses, including in many cases those approved under the Prospectus Directive.  This Listing Act amendment removed this possibility and this has now been recognised by ESMA as an unintentional change which needs rectifying.

In the RTS proposed by ESMA in the above report, ESMA also proposes amending the EU Prospectus Regulation to allow pre-issuance disclosures referred to in Article 20 of the EU Green Bond Regulation to be added to the list of documents in Article 19 of the EU Prospectus Regulation from which information can be incorporated by reference into a prospectus.

The EU Taxonomy Regulation tasks the Commission with defining technical screening criteria for six specified environmental objectives through delegated acts, fleshing out in detail what it means for an economic activity to substantially contribute to an environmental objective and "do no significant harm" to the other objectives.  The taxonomy cannot apply in practice until the technical screening criteria for the relevant objectives have been adopted.  

The UK's retained EU law version of this Regulation (the UK Taxonomy Regulation) assigns HM Treasury the same tasks.  However, a series of delays and concerns about interoperability and taxonomy implementation in other jurisdictions has led the government to decide not to proceed with a UK green taxonomy.

Consequently, on 15 July 2025, UK Taxonomy Regulation was revoked by Regulation 2 of the Financial Services and Markets Act 2023 (Commencement No 10 and Saving Provisions) Regulations 2025 (SI 2025/873), using powers under the Financial Services and Markets Act 2023.  It remains to be seen what if anything will take its place.  For more information, see UK Green Taxonomy - Consultation Response, published by HM Treasury on 4 July 2025.