Direct Listing and investor protection: a U.S. and E.U. perspective on underwriter liability.

Prompted by ongoing debates on how to strengthen primary markets in the U.S. and the E.U., the purpose of this dissertation is to examine the regulatory framework, benefits, and policy issues associated with non-underwritten offerings, commonly referred to as “direct listings”. To that end, this work addresses two main research questions. First, the compatibility of direct listings with the existing U.S. and E.U. legal frameworks is assessed, drawing from academic literature, as well as empirical evidence and recent market developments. Second, the question of the adequacy of investor protection in the absence of underwriter involvement is analysed. From a U.S. perspective, the first part of the analysis addresses the leading case of Spotify’s listing and the recent Supreme Court ruling in the Slack v. Pirani case, highlighting the key features and policy questions relevant to U.S. direct listings. From a E.U. perspective, the dissertation provides an overview of the regulatory framework and transactional patterns akin to direct listings, which signal their compatibility with E.U. regulation, with a particular focus on Italian direct distributions. Turning to investor protection, the dissertation addresses the legal and policy considerations which are relevant to determining whether an extension of the scope of liability to non-underwriting advisors involved in direct listings is warranted. To that end, the analysis focuses on the SEC’s guidance on similar questions raised by SPACs in the U.S., as well as on E.U. law and regulations applicable to the provision of investment services, to assess the level of investor protection available vis-à-vis intermediaries in the absence of traditional underwriter liability claims. Leveraging a comparative approach, this dissertation aims to provide an overview of the main legal and policy arguments relevant to direct listings and to enable an assessment of their impact on investor protection, highlighting potential areas of intervention should a need for stronger safeguards be found.