EU adopts code of conduct for issuer-sponsored research to revive SME coverage

The European Commission has adopted Commission Delegated Regulation (EU) 2026/1092, published in the Official Journal of the European Union (L series) on 4 September 2026, which establishes a harmonised EU code of conduct for issuer-sponsored research. The regulation, signed by Commission President Ursula von der Leyen in Brussels on 21 May 2026, supplements Directive 2014/65/EU (MiFID II) and enters into force on the third day following its publication.

The new framework responds to a structural gap in European capital markets: the decline in independent research coverage of smaller listed companies. By creating a single, reliable label for research paid for by the issuing company, the Commission and the European Securities and Markets Authority (ESMA) aim to restore trust in such analysis and, in turn, revitalise coverage of small and medium-sized enterprises (SMEs) while safeguarding investor interests.

A harmonised definition and a single label

The regulation introduces a common definition of “issuer-sponsored research” as investment research paid for, in full or in part, by an issuer and produced in compliance with the EU code of conduct. The label is reserved exclusively for research that meets the code’s requirements, and it explicitly excludes trading commentary and bespoke trade advisory services that do not constitute an investment recommendation under Regulation (EU) No 596/2014 (the Market Abuse Regulation).

Investment firms may only use or distribute research labelled as issuer-sponsored research when they can assess its compliance with the code. Where information is insufficient, firms must not pass the research on to clients. To simplify the process, firms may rely on the opinion of an independent third party, including an external auditor, or on the regulated status of a provider that is itself an authorised investment firm.

Conflicts of interest and independence

The code, set out in the regulation’s Annex, obliges research providers to maintain an effective conflicts-of-interest policy, keep an up-to-date register of identified conflicts, and review that policy at least annually. Providers must also ensure the sponsored nature of the research does not undermine its independence and objectivity, applying the same organisational arrangements used for non-sponsored research.

• Research analysts must not trade in the financial instruments covered by the research before recipients have had a reasonable opportunity to act on it.
• A physical separation must exist between analysts and staff whose business interests may conflict, unless alternative barriers are proportionate.
• Providers may not promise favourable research, and issuers may not review drafts containing a recommendation or target price before dissemination.
• Analysts may not be involved in commercial solicitation or contract negotiations with the issuer.

Contract terms, transparency and dissemination

The code sets minimum contract standards: the initial term between issuer and provider must last at least two years, with renewals of at least one year. Early termination is allowed only on objective grounds, such as delisting or repeated non-payment, and the issuer may not terminate because it is dissatisfied with the content of the research. The issuer must pay at least 50% of the annual remuneration shortly after signature and on each contract anniversary.

Research paid for in full by the issuer must be made accessible to the public free of charge, while partially paid research may be reserved for the investors who contributed to its cost. Providers must prominently label the research, disclose whether the issuer paid in full or in part, and indicate when revenue from the issuer exceeds 5% of the provider’s consolidated gross revenues. Records must be retained for a minimum of five years, and the research must comply with the investment-recommendation requirements of the Market Abuse Regulation and Delegated Regulation (EU) 2016/958.

The regulation is based on draft regulatory technical standards submitted by ESMA, which drew on the French code of conduct for issuer-sponsored research, identified as the only widely endorsed national code. For investors, the new framework means a clearer, more trustworthy signal of research quality; for SMEs, it offers a credible route back into the analyst coverage that is essential to their access to capital markets.

Source: Official Journal of the European Union, L series, 4 September 2026, L 2026/1092 (official reference: CELEX L_202601092).