Capital Markets Union: European Council confirms final agreement on easier access to financial markets for SMEs

As part of the capital markets union, the EU will soon have in place a new framework to help small and medium businesses (SMEs) access new sources of funding.

EU ambassadors today, March 20, confirmed an agreement reached between the Romanian presidency and the European Parliament on 6 March, aimed at providing cheaper and easier access to public markets for SMEs. The initiative concerns specifically access to “SME growth markets”, a recently introduced category of trading venue dedicated to small issuers.

Only 3,000 SMEs on stock-exchanges

Of the 20 million SMEs in Europe, only 3,000 are currently listed on stock-exchanges. This is partially due to high compliance costs on the one hand and insufficient liquidity on the other. The proposed rules therefore aim at reducing the administrative burden and cut red-tape faced by smaller companies.

The proposal contains amendments to the market abuse and the prospectus regulations which make the obligations placed on SME growth market issuers more proportionate while preserving market integrity and investor protection.

The new rules adapt and reduce reporting obligations, in particular as regards persons that have access to price-sensitive information(“insiders’ lists”). They also extended the possibility to use a lighter “prospectus” more suited to SMEs that have already been listed on an SME growth market.

The Parliament will vote on the agreement during the April plenary. The text will then undergo a legal linguistic revision. Parliament and Council will be called on to adopt the proposed regulation at first reading.

Click here to access the text of the political agreement on SME growth markets as endorsed by Coreper