The European Commission’s Technical Stakeholder Group (TESG) on SMEs published its final report on ‘Empowering EU Capital Markets for SMEs – Making Listing Cool Again’.
EuropeanIssuers welcomes the general approach and focus of the TESG
on SME’s final report which acknowledges the particularly burdensome
regulatory framework and the costs associated with listing for SMEs. As
such, EuropeanIssuers supports the recommendations which are based on
the key principles of simplification, proportionality and flexibility
Mr Luc Vansteenkiste, Chair of EuropeanIssuers, expressed: “I
welcome the recommendations of the TESG on SMEs, especially in light of
the work conducted by the Capital Markets Union High-Level Forum. It is
important that, in order to build a strong Capital Markets Union, the
regulatory framework for SMEs is adapted according to their needs.
Therefore, I very much support the recommendations on alleviations for
SMEs, which focus on simplification and proportionality.”
In particular, following the Capital Markets Union High-Level Forum’s
(CMU HLF) recommendation, EuropeanIssuers supports the TESG’s advice to
revisit the SME definition and to build up on the concept of Small and
Medium Capitalisation Companies (SMCs). Therefore, EuropeanIssuers
welcomes the approach according to which “all publicly listed companies
on any type of market whose market capitalisation is lower than 1
billion euros should be defined as SMCs.” This definition is aligned
with long-standing EuropeanIssuers’ position in the context of the
various ESMA and European Commission’s consultations.
Moreover, EuropeanIssuers welcomes the concrete recommendations on
Prospectus which are in line with the principle of proportionality, such
as having English as the customary language for SMC issuers, and the
simplified prospectus similar to the Recovery Prospectus to be adopted
on a permanent basis. EuropeanIssuers advocated for simplified
prospectus in the context of the COVID-19 pandemic, and considers these
measures fully aligned with the aims of reducing compliance costs for
issuers, and alleviating the administrative burdens on SMEs.
In addition, the recommendations on the simplification of the market
abuse regime, which build up on the CMU HLF’s advice and aim at
clarification and establishment of a proportionate sanction regime, are a
step in the right direction for the creation of a better environment
for SMEs. EuropeanIssuers acknowledges that SMEs encounter various
obstacles as a result of the Market Abuse Regulation requirements, such
as burdensome investigation costs, high costs of remain listed, and high
compliance risk. Therefore, EuropeanIssuers believes that the measures
proposed will facilitate the easier access to the public capital
markets, and supports the recommendations which align also with the
priorities of the CMU Action Plan 2020.
Ms Caroline Weber, Co-Chair of the Smaller Issuers Committee of EuropeanIssuers, commented: “We
observe that, while the final report brings forward measures which
could have an actual impact and positive change for SMEs, the
international context in which the report was adopted must be taken into
account, and support from the Member States should be prioritised. As
such, this should not be a one-time report, but continuous work must be
done in order to alleviate the burdens on SMEs and to create a better
environment for SMEs, as they are the backbone to the EU economy.”
As an observer within the TESG on SMEs, EuropeanIssuers reiterates
its support for the work of the TESG on SMEs and will continue to
contribute to the development of initiatives that work for companies,
investors and the overall EU ecosystem.
To view this press release online, please click here.
Please click here for the Final Report of the Technical Expert Stakeholder Group on SMEs.
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