BETA


2018/0165(COD) Promotion of the use of SME growth markets

Progress: Awaiting signature of act

RoleCommitteeRapporteurShadows
Lead ECON SANDER Anne (icon: PPE PPE) GILL Neena (icon: S&D S&D), SWINBURNE Kay (icon: ECR ECR), TREMOSA I BALCELLS Ramon (icon: ALDE ALDE), LÓPEZ BERMEJO Paloma (icon: GUE/NGL GUE/NGL), LAMBERTS Philippe (icon: Verts/ALE Verts/ALE)
Committee Opinion ENVI
Committee Opinion IMCO
Committee Opinion JURI
Lead committee dossier:
Legal Basis:
TFEU 114

Events

2019/11/08
   EP/CSL - Act adopted by Council after Parliament's 1st reading
2019/11/08
   CSL - Council Meeting
2019/08/08
   Commission response to text adopted in plenary
Documents
2019/04/18
   EP - Results of vote in Parliament
2019/04/18
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 448 votes to 18, with 71 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the promotion of the use of SME growth markets.

The proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation . This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract.

The European Parliament’s position adopted at first reading under the ordinary legislative procedure amended the Commission proposal as follows:

Horizontal Union policy for SMEs

The amended text underlined that a horizontal Union policy for SMEs is therefore essential. Such policy needs to be inclusive, coherent and effective, and must take into account the various subgroups of SMEs and their different needs.

Regulatory alleviation shall be for the benefit of those smaller companies that have growth potential.

The success of an SME growth market should not be measured simply by the number of companies listed, but rather by the rate of growth achieved by the listed companies.

Insider lists

The proposed alleviation relief would allow issuers in SME growth markets to maintain only a list of persons, such as directors, members of management bodies or in-house counsels, who, in the normal course of their duties, have regular access to inside information.

However, since some Member States deem insider lists to be an important element for ensuring a higher level of market integrity, Member States shall be provided with the option to introduce a requirement for the SME Growth Market issuers to provide more extensive insider lists that include all persons who have access to inside information. Nevertheless, taking into account the need to ensure a proportionate administrative burden for SMEs, these lists should contain an alleviated amount of information as compared to full insider lists.

The obligation to establish lists of insiders shall be incumbent on both issuers and persons acting in their name or on their behalf. Issuers and any person acting on their behalf or on their account, shall take all reasonable steps to ensure that any person on the insider list acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information.

A shorter ‘Prospectus’ more suitable for SMEs

The EU Growth Prospectus is short and therefore economical to produce, reducing costs for SMEs. As a result, it is planned to amend Regulation (EU) 2017/1129 of the European Parliament and of the Council shall be amended to allow firms seeking an initial public offer with a tentative market capitalisation of below EUR 200 million to draw up an EU Growth Prospectus.

Impact assessment of the legislation

When reviewing all legislation relating to the financing of listed and unlisted SMEs, the Commission shall analyse regulatory and administrative barriers, including on research, that limit or prevent investment in SMEs. In doing so, the Commission should assess the evolution of capital flows to SMEs and strive to create a favourable regulatory environment to foster the financing of SMEs.

Documents
2019/03/21
   EP - Approval in committee of the text agreed at 1st reading interinstitutional negotiations
2019/03/20
   CSL - Coreper letter confirming interinstitutional agreement
2018/12/07
   EP - Committee report tabled for plenary, 1st reading/single reading
Details

The Committee on Economic and Monetary Affairs adopted the report by Anne SANDER (EPP, FR) on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the promotion of the use of SME growth markets.

The proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation. This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract.

The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal.

Horizontal Union policy for SMEs : the amended text underlined that the diversification of SME lending is a guarantee for the economic health of the EU and stressed the need for additional regulations to ensure that SMEs can be matched up with arrangements such as business angels, seed capital, risk capital, etc.

Parliament clarified that small and medium-sized enterprises’ or ‘SMEs’ shall mean companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria : an average number of employees during the financial year of less than 250, a total balance sheet not exceeding EUR 43 million and an annual net turnover not exceeding EUR 50 million.

Reducing administrative costs and improving information to SMEs : the attractiveness of SME growth markets should be reinforced by further reducing the compliance costs and administrative burdens faced by SME growth market issuers. There is a need for a sharper focus on SMEs – the subjects of this Regulation – and their needs. The amended text stressed that cutting red tape is a vital part of that process, but other steps also need to be taken. Efforts need to be made to improve the information that is directly available to SMEs about the financing options open to them.

EU Growth Prospectus : the EU Growth Prospectus is a condensed form of the full prospectus to be published when securities are offered to the public or are admitted to trading on a regulated market, which includes essential information and documentation. The EU Growth Prospectus is shorter and therefore cheaper to produce, reducing costs for SMEs.

SMEs should be able to choose to use the EU Growth Prospectus. Moreover, in offers of securities up to EUR 20 million any issuer should also be able to choose to use the EU Growth Prospectus unless they intend to apply for admission to trading on a regulated market. Alternatively, issuers should be able to choose to draw up a full prospectus under Regulation (EU) 2017/1129.

Insider lists : the current less stringent requirements for SME growth markets issuers to produce, in accordance with Regulation (EU) No 596/2014, an insider list only upon the request of the competent authority, is of limited practical effect.

The existing alleviation should therefore be replaced by the possibility for SME growth markets issuers to maintain only a list of permanent insiders, which should include persons and direct family of persons who have regular access to inside information due to their function or position within the issuer. That list should be kept up to date on an annual basis and be communicated to the competent authority.

Since insider lists are an important tool for regulators when investigating potential market abuse. They preserve the integrity of the markets. It is essential to clarify that the obligation to establish insider lists rests with both issuers and persons acting on their behalf or on their account. The responsibilities of persons acting on behalf or on account of the issuer with regard to the establishment of insider lists should be clarified in order to avoid divergent interpretations and practices across the Union.

Reporting : the Commission shall, by 31 December 2020 at the latest, draw up a report:

on SMEs’ financing, their access to financial markets and the success of SME growth markets; on the impact of own fund requirements, investment ratios and any other measures that could have a restrictive impact on: (i) insurance and reinsurance companies in financing listed and unlisted SMEs; (ii) institutions for occupational retirement provision (IORP 2) in financing listed and non-listed SMEs; (iii) asset managers and investment firms in financing listed and non-listed SMEs.

The Commission shall, by 31 December 2019, set up an expert stakeholder group to monitor the success of SME growth markets.

Documents
2018/12/03
   EP - Vote in committee, 1st reading/single reading
2018/12/03
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
2018/10/11
   EP - Amendments tabled in committee
Documents
2018/09/19
   ESC - Economic and Social Committee: opinion, report
Documents
2018/09/05
   EP - Committee draft report
Documents
2018/06/11
   EP - Committee referral announced in Parliament, 1st reading/single reading
2018/05/31
   EP - SANDER Anne (PPE) appointed as rapporteur in ECON
2018/05/24
   EC - Document attached to the procedure
2018/05/24
   EC - Document attached to the procedure
2018/05/24
   EC - Legislative proposal published
Details

PURPOSE: to facilitate access to capital for smaller and medium-sized enterprises.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: newly listed small and medium-sized enterprises (SMEs) are a key driver of investment and job creation. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since.

Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017.

The Commission considers that a regulatory framework still needs to be put in place to further facilitate SMEs' access to public savings. During the mid-term review of the Capital Market Union Action Plan in June 2017, the Commission reinforced the focus on SME access to public markets.

Companies listed on an SME growth market are required to comply with certain EU rules, in particular Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 2017/1129 on prospectuses. The Commission proposes to amend certain technical provisions of these two Regulations with a view to (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets.

IMPACT ASSESSMENT: the alleviations under the Market Abuse Regulation should benefit to all companies listed on SME Growth Markets and not only to SMEs listed on those trading venues. This package of measures will support companies listed on SME Growth Markets, by reducing their administrative burden and by enabling improved liquidity.

CONTENT : the proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation. This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract.

The main elements of the proposal are as follows:

Exemption of negotiated private placements of bonds with institutional investors when (i) the issuer seeking a private placement of bonds already has its equity or non-equity financial instruments admitted to trading on an SME Growth Market; and (ii) if an alternative wall-crossing procedure is in place, by which any potential qualified investor acknowledges the regulatory duties stemming from the access to inside information. Creation of a European regime for liquidity provision contracts for SME Growth Market equity issuers while allowing National Competent Authorities to establish Accepted Market Practices. This would increase liquidity and reduce volatility of SME shares, thus increasing the attractiveness of SME Growth Markets for investors, intermediaries and exchanges. Justification of delayed inside information to be made only on request (and no need to keep a disclosure record). This would reduce the administrative burden on issuers present on SME growth markets by exempting them from the obligation to register a long list of information (statement of deferred information). Obligation to maintain a list of 'permanent insiders' : this would alleviate the burden on issuers, by avoiding the costs of drawing up an ad hoc list of insiders for each piece of inside information. The impact on the capacity of National Competent Authorities to detect insider trading would be minimal as they rarely rely on insider lists in practice. Adoption of a new deadline for the publication of transactions carried out by persons discharging managerial responsibilities within issuers of SME growth markets. Such persons shall declare their transactions to the issuer and the national competent authority within three working days. Thereafter, after such notification, the issuer shall have two additional days to publish the information. Creation of a lighter ‘transfer prospectus’ for SME Growth Market issuers listed for at least three years when seeking a graduation to regulated market. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market.

Documents

  • Commission response to text adopted in plenary: SP(2019)440
  • Results of vote in Parliament: Results of vote in Parliament
  • Decision by Parliament, 1st reading/single reading: T8-0439/2019
  • Approval in committee of the text agreed at 1st reading interinstitutional negotiations: PE637.279
  • Approval in committee of the text agreed at 1st reading interinstitutional negotiations: GEDA/A/(2019)002694
  • Coreper letter confirming interinstitutional agreement: GEDA/A/(2019)002694
  • Committee report tabled for plenary, 1st reading/single reading: A8-0437/2018
  • Amendments tabled in committee: PE628.662
  • Economic and Social Committee: opinion, report: CES2916/2018
  • Committee draft report: PE627.044
  • Document attached to the procedure: EUR-Lex
  • Document attached to the procedure: SWD(2018)0243
  • Document attached to the procedure: EUR-Lex
  • Document attached to the procedure: SWD(2018)0244
  • Legislative proposal published: COM(2018)0331
  • Legislative proposal published: EUR-Lex
  • Document attached to the procedure: EUR-Lex SWD(2018)0243
  • Document attached to the procedure: EUR-Lex SWD(2018)0244
  • Committee draft report: PE627.044
  • Economic and Social Committee: opinion, report: CES2916/2018
  • Amendments tabled in committee: PE628.662
  • Coreper letter confirming interinstitutional agreement: GEDA/A/(2019)002694
  • Commission response to text adopted in plenary: SP(2019)440

Votes

A8-0437/2018 - Anne Sander - Am 2 18/04/2019 12:29:48.000

2019/04/18 Outcome: +: 448, 0: 71, -: 18
DE FR PL ES GB RO BE IT AT PT NL BG CZ SE FI DK HR SK HU LV LT LU EE MT SI IE EL
Total
73
66
40
40
49
23
21
37
16
18
25
13
14
14
11
11
9
8
11
7
6
5
5
5
4
5
1
icon: PPE PPE
147

United Kingdom PPE

Against (1)

2

Italy PPE

1

Denmark PPE

For (1)

1

Lithuania PPE

2

Luxembourg PPE

2

Estonia PPE

For (1)

1

Slovenia PPE

2

Ireland PPE

2
icon: S&D S&D
132

Netherlands S&D

3

Czechia S&D

For (1)

1

Croatia S&D

For (1)

1

Slovakia S&D

2

Hungary S&D

For (1)

1

Latvia S&D

1

Luxembourg S&D

For (1)

1

Estonia S&D

For (1)

1

Malta S&D

2

Slovenia S&D

For (1)

1
icon: ECR ECR
58

Romania ECR

2

Italy ECR

1

Netherlands ECR

2

Bulgaria ECR

1

Czechia ECR

2

Sweden ECR

2

Finland ECR

1

Croatia ECR

For (1)

1

Slovakia ECR

2
icon: ALDE ALDE
57

Romania ALDE

For (1)

1

Austria ALDE

For (1)

1

Portugal ALDE

1

Bulgaria ALDE

3

Sweden ALDE

2

Denmark ALDE

2

Croatia ALDE

2

Latvia ALDE

1

Lithuania ALDE

1

Luxembourg ALDE

For (1)

1

Estonia ALDE

2

Slovenia ALDE

For (1)

1

Ireland ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
45

United Kingdom Verts/ALE

4

Belgium Verts/ALE

2

Austria Verts/ALE

2

Netherlands Verts/ALE

1

Sweden Verts/ALE

3

Finland Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Croatia Verts/ALE

For (1)

1

Hungary Verts/ALE

2

Latvia Verts/ALE

1

Lithuania Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: NI NI
10

Germany NI

2

France NI

For (1)

Abstain (1)

2

Poland NI

Against (1)

2
3

Greece NI

1
icon: GUE/NGL GUE/NGL
32

Germany GUE/NGL

4

United Kingdom GUE/NGL

Abstain (1)

1

Italy GUE/NGL

3

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Czechia GUE/NGL

1

Sweden GUE/NGL

Abstain (1)

1

Denmark GUE/NGL

Abstain (1)

1

Ireland GUE/NGL

2
icon: ENF ENF
28

Germany ENF

Against (1)

1

Poland ENF

2

Belgium ENF

Abstain (1)

1

Netherlands ENF

4
icon: EFDD EFDD
28

Germany EFDD

Abstain (1)

1

Czechia EFDD

Abstain (1)

1

A8-0437/2018 - Anne Sander - Am 2

2019/04/18 Outcome: +: 448, 0: 71, -: 18
DE FR PL ES GB RO BE IT AT PT NL BG CZ SE FI DK HR SK HU LV LT LU EE MT SI IE EL ??
Total
73
66
40
38
48
23
21
37
16
18
25
13
14
13
11
11
9
8
11
7
6
5
5
5
4
5
1
1
icon: PPE PPE
147

United Kingdom PPE

Against (1)

2

Italy PPE

1

Denmark PPE

For (1)

1

Lithuania PPE

2

Luxembourg PPE

2

Estonia PPE

For (1)

1

Slovenia PPE

2

Ireland PPE

2
icon: S&D S&D
132

Netherlands S&D

3

Czechia S&D

For (1)

1

Croatia S&D

For (1)

1

Slovakia S&D

2

Hungary S&D

For (1)

1

Latvia S&D

1

Luxembourg S&D

For (1)

1

Estonia S&D

For (1)

1

Malta S&D

2

Slovenia S&D

For (1)

1

S&D

For (1)

1
icon: ECR ECR
58

Romania ECR

2

Italy ECR

1

Netherlands ECR

2

Bulgaria ECR

1

Czechia ECR

2

Sweden ECR

2

Finland ECR

1

Croatia ECR

For (1)

1

Slovakia ECR

2
icon: ALDE ALDE
56

Romania ALDE

For (1)

1

Austria ALDE

For (1)

1

Portugal ALDE

1

Bulgaria ALDE

3

Sweden ALDE

2

Denmark ALDE

2

Croatia ALDE

2

Latvia ALDE

1

Lithuania ALDE

1

Luxembourg ALDE

For (1)

1

Estonia ALDE

2

Slovenia ALDE

For (1)

1

Ireland ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
43

United Kingdom Verts/ALE

4

Belgium Verts/ALE

2

Austria Verts/ALE

2

Netherlands Verts/ALE

1

Sweden Verts/ALE

2

Finland Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Croatia Verts/ALE

For (1)

1

Hungary Verts/ALE

2

Latvia Verts/ALE

1

Lithuania Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: NI NI
10

Germany NI

2

France NI

For (1)

Abstain (1)

2

Poland NI

Against (1)

2
3

Greece NI

1
icon: GUE/NGL GUE/NGL
32

Germany GUE/NGL

4

United Kingdom GUE/NGL

Abstain (1)

1

Italy GUE/NGL

3

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Czechia GUE/NGL

1

Sweden GUE/NGL

Abstain (1)

1

Denmark GUE/NGL

Abstain (1)

1

Ireland GUE/NGL

2
icon: ENF ENF
28

Germany ENF

Against (1)

1

Poland ENF

2

Belgium ENF

Abstain (1)

1

Netherlands ENF

4
icon: EFDD EFDD
28

Germany EFDD

Abstain (1)

1

Czechia EFDD

Abstain (1)

1
AmendmentsDossier
37 2018/0165(COD)
2018/10/11 ECON 37 amendments...
source: 628.662

History

(these mark the time of scraping, not the official date of the change)

council
  • body: CSL type: Council Meeting council: Economic and Financial Affairs ECOFIN meeting_id: 3725 url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=SMPL&ROWSPP=25&RESULTSET=1&NRROWS=500&DOC_LANCD=EN&ORDERBY=DOC_DATE+DESC&CONTENTS=3725*&MEET_DATE=08/11/2019 date: 2019-11-08T00:00:00
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  • date: 2018-05-24T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0331/COM_COM(2018)0331_EN.docx title: COM(2018)0331 type: Legislative proposal published celexid: CELEX:52018PC0331:EN body: EC commission: DG: url: http://ec.europa.eu/info/departments/financial-stability-financial-services-and-capital-markets-union_en title: Financial Stability, Financial Services and Capital Markets Union Commissioner: DOMBROVSKIS Valdis type: Legislative proposal published
  • date: 2018-06-11T00:00:00 body: EP type: Committee referral announced in Parliament, 1st reading/single reading committees: body: EP shadows: group: S&D name: GILL Neena group: ECR name: SWINBURNE Kay group: ALDE name: TREMOSA I BALCELLS Ramon group: GUE/NGL name: LÓPEZ BERMEJO Paloma responsible: True committee: ECON date: 2018-05-31T00:00:00 committee_full: Economic and Monetary Affairs rapporteur: group: EPP name: SANDER Anne body: EP responsible: False committee_full: Environment, Public Health and Food Safety committee: ENVI body: EP responsible: False committee_full: Internal Market and Consumer Protection committee: IMCO body: EP responsible: False committee_full: Legal Affairs committee: JURI
commission
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docs
  • date: 2018-05-24T00:00:00 docs: url: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2018:0243:FIN:EN:PDF title: EUR-Lex title: SWD(2018)0243 type: Document attached to the procedure body: EC
  • date: 2018-05-24T00:00:00 docs: url: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2018:0244:FIN:EN:PDF title: EUR-Lex title: SWD(2018)0244 type: Document attached to the procedure body: EC
  • date: 2018-09-05T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE627.044 title: PE627.044 type: Committee draft report body: EP
  • date: 2018-09-19T00:00:00 docs: title: CES2916/2018 type: Economic and Social Committee: opinion, report body: ESC
  • date: 2018-10-11T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE628.662 title: PE628.662 type: Amendments tabled in committee body: EP
  • date: 2019-03-20T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/03-20/ECON_LA(2019)002694_EN.pdf title: GEDA/A/(2019)002694 type: Coreper letter confirming interinstitutional agreement body: CSL
events
  • date: 2018-05-24T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0331/COM_COM(2018)0331_EN.docx title: COM(2018)0331 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2018&nu_doc=0331 title: EUR-Lex summary: PURPOSE: to facilitate access to capital for smaller and medium-sized enterprises. PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: newly listed small and medium-sized enterprises (SMEs) are a key driver of investment and job creation. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. The Commission considers that a regulatory framework still needs to be put in place to further facilitate SMEs' access to public savings. During the mid-term review of the Capital Market Union Action Plan in June 2017, the Commission reinforced the focus on SME access to public markets. Companies listed on an SME growth market are required to comply with certain EU rules, in particular Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 2017/1129 on prospectuses. The Commission proposes to amend certain technical provisions of these two Regulations with a view to (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. IMPACT ASSESSMENT: the alleviations under the Market Abuse Regulation should benefit to all companies listed on SME Growth Markets and not only to SMEs listed on those trading venues. This package of measures will support companies listed on SME Growth Markets, by reducing their administrative burden and by enabling improved liquidity. CONTENT : the proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation. This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract. The main elements of the proposal are as follows: Exemption of negotiated private placements of bonds with institutional investors when (i) the issuer seeking a private placement of bonds already has its equity or non-equity financial instruments admitted to trading on an SME Growth Market; and (ii) if an alternative wall-crossing procedure is in place, by which any potential qualified investor acknowledges the regulatory duties stemming from the access to inside information. Creation of a European regime for liquidity provision contracts for SME Growth Market equity issuers while allowing National Competent Authorities to establish Accepted Market Practices. This would increase liquidity and reduce volatility of SME shares, thus increasing the attractiveness of SME Growth Markets for investors, intermediaries and exchanges. Justification of delayed inside information to be made only on request (and no need to keep a disclosure record). This would reduce the administrative burden on issuers present on SME growth markets by exempting them from the obligation to register a long list of information (statement of deferred information). Obligation to maintain a list of 'permanent insiders' : this would alleviate the burden on issuers, by avoiding the costs of drawing up an ad hoc list of insiders for each piece of inside information. The impact on the capacity of National Competent Authorities to detect insider trading would be minimal as they rarely rely on insider lists in practice. Adoption of a new deadline for the publication of transactions carried out by persons discharging managerial responsibilities within issuers of SME growth markets. Such persons shall declare their transactions to the issuer and the national competent authority within three working days. Thereafter, after such notification, the issuer shall have two additional days to publish the information. Creation of a lighter ‘transfer prospectus’ for SME Growth Market issuers listed for at least three years when seeking a graduation to regulated market. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market.
  • date: 2018-06-11T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2018-12-03T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
  • date: 2018-12-03T00:00:00 type: Committee decision to open interinstitutional negotiations with report adopted in committee body: EP
  • date: 2018-12-07T00:00:00 type: Committee report tabled for plenary, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2018-0437&language=EN title: A8-0437/2018 summary: The Committee on Economic and Monetary Affairs adopted the report by Anne SANDER (EPP, FR) on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the promotion of the use of SME growth markets. The proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation. This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract. The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal. Horizontal Union policy for SMEs : the amended text underlined that the diversification of SME lending is a guarantee for the economic health of the EU and stressed the need for additional regulations to ensure that SMEs can be matched up with arrangements such as business angels, seed capital, risk capital, etc. Parliament clarified that small and medium-sized enterprises’ or ‘SMEs’ shall mean companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria : an average number of employees during the financial year of less than 250, a total balance sheet not exceeding EUR 43 million and an annual net turnover not exceeding EUR 50 million. Reducing administrative costs and improving information to SMEs : the attractiveness of SME growth markets should be reinforced by further reducing the compliance costs and administrative burdens faced by SME growth market issuers. There is a need for a sharper focus on SMEs – the subjects of this Regulation – and their needs. The amended text stressed that cutting red tape is a vital part of that process, but other steps also need to be taken. Efforts need to be made to improve the information that is directly available to SMEs about the financing options open to them. EU Growth Prospectus : the EU Growth Prospectus is a condensed form of the full prospectus to be published when securities are offered to the public or are admitted to trading on a regulated market, which includes essential information and documentation. The EU Growth Prospectus is shorter and therefore cheaper to produce, reducing costs for SMEs. SMEs should be able to choose to use the EU Growth Prospectus. Moreover, in offers of securities up to EUR 20 million any issuer should also be able to choose to use the EU Growth Prospectus unless they intend to apply for admission to trading on a regulated market. Alternatively, issuers should be able to choose to draw up a full prospectus under Regulation (EU) 2017/1129. Insider lists : the current less stringent requirements for SME growth markets issuers to produce, in accordance with Regulation (EU) No 596/2014, an insider list only upon the request of the competent authority, is of limited practical effect. The existing alleviation should therefore be replaced by the possibility for SME growth markets issuers to maintain only a list of permanent insiders, which should include persons and direct family of persons who have regular access to inside information due to their function or position within the issuer. That list should be kept up to date on an annual basis and be communicated to the competent authority. Since insider lists are an important tool for regulators when investigating potential market abuse. They preserve the integrity of the markets. It is essential to clarify that the obligation to establish insider lists rests with both issuers and persons acting on their behalf or on their account. The responsibilities of persons acting on behalf or on account of the issuer with regard to the establishment of insider lists should be clarified in order to avoid divergent interpretations and practices across the Union. Reporting : the Commission shall, by 31 December 2020 at the latest, draw up a report: on SMEs’ financing, their access to financial markets and the success of SME growth markets; on the impact of own fund requirements, investment ratios and any other measures that could have a restrictive impact on: (i) insurance and reinsurance companies in financing listed and unlisted SMEs; (ii) institutions for occupational retirement provision (IORP 2) in financing listed and non-listed SMEs; (iii) asset managers and investment firms in financing listed and non-listed SMEs. The Commission shall, by 31 December 2019, set up an expert stakeholder group to monitor the success of SME growth markets.
  • date: 2019-03-21T00:00:00 type: Approval in committee of the text agreed at 1st reading interinstitutional negotiations body: EP docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/inag/2019/03-20/ECON_AG(2019)637279_EN.pdf title: PE637.279 url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/03-20/ECON_LA(2019)002694_EN.pdf title: GEDA/A/(2019)002694
  • date: 2019-04-18T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2019-0439 title: T8-0439/2019 summary: The European Parliament adopted by 448 votes to 18, with 71 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the promotion of the use of SME growth markets. The proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation . This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract. The European Parliament’s position adopted at first reading under the ordinary legislative procedure amended the Commission proposal as follows: Horizontal Union policy for SMEs The amended text underlined that a horizontal Union policy for SMEs is therefore essential. Such policy needs to be inclusive, coherent and effective, and must take into account the various subgroups of SMEs and their different needs. Regulatory alleviation shall be for the benefit of those smaller companies that have growth potential. The success of an SME growth market should not be measured simply by the number of companies listed, but rather by the rate of growth achieved by the listed companies. Insider lists The proposed alleviation relief would allow issuers in SME growth markets to maintain only a list of persons, such as directors, members of management bodies or in-house counsels, who, in the normal course of their duties, have regular access to inside information. However, since some Member States deem insider lists to be an important element for ensuring a higher level of market integrity, Member States shall be provided with the option to introduce a requirement for the SME Growth Market issuers to provide more extensive insider lists that include all persons who have access to inside information. Nevertheless, taking into account the need to ensure a proportionate administrative burden for SMEs, these lists should contain an alleviated amount of information as compared to full insider lists. The obligation to establish lists of insiders shall be incumbent on both issuers and persons acting in their name or on their behalf. Issuers and any person acting on their behalf or on their account, shall take all reasonable steps to ensure that any person on the insider list acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information. A shorter ‘Prospectus’ more suitable for SMEs The EU Growth Prospectus is short and therefore economical to produce, reducing costs for SMEs. As a result, it is planned to amend Regulation (EU) 2017/1129 of the European Parliament and of the Council shall be amended to allow firms seeking an initial public offer with a tentative market capitalisation of below EUR 200 million to draw up an EU Growth Prospectus. Impact assessment of the legislation When reviewing all legislation relating to the financing of listed and unlisted SMEs, the Commission shall analyse regulatory and administrative barriers, including on research, that limit or prevent investment in SMEs. In doing so, the Commission should assess the evolution of capital flows to SMEs and strive to create a favourable regulatory environment to foster the financing of SMEs.
links/Research document
title
Briefing
url
http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)630311
other
  • body: EC dg: url: http://ec.europa.eu/info/departments/financial-stability-financial-services-and-capital-markets-union_en title: Financial Stability, Financial Services and Capital Markets Union commissioner: DOMBROVSKIS Valdis
otherinst
  • name: European Economic and Social Committee
procedure/Mandatory consultation of other institutions
European Economic and Social Committee
procedure/Modified legal basis
Rules of Procedure EP 159
procedure/Notes
  • 12/12/2018 Decision to enter into interinstitutional negotiations confirmed by plenary (Rule 69c)
procedure/dossier_of_the_committee
Old
ECON/8/13257
New
  • ECON/8/13257
procedure/instrument
Old
Regulation
New
  • Regulation
  • Amending Regulation (EU) No 596/2014 2011/0295(COD) Amending Regulation (EU) 2017/1129 2015/0268(COD)
procedure/other_consulted_institutions
European Economic and Social Committee
procedure/stage_reached
Old
Awaiting committee decision
New
Provisional agreement between Parliament and Council on final act
procedure/subject
Old
  • 2.50.03 Securities and financial markets, stock exchange, CIUTS, investments
  • 2.50.08 Financial services, financial reporting and auditing
  • 3.45.02 Small and medium-sized enterprises (SME), craft industries
New
2.50.03
Securities and financial markets, stock exchange, CIUTS, investments
2.50.08
Financial services, financial reporting and auditing
3.45.02
Small and medium-sized enterprises (SME), craft industries
procedure/summary
  • Amending Regulation (EU) 2017/1129
  • Amending Regulation (EU) No 596/2014
activities/0/commission/0
DG
Commissioner
DOMBROVSKIS Valdis
activities/0/docs/0/text
  • PURPOSE: to facilitate access to capital for smaller and medium-sized enterprises.

    PROPOSED ACT: Regulation of the European Parliament and of the Council.

    ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

    BACKGROUND: newly listed small and medium-sized enterprises (SMEs) are a key driver of investment and job creation. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since.

    Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017.

    The Commission considers that a regulatory framework still needs to be put in place to further facilitate SMEs' access to public savings. During the mid-term review of the Capital Market Union Action Plan in June 2017, the Commission reinforced the focus on SME access to public markets.

    Companies listed on an SME growth market are required to comply with certain EU rules, in particular Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 2017/1129 on prospectuses. The Commission proposes to amend certain technical provisions of these two Regulations with a view to (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets.

    IMPACT ASSESSMENT: the alleviations under the Market Abuse Regulation should benefit to all companies listed on SME Growth Markets and not only to SMEs listed on those trading venues. This package of measures will support companies listed on SME Growth Markets, by reducing their administrative burden and by enabling improved liquidity.

    CONTENT: the proposed legislative amendments aim in particular at lowering the administrative burden and compliance costs faced by SME Growth Market issuers and resulting from the application of the Market Abuse Regulation and the Prospectus Regulation. This initiative also seeks to promote liquidity by ensuring that any SME Growth Market issuer in the EU can enter into a liquidity provision contract. 

    The main elements of the proposal are as follows:

    • Exemption of negotiated private placements of bonds with institutional investors when (i) the issuer seeking a private placement of bonds already has its equity or non-equity financial instruments admitted to trading on an SME Growth Market; and (ii) if an alternative wall-crossing procedure is in place, by which any potential qualified investor acknowledges the regulatory duties stemming from the access to inside information.
    • Creation of a European regime for liquidity provision contracts for SME Growth Market equity issuers while allowing National Competent Authorities to establish Accepted Market Practices. This would increase liquidity and reduce volatility of SME shares, thus increasing the attractiveness of SME Growth Markets for investors, intermediaries and exchanges. 
    • Justification of delayed inside information to be made only on request (and no need to keep a disclosure record). This would reduce the administrative burden on issuers present on SME growth markets by exempting them from the obligation to register a long list of information (statement of deferred information).
    • Obligation to maintain a list of 'permanent insiders': this would alleviate the burden on issuers, by avoiding the costs of drawing up an ad hoc list of insiders for each piece of inside information. The impact on the capacity of National Competent Authorities to detect insider trading would be minimal as they rarely rely on insider lists in practice.
    • Adoption of a new deadline for the publication of transactions carried out by persons discharging managerial responsibilities within issuers of SME growth markets. Such persons shall declare their transactions to the issuer and the national competent authority within three working days. Thereafter, after such notification, the issuer shall have two additional days to publish the information.
    • Creation of a lighter ‘transfer prospectus’ for SME Growth Market issuers listed for at least three years when seeking a graduation to regulated market. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market.
activities/1
date
2018-06-11T00:00:00
body
EP
type
Committee referral announced in Parliament, 1st reading/single reading
committees
committees/0/date
2018-05-31T00:00:00
committees/0/rapporteur
  • group: EPP name: SANDER Anne
committees/0/shadows
  • group: S&D name: GILL Neena
  • group: ECR name: SWINBURNE Kay
  • group: ALDE name: TREMOSA I BALCELLS Ramon
  • group: GUE/NGL name: LÓPEZ BERMEJO Paloma
other/0
body
EC
dg
commissioner
DOMBROVSKIS Valdis
procedure/Mandatory consultation of other institutions
European Economic and Social Committee
procedure/dossier_of_the_committee
ECON/8/13257
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision
activities
  • date: 2018-05-24T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0331/COM_COM(2018)0331_EN.docx celexid: CELEX:52018PC0331:EN type: Legislative proposal published title: COM(2018)0331 type: Legislative proposal published body: EC commission:
committees
  • body: EP responsible: True committee_full: Economic and Monetary Affairs committee: ECON
  • body: EP responsible: False committee_full: Environment, Public Health and Food Safety committee: ENVI
  • body: EP responsible: False committee_full: Internal Market and Consumer Protection committee: IMCO
  • body: EP responsible: False committee_full: Legal Affairs committee: JURI
links
other
    procedure
    reference
    2018/0165(COD)
    instrument
    Regulation
    legal_basis
    Treaty on the Functioning of the EU TFEU 114
    stage_reached
    Preparatory phase in Parliament
    summary
    subtype
    Legislation
    title
    Promotion of the use of SME growth markets
    type
    COD - Ordinary legislative procedure (ex-codecision procedure)
    subject