The European Commission has announced new regulatory initiatives which aim to promote small and medium enterprises (SME) growth markets as part of its Capital Markets Union. There have been a number of previous key proposals aimed at SMEs, including on crowdfunding and venture capital finance and the European Commission is now looking to further ease SMEs’ access to public markets.
Out of the 20 million SMEs in Europe, only 3,000 are listed on stock-exchanges. The European Commission want to alter this. The European Commission is propose rules that will make it easier for SMEs to access to a wide range of funding at all stages of their development and raise capital on public markets.
It is hoped that a more liquid market will help facilitate the trading of SME shares thanks to a high number of buyers and sellers, which will make it easier for SMEs to get funding. At the same time the proposals are intended to allow investors in SMEs to be able to turn investments into cash more easily, ultimately contributing to the creation of jobs and growth in the EU.
The European Commission’s aim is to stake steps to cut red-tape for small and medium companies trying to list and issue securities on the ‘SME Growth Markets’, establish a new category of trading venue dedicated to small issuers, and foster the liquidity of publicly-listed SME shares. The new rules are intended to introduce a more proportionate approach to support SME listing while at the same time safeguarding investor protection and market integrity.
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