Corporate weekly highlights—31 May 2018

Corporate weekly highlights—31 May 2018

This week’s edition of Corporate highlights includes news of the European Commission’s proposed new rules to give SMEs better access to financing through public markets, the government’s proposal to hold directors of nuisance call companies more personally accountable and the implementation of the GDPR on 25 May 2018 by way of the Data Protection Act 2018.

Equity capital markets

Capital markets union: broadening access to market-based finance for SMEs

The European Commission has proposed new rules to give small and medium enterprises (SMEs) better access to financing through public markets as part of the EU’s capital markets union (CMU) agenda. The aim is to provide EU SMEs with easier access to cheaper funding to aid their expansion.

Despite the benefits of stock exchange listings, EU public markets for SMEs can struggle to attract new issuers and the number of SME initial public offerings today has halved compared to 2006-2007. This is why the Commission, as announced in the Mid-Term Review of the CMU Action Plan in June 2017, wants to adapt existing EU rules on access to public markets in the Market Abuse Regulation (MAR), the Prospectus Regulation and the recast Markets in Financial Instruments Directive (MiFID II). This complements a comprehensive series of measures already adopted by the Commission since the launch of the CMU to improve access to market-based finance for SMEs, for example requirements for SME growth markets which enable smaller companies to get equity capital and debt finance (bonds) which entered into force in January 2018.

The key changes to SME listings rules are as follows:

  1. adapting current obligations to keep registers of persons that have access to price-sensitive information so as to avoid excessive administrative burden for SMEs, while ensuring that competent authorities can still investigate cases of insider dealing
  2. allowing issuers with at least three years of listing on SME growth markets to produce a lighter prospectus when transferring to a regulated market
  3. making it easier for trading venues specialised in bond issuance to register as SME

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