Deal reached on improving SMEs' access to market-based finance 

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Negotiators agreed on changes aimed at streamlining the listing process and making it more proportionate to a company’s size.

On Thursday, the Economic and Monetary Affairs (ECON) Committee negotiators reached an agreement with the Council on a set of measures to make public capital markets more attractive for EU companies and facilitate their access to capital.

The provisional agreement aims to improve access to stock markets by alleviating the administrative burden of listing on stock exchanges. The agreed listing package should streamline the listing process, balance regulatory and compliance costs for companies seeking to list, as well as for companies that are already listed, while protecting investors and market integrity.

Investment research by third parties

In order to revitalise the market for investment research and enhance the visibility of listed companies, negotiators agreed to amend the Markets in Financial Instruments Directive (MIFID) concerning, among others, the rules on the provision of investment research by third parties.

Investment firms will have more flexibility to choose the way in which they wish to organise the payments of execution services and research, while being transparent about it. They should inform their clients whether they apply a separate or joint payment for services and third-party research and about the measures to prevent or manage conflicts of interest. Finally, they should assess whether this research helps the firm’s clients make investment decisions.

Prospectus simplified and cost reduced

Negotiators reached a provisional agreement to amend the Prospectus regulation, to harmonise requirements for drawing up, approving and distributing the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. To reduce costs, prospectuses should have a standard format; include essential information and use, as much as possible, plain language depending on the type of prospectus and investor targeted.

They also agreed on changes to the regulation on market abuse (MAR) aimed at preventing and detecting market abuse, market manipulation and insider dealing, and to the regulation on markets in financial instruments (MiFIR), which provides a legal framework for securities markets, investment intermediaries, and trading venues.

Multiple-vote share structure

Finally, co-legislators agreed on common rules on multiple-vote share structure (MVSS) in companies that seek to have their shares traded on an SME growth market and other Multilateral Trading Facilities.

In order to ensure fair and non-discriminatory treatment of shareholders, as well as adequate protection of the interests of the shareholders who do not hold multiple-vote shares, co-legislators agreed on mandatory safeguards in companies that have a multiple-vote share structure. Furthermore, to be transparent to future shareholders, a company would have to publish information on its multiple-vote share structure.


Alfred Sant (S&D, MT), the lead MEP, said: "The end point of negotiations has been disappointing. The progress made in negotiations on the Listing Act package by way of the Prospectus Act and the changes to the MIFID, MIFIR, and MAR was encouraging. But the Council take it or leave it position on the multiple voting share structure directive is inadequate from the perspective of keeping the capital markets union project on track.

Next steps

The provisional deal will be formally adopted by Parliament and Council before it can come into force.