The Capital Markets Union initiative aims at reducing dependence on bank lending, at diversifying market-based sources of financing for all smaller and medium-sized enterprises (‘SMEs’) and at promoting the issuance of bonds and shares by SMEs on public markets. Companies established in the Union that seek to raise capital on trading venues are facing high one-off and ongoing disclosure and compliance costs which can deter them from seeking an admission to trading on Union trading venues in the first place. In addition, shares issued by SMEs on Union trading venues tend to suffer from lower levels of liquidity and higher volatility, which increases the cost of capital, making this source of funding too onerous. 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. Download regeling: pdf


One of the main objectives of the action plan on building a capital markets union (CMU) proposed by the Commission in 2015 is to make it easier for companies to enter and raise capital on markets. In this context, among other things, the Commission committed to review the regulatory barriers to SME admission on public markets and SME growth markets, a new category of multilateral trading facilities created by the markets in financial instruments directive (MiFID II, see specific fiche among ‘Arrived’ waggons) to facilitate access to capital for SMEs. As a first step in this direction, the prospectus regulation adopted in 2017 (see specific fiche among ‘Arrived’ waggons) has introduced a lighter regime for financial instruments issued by SMEs.

In the capital markets union mid-term review published in June 2017, the Commission announced it would be taking further action with its SME listing package and flagged up the necessity to focus on simplifying capital-raising for SMEs. A public consultation was ran from in early 2018, to seek ideas on how to cut red tape and offer SMEs a supportive environment to list their shares or bonds on SME growth markets, while maintaining investor protection and market integrity.

The public consultation’s findings were instrumental for a legislative initiative published on 24 May 2018, consisting of a proposal for a regulation amending the market abuse regulation and the prospectus regulation, accompanied by a draft delegated regulation bringing technical adjustments to MiFID II. The new rules proposed by the Commission aim to:

  • reduce the administrative burden and the high compliance costs faced by SME growth market issuers while ensuring a high level of market integrity and investor protection
  • foster the liquidity of publicly listed SME shares to make these markets more attractive for investors, issuers and intermediaries
  • facilitate the registration of multilateral trading facilities as SME growth markets.

Parliament’s Committee on Economic and Monetary Affairs (ECON) appointed Anne Sander (EPP, France) as rapporteur for this dossier. She presented her draft report on 5 September 2018 with the deadline for tabling amendments on 11 October 2018. ECON adopted its report on 3 December 2018 (33 for, 0 against, 5 abstentions). The proposed amendments aimed 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. The report clarified that 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.

Changes to the proposal further emphasised the need for a horizontal Union policy for SMEs, which should be inclusive, coherent and effective taking into account the different needs of various subgroups of SMEs. Changes also stressed that regulatory alleviation should be for the benefit of those smaller companies that have real growth potential. Therefore, 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. The Commission shall, by 31 December 2020 at the latest, draw up a report on SMEs’ financing, the impact of own fund requirements, investment ratios and any other measures with restrictive impact. Additionally, the Commission shall, by 31 December 2019, set up an expert stakeholder group to monitor the success of SME growth markets.

On 12 December 2018, the decision to enter into interinstitutional negotiations was confirmed by the plenary. These are expected to start after the Council has adopted its general approach.


For further information: Ioannis Zachariadis,

As of 20 February 2019