SME Growth Markets
Under the Capital Markets Union project (CMU), and in order to support jobs and growth in the EU, the European Commission has set in motion several legislative and non-legislative initiatives aimed at strengthening public capital markets financing for SMEs and midcaps over the last several years.
In 2018, the European Commission published legislative proposals to build upon the creation of ‘SME Growth Markets’ in MiFID II. This follows from an industry consultation at the end of 2017 on potential proposals for targeted amendments to MiFID II, the Prospectus Regulation and the Market Abuse Regulation (MAR) to strengthen the attractiveness of these markets for SMEs and midcaps. As the operator of Growth Markets across its jurisdictions, Euronext is greatly supportive of such initiatives.
Euronext’s position on the EU SME Growth Markets initiatives
Commission Proposals to Promote the Use of SME Growth Markets (May 2018)
On May 24th 2018 the European Commission published proposals to amend the MiFID II, Prospectus and Market Abuse Regulations’ Frameworks in order to introduce further regulatory alleviations for all companies listed on SME Growth Markets.
Euronext welcomes and supports these initiatives. It is however our experience that, while many themes are shared across countries and markets, there are important differences and nuances which require flexibility in the regulatory and supervisory approach. This is critical to enabling implementation of tailored solutions that meet the specific needs of SMEs and midcap public capital markets.
While Euronext is supportive of legislative amendment in many of the areas identified by the Commission, we believe it is important that policymakers and regulators embed this core principle in any EU legislation seeking to improve the attractiveness of EU Growth Markets for SMEs and midcaps.
As an example, we believe the legislative changes should go further in ensuring that bond-only issuers also benefit from the proposed alleviations, particularly when it comes to the Market Abuse Regulation (MAR) where the majority of requirements are tailored for equity markets.
In the aim of developing a regulatory framework supporting access to public markets for all SMEs, Euronext makes proposals to adapt definitions in the Prospectus Regulation and a number of requirements in the MAR framework to bond-only issuers.
Commission Consultation on SME Growth Markets (December 2017)
In December 2017, as part of the preparation of the legislative proposals, the European Commission published a consultation on potential measures to strengthen the attractiveness of MIFID II’s SME Growth Markets, with a view to introducing targeted amendments to the relevant EU regulatory frameworks.
A detailed summary of the Euronext response to the consultation can be accessed above. The paper notably includes a comprehensive overview of the challenges faced by public markets for SMEs across the Euronext jurisdictions.
ESMA Consultation on functioning of the SME Growth Market regime
n May 2020, ESMA published a consultation on the functioning of the regime for SME Growth markets under MiFID and on the amendments to the Market Abuse Regulation for the promotion of the use of SME Growth Markets. Euronext welcomes the opportunity to comment on this consultation as we believe there is a lot of potential for this regime, but more needs to be done to make it a more attractive proposition for SME issuers. Our response to the consultation can be accessed below.
Downloads
21/12/2017
Public consultation on building a proportionate regulatory environment to support SME listing
01/04/2018
EU SME Growth Markets Consultation - Euronext Position Paper
21/06/2018
Commission Amendments to the Delegated Acts under MiFID II – Euronext Position Paper
07/08/2020
Euronext Position Paper on the EU SME Growth Markets Initiatives