European Commission Adopts Legislation to Promote Small and Mid-sized Enterprises Growth Markets

Following its consultation earlier this year on a proposed regulation, the European Commission has adopted a Delegated Regulation regarding certain registration conditions to promote the use of SME Growth Markets for the purposes of the revised Markets in Financial Instruments package, known as MiFID II. SME Growth Markets are a new sub-category of multilateral trading facility introduced by MiFID II in January 2018 to facilitate access to capital for SMEs. The adopted Delegated Regulation will amend existing delegated legislation under MiFID II to address regulatory barriers to the take-up of SME Growth Markets. The adopted Delegated Regulation: (i) introduces a less restrictive definition of non-equity SME issuer based on issuance size, with the threshold being set at €50 million over a period of 12 months, starting on January 1 each year; (ii) allows SME Growth Market operators to exempt non-equity issuers from the requirement to publish half-yearly financial reports; and (iii) introduces a new free float requirement as a condition where shares are admitted to trading for the first time.

The adopted Delegated Regulation is subject to approval of the European Parliament and the Council of the European Union. Once finalized, it will enter into force following the day after it is published in the Official Journal of the European Union. The Regulation will apply three months after its entry into force. 

View the adopted Delegated Regulation.

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