C 184/104
EN
Official Journal of the European Union
25.5.2023
1.4.
In general, the Committee welcomes the proposal to give issuers the choice to publish a prospectus in English only, it being the established common language of international investors.
However, publication of a full-scale document, and not only the summary, in national languages would empower local retail investors.
The EESC advises issuers to bear in mind that using ‘English-only’ issuance documents would hinder the development of a national retail investment base.
1.5.
The EESC notes that bundling investment research with other services is likely to increase the visibility of listed small and medium-sized enterprises (SMEs).
Therefore, the Committee welcomes the proposed increase in the unbundling threshold to EUR 10 billion; however, further measures to encourage independent research may also be needed.
1.6.
The EESC highly values the Commission's approach in mitigating legal uncertainty surrounding information disclosure requirements.
However, the proposal for a cross-market order book supervision (CMOBS) mechanism that would facilitate the exchange of order book data among supervisors might pose the risk of creating an uneven playing-field, since bilateral trading venues would be beyond the scope of the reporting regime.
2.
Background 2.1.
On 7 December 2022, the Commission published a set of proposals (1) on measures to further develop the EU's Capital Markets Union (CMU).
Part of the package — a new Listing Act — aims to reduce the administrative burden on companies of all sizes, particularly SMEs, so that they can better access funding by listing on stock exchanges.
2.2.
The Commission states that EU capital markets remain fragmented and underdeveloped in size.
Studies show that the total number of listed companies on SME growth markets in Europe has barely increased since 2014 (2), despite the fact that those listed enjoyed clear benefits, as evidenced by the increase in their market valuation.
In general, listed companies increase their revenues, create more jobs and grow their balance sheets at a faster pace than their unlisted peers.
A number of studies provide evidence of a sub-optimal situation with respect to SME initial public offerings (IPOs) in Europe.
2.3.
The Listing Act establishes simpler and improved listing rules, in particular for SMEs, while also seeking to avoiding jeopardising investor protection and market integrity.
2.4.
The Act claims to ensure significant cost reductions and to contribute to increasing the number of IPOs in the EU.
Simpler prospectus rules would make it easier and cheaper for companies to get listed.
Allowing companies to utilise multiple-voting rights shares (MVRS) when listing for the first time on SME growth markets provides an opportunity for the owners to keep control of their company's vision.
2.5.
More proportionate rules on market abuse would also lead to greater clarity and legal certainty for listed companies about compliance with key information disclosure requirements.
The proposed Listing Act also aims to enhance the provision and distribution of investment research on midcaps and SMEs, which in turn should support their listings on public markets.
2.6.
Other anticipated benefits include:
— shorter, more timely, more comparable and easier to navigate corporate information for investors;
— better coverage of equity research, helping to make investment decisions;
— more efficient supervision thanks to clearer listing rules and improved tools for investigating cases of market abuse;
(1) (2)
Capital markets union: clearing, insolvency and listing package.
Technical Expert Stakeholder Group on SMEs final report, Empowering EU Capital Markets for SMEs: Making listing cool again.