Article 1 Subject matter, scope and exemptions
1. This Regulation lays down requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market situated or operating within a Member State. 2. This Regulation shall not apply to the following types of securities: (a) units issued by collective investment undertakings other than the closed-end type; (b) non-equity securities issued by a Member State or by one of a Member State’s regional or local authorities, by public international bodies of which one or more Member States are members, by the European Central Bank or by the central banks of the Member States; (c) shares in the capital of central banks of the Member States; (d) securities unconditionally and irrevocably guaranteed by a Member State or by one of a Member State’s regional or local authorities; (e) securities issued by associations with legal status or non-profit-making bodies, recognised by a Member State, for the purposes of obtaining the funding necessary to achieve their non-profit-making objectives; (f) non-fungible shares of capital whose main purpose is to provide the holder with a right to occupy an apartment, or other form of immovable property or a part thereof and where the shares cannot be sold on without that right being given up. 3. Without prejudice to the second subparagraph of this paragraph and to Article 4, this Regulation shall not apply to an offer of securities to the public with a total consideration in the Union of less than EUR 1 000 000, which shall be calculated over a period of 12 months. Member States shall not extend the obligation to draw up a prospectus in accordance with this Regulation to offers of securities to the public referred to in the first subparagraph of this paragraph. However, in those cases, Member States may require other disclosure requirements at national level to the extent that such requirements do not constitute a disproportionate or unnecessary burden. 4. The obligation to publish a prospectus set out in Article 3(1) shall not apply to any of the following types of offers of securities to the public: (a) an offer of securities addressed solely to qualified investors; (b) an offer of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors; (c) an offer of securities whose denomination per unit amounts to at least EUR 100 000; (d) an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 100 000 per investor, for each separate offer; (e) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued capital; (f) securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (g) securities offered, allotted or to be allotted in connection with a merger or division, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (h) dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (i) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or by an affiliated undertaking provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer or allotment; (j) non-equity securities issued in a continuous or repeated manner by a credit institution, where the total aggregated consideration in the Union for the securities offered is less than EUR 75 000 000 per credit institution calculated over a period of 12 months, provided that those securities: (i) are not subordinated, convertible or exchangeable; and (ii) do not give a right to subscribe for or acquire other types of securities and are not linked to a derivative instrument. 5. The obligation to publish a prospectus set out in Article 3(3) shall not apply to the admission to trading on a regulated market of any of the following: (a) securities fungible with securities already admitted to trading on the same regulated market, provided that they represent, over a period of 12 months, less than 20 % of the number of securities already admitted to trading on the same regulated market; (b) shares resulting from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, where the resulting shares are of the same class as the shares already admitted to trading on the same regulated market, provided that the resulting shares represent, over a period of 12 months, less than 20 % of the number of shares of the same class already admitted to trading on the same regulated market, subject to the second subparagraph of this paragraph; (c) securities resulting from the conversion or exchange of other securities, own funds or eligible liabilities by a resolution authority due to the exercise of a power referred to in Article 53(2), 59(2) or Article 63(1) or (2) of Directive 2014/59/EU; (d) shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, where the issuing of such shares does not involve any increase in the issued capital; (e) securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (f) securities offered, allotted or to be allotted in connection with a merger or a division, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (g) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer or allotment; (h) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the securities and the reasons for and detail of the offer or allotment; (i) non-equity securities issued in a continuous or repeated manner by a credit institution, where the total aggregated consideration in the Union for the securities offered is less than EUR 75 000 000 per credit institution calculated over a period of 12 months, provided that those securities: (i) are not subordinated, convertible or exchangeable; and (ii) do not give a right to subscribe for or acquire other types of securities and are not linked to a derivative instrument; (j) securities already admitted to trading on another regulated market, on the following conditions: (i) that those securities, or securities of the same class, have been admitted to trading on that other regulated market for more than 18 months; (ii) that, for securities first admitted to trading on a regulated market after 1 July 2005, the admission to trading on that other regulated market was subject to a prospectus approved and published in accordance with Directive 2003/71/EC; (iii) that, except where point (ii) applies, for securities first admitted to listing after 30 June 1983, listing particulars were approved in accordance with the requirements of Council Directive 80/390/EEC ( 17 ) or Directive 2001/34/EC of the European Parliament and of the Council ( 18 ) ; (iv) that the ongoing obligations for trading on that other regulated market have been fulfilled; (v) that the person seeking the admission of a security to trading on a regulated market under the exemption set out in this point (j) makes available to the public in the Member State of the regulated market where admission to trading is sought, in accordance with the arrangements set out in Article 21(2), a document the content of which complies with Article 7, except that the maximum length set out in Article 7(3) shall be extended by two additional sides of A4-sized paper, drawn up in a language accepted by the competent authority of the Member State of the regulated market where admission is sought; and (vi) that the document referred to in point (v) states where the most recent prospectus can be obtained and where the financial information published by the issuer pursuant to ongoing disclosure obligations is available. The requirement that the resulting shares represent, over a period of 12 months, less than 20 % of the number of shares of the same class already admitted to trading on the same regulated market as referred to in point (b) of the first subparagraph shall not apply in any of the following cases: (a) where a prospectus was drawn up in accordance with either this Regulation or Directive 2003/71/EC upon the offer to the public or admission to trading on a regulated market of the securities giving access to the shares; (b) where the securities giving access to the shares were issued before 20 July 2017; (c) where the shares qualify as Common Equity Tier 1 items as laid down in Article 26 of Regulation (EU) No 575/2013 of the European Parliament and of the Council ( 19 ) of an institution as defined in point (3) of Article 4(1) of that Regulation and result from the conversion of Additional Tier 1 instruments issued by that institution due to the occurrence of a trigger event as laid down in point (a) of Article 54(1) of that Regulation; (d) where the shares qualify as eligible own funds or eligible basic own funds as defined in Section 3 of Chapter VI of Title I of Directive 2009/138/EC of the European Parliament and of the Council ( 20 ) , and result from the conversion of other securities which was triggered for the purposes of fulfilling the obligations to comply with the Solvency Capital Requirement or Minimum Capital Requirement as laid down in Sections 4 and 5 of Chapter VI of Title I of Directive 2009/138/EC or the group solvency requirement as laid down in Title III of Directive 2009/138/EC. 6. The exemptions from the obligation to publish a prospectus that are set out in paragraphs 4 and 5 may be combined together. However, the exemptions in points (a) and (b) of the first subparagraph of paragraph 5 shall not be combined together if such combination could lead to the immediate or deferred admission to trading on a regulated market over a period of 12 months of more than 20 % of the number of shares of the same class already admitted to trading on the same regulated market, without a prospectus being published. 7. The Commission is empowered to adopt delegated acts in accordance with Article 44 supplementing this Regulation by setting out the minimum information content of the documents referred to in points (f) and (g) of paragraph 4 and points (e) and (f) of the first subparagraph of paragraph 5 of this Article.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 1 ):
Subject matter, scope and exemptions 1. This Regulation lays down requirements for the drawing up, approval and distribution of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market situated or operating within a Member State. 2. This Regulation shall not apply to the following types of securities: (a) units issued by collective investment undertakings other than the closed-end type; (b) non-equity securities issued by a Member State or by one of a Member State’s regional or local authorities, by public international bodies of which one or more Member States are members, by the European Central Bank or by the central banks of the Member States; (c) shares in the capital of central banks of the Member States; (d) securities unconditionally and irrevocably guaranteed by a Member State or by one of a Member State’s regional or local authorities; (e) securities issued by associations with legal status or non-profit-making bodies, recognised by a Member State, for the purposes of obtaining the funding necessary to achieve their non-profit-making objectives; (f) non-fungible shares of capital whose main purpose is to provide the holder with a right to occupy an apartment, or other form of immovable property or a part thereof and where the shares cannot be sold on without that right being given up. 3. Without prejudice to the second subparagraph of this paragraph and to Article 4, this Regulation shall not apply to an offer of securities to the public with a total consideration in the Union of less than EUR 1 000 000 , which shall be calculated over a period of 12 months. Member States shall not extend the obligation to draw up a prospectus in accordance with this Regulation to offers of securities to the public referred to in the first subparagraph of this paragraph. However, in those cases, Member States may require other disclosure requirements at national level to the extent that such requirements do not constitute a disproportionate or unnecessary burden. 4. The obligation to publish a prospectus set out in Article 3(1) shall not apply to any of the following types of offers of securities to the public: (a) an offer of securities addressed solely to qualified investors; (b) an offer of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors; (c) an offer of securities whose denomination per unit amounts to at least EUR 100 000 ; (d) an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 100 000 per investor, for each separate offer; (e) shares issued in substitution for shares of the same class already issued, if the issuing of such new shares does not involve any increase in the issued capital; (f) securities offered in connection with a takeover by means of an exchange offer, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (g) securities offered, allotted or to be allotted in connection with a merger or division, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (h) dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer; (i) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or by an affiliated undertaking provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer or allotment; non-equity securities issued in a continuous or repeated manner by a credit institution, where the total aggregated consideration in the Union for the securities offered is less than EUR 75 000 000 per credit institution calculated over a period of 12 months, provided that those securities: (i) are not subordinated, convertible or exchangeable; and (ii) do not give a right to subscribe for or acquire other types of securities and are not linked to a derivative instrument. non-equity securities issued in a continuous or repeated manner by a credit institution, where the total aggregated consideration in the Union for the securities offered is less than EUR 75 000 000 per credit institution calculated over a period of 12 months, provided that those securities: (i) are not subordinated, convertible or exchangeable; and (ii) do not give a right to subscribe for or acquire other types of securities and are not linked to a derivative instrument. 5. The obligation to publish a prospectus set out in Article 3(3) shall not apply to the admission to trading on a regulated market of any of the following: (a) securities fungible with securities already admitted to trading on the same regulated market, provided that they represent, over a period of 12 months, less than 20 % of the number of securities already admitted to trading on the same regulated market; (b) shares resulting from the conversion or exchange of other securities or from the exercise of the rights conferred by other securities, where the resulting shares are of the same class as the shares already admitted to trading on the same regulated market, provided that the resulting shares represent, over a period of 12 months, less than 20 % of the number of shares of the same class already admitted to trading on the same regulated market, subject to the second subparagraph of this paragraph; (d) shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, where the issuing of such shares does not involve any increase in the issued capital; (f) securities offered, allotted or to be allotted in connection with a merger or a division, provided that a document is made available to the public in accordance with the arrangements set out in Article 21(2), containing information describing the transaction and its impact on the issuer; (g) shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer or allotment; (h) securities offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, provided that the said securities are of the same class as the securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the securities and the reasons for and detail of the offer or allotment; securities already admitted to trading on another regulated market, on the following conditions: (i) that those securities, or securities of the same class, have been admitted to trading on that other regulated market for more than 18 months; (ii) that, for securities first admitted to trading on a regulated market after 1 July 2005, the admission to trading on that other regulated market was subject to a prospectus approved and published in accordance with Directive 2003/71/EC; (iii) that, except where point (ii) applies, for securities first admitted to listing after 30 June 1983, listing particulars were approved in accordance with the requirements of Council Directive 80/390/EEC ( 1 ) or Directive 2001/34/EC of the European Parliament and of the Council ( 2 ); (iv) that the ongoing obligations for trading on that other regulated market have been fulfilled; (vi) that the document referred to in point (v) states where the most recent prospectus can be obtained and where the financial information published by the issuer pursuant to ongoing disclosure obligations is available. The requirement that the resulting shares represent, over a period of 12 months, less than 20 % of the number of shares of the same class already admitted to trading on the same regulated market as referred to in point (b) of the first subparagraph shall not apply in any of the following cases: (a) where a prospectus was drawn up in accordance with either this Regulation or Directive 2003/71/EC upon the offer to the public or admission to trading on a regulated market of the securities giving access to the shares; (b) where the securities giving access to the shares were issued before 20 July 2017; (d) where the shares qualify as eligible own funds or eligible basic own funds as defined in Section 3 of Chapter VI of Title I of Directive 2009/138/EC of the European Parliament and of the Council ( 4 ), and result from the conversion of other securities which was triggered for the purposes of fulfilling the obligations to comply with the Solvency Capital Requirement or Minimum Capital Requirement as laid down in Sections 4 and 5 of Chapter VI of Title I of Directive 2009/138/EC or the group solvency requirement as laid down in Title III of Directive 2009/138/EC. 6. The exemptions from the obligation to publish a prospectus that are set out in paragraphs 4 and 5 may be combined together. However, the exemptions in points (a) and (b) of the first subparagraph of paragraph 5 shall not be combined together if such combination could lead to the immediate or deferred admission to trading on a regulated market over a period of 12 months of more than 20 % of the number of shares of the same class already admitted to trading on the same regulated market, without a prospectus being published. 6a. The exemptions set out in point (f) of paragraph 4 and in point (e) of paragraph 5 shall only apply to equity securities, and only in the following cases: (a) the equity securities offered are fungible with existing securities already admitted to trading on a regulated market prior to the takeover and its related transaction, and the takeover is not considered to be a reverse acquisition transaction within the meaning of paragraph B19 of international financial reporting standard (IFRS) 3, Business Combinations, adopted by Commission Regulation (EC) No 1126/2008 ( 5 ); or the supervisory authority that has the competence, where applicable, to review the offer document under Directive 2004/25/EC of the European Parliament and of the Council ( 6 ) has issued a prior approval of the document referred to in point (f) of paragraph 4 or point (e) of paragraph 5 of this Article. 6b. The exemptions set out in point (g) of paragraph 4 and in point (f) of paragraph 5 shall apply only to equity securities in respect of which the transaction is not considered to be a reverse acquisition transaction within the meaning of paragraph B19 of IFRS 3, Business Combinations, and only in the following cases: (a) the equity securities of the acquiring entity have already been admitted to trading on a regulated market prior to the transaction; or (b) the equity securities of the entities subject to the division have already been admitted to trading on a regulated market prior to the transaction. 7. The Commission is empowered to adopt delegated acts in accordance with Article 44 supplementing this Regulation by setting out the minimum information content of the documents referred to in points (f) and (g) of paragraph 4 and points (e) and (f) of the first subparagraph of paragraph 5 of this Article.
Article 2 Definitions
For the purposes of this Regulation, the following definitions apply: (a) ‘securities’ means transferable securities as defined in point (44) of Article 4(1) of Directive 2014/65/EU with the exception of money market instruments as defined in point (17) of Article 4(1) of Directive 2014/65/EU, having a maturity of less than 12 months; (b) ‘equity securities’ means shares and other transferable securities equivalent to shares in companies, as well as any other type of transferable securities giving the right to acquire any of the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said issuer; (c) ‘non-equity securities’ means all securities that are not equity securities; (d) ‘offer of securities to the public’ means a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. This definition also applies to the placing of securities through financial intermediaries; (e) ‘qualified investors’ means persons or entities that are listed in points (1) to (4) of Section I of Annex II to Directive 2014/65/EU, and persons or entities who are, on request, treated as professional clients in accordance with Section II of that Annex, or recognised as eligible counterparties in accordance with Article 30 of Directive 2014/65/EU unless they have entered into an agreement to be treated as non-professional clients in accordance with the fourth paragraph of Section I of that Annex. For the purposes of applying the first sentence of this point, investment firms and credit institutions shall, upon request from the issuer, communicate the classification of their clients to the issuer subject to compliance with the relevant laws on data protection; (f) ‘small and medium-sized enterprises’ or ‘SMEs’ means any of the following: (i) 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 43 000 000 and an annual net turnover not exceeding EUR 50 000 000; (ii) small and medium-sized enterprises as defined in point (13) of Article 4(1) of Directive 2014/65/EU. (g) ‘credit institution’ means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013; (h) ‘issuer’ means a legal entity which issues or proposes to issue securities; (i) ‘offeror’ means a legal entity or individual which offers securities to the public; (j) ‘regulated market’ means a regulated market as defined in point (21) of Article 4(1) of Directive 2014/65/EU; (k) ‘advertisement’ means a communication with both of the following characteristics: (i) relating to a specific offer of securities to the public or to an admission to trading on a regulated market; (ii) aiming to specifically promote the potential subscription or acquisition of securities; (l) ‘regulated information’ means regulated information as defined in point (k) of Article 2(1) of Directive 2004/109/EC; (m) ‘home Member State’ means: (i) for all issuers of securities established in the Union which are not mentioned in point (ii), the Member State where the issuer has its registered office; (ii) for any issues of non-equity securities whose denomination per unit amounts to at least EUR 1 000, and for any issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer, the Member State where the issuer has its registered office, or where the securities were or are to be admitted to trading on a regulated market or where the securities are offered to the public, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market. The same shall apply to non-equity securities in a currency other than euro, provided that the value of such minimum denomination is nearly equivalent to EUR 1 000; (iii) for all issuers of securities established in a third country which are not mentioned in point (ii), the Member State where the securities are intended to be offered to the public for the first time or where the first application for admission to trading on a regulated market is made, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market, subject to a subsequent choice by issuers established in a third country in either of the following circumstances: — where the home Member State was not determined by the choice of those issuers; — in accordance with point (i)(iii) of Article 2(1) of Directive 2004/109/EC; (n) ‘host Member State’ means the Member State where an offer of securities to the public is made or admission to trading on a regulated market is sought, when different from the home Member State; (o) ‘competent authority’ means the authority designated by each Member State in accordance with Article 31, unless otherwise specified in this Regulation; (p) ‘collective investment undertaking other than the closed-end type’ means unit trusts and investment companies with both of the following characteristics: (i) they raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; (ii) their units are, at the holder’s request, repurchased or redeemed, directly or indirectly, out of their assets; (q) ‘units of a collective investment undertaking’ means securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets; (r) ‘approval’ means the positive act at the outcome of the scrutiny by the home Member State’s competent authority of the completeness, the consistency and the comprehensibility of the information given in the prospectus; (s) ‘base prospectus’ means a prospectus that complies with Article 8, and, at the choice of the issuer, the final terms of the offer; (t) ‘working days’ means working days of the relevant competent authority excluding Saturdays, Sundays and public holidays, as defined in the national law applicable to that competent authority; (u) ‘multilateral trading facility’ or ‘MTF’ means a multilateral trading facility as defined in point (22) of Article 4(1) of Directive 2014/65/EU; (v) ‘organised trading facility’ or ‘OTF’ means an organised trading facility as defined in point (23) of Article 4(1) of Directive 2014/65/EU; (w) ‘SME growth market’ means an SME growth market as defined in point (12) of Article 4(1) of Directive 2014/65/EU; (x) ‘third country issuer’ means an issuer established in a third country; (y) ‘offer period’ means the period during which potential investors may purchase or subscribe for the securities concerned; (z) ‘durable medium’ means any instrument which: (i) enables a customer to store information addressed personally to that customer in a way accessible for future reference and for a period adequate for the purposes of the information; and (ii) allows the unchanged reproduction of the information stored.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 2 ):
Definitions For the purposes of this Regulation, the following definitions apply: (b) ‘equity securities’ means shares and other transferable securities equivalent to shares in companies, as well as any other type of transferable securities giving the right to acquire any of the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said issuer; (c) ‘non-equity securities’ means all securities that are not equity securities; (d) ‘offer of securities to the public’ means a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. This definition also applies to the placing of securities through financial intermediaries; ‘qualified investors’ means persons or entities that are listed in points (1) to (4) of Section I of Annex II to Directive 2014/65/EU, and persons or entities who are, on request, treated as professional clients in accordance with Section II of that Annex, or recognised as eligible counterparties in accordance with Article 30 of Directive 2014/65/EU unless they have entered into an agreement to be treated as non-professional clients in accordance with the fourth paragraph of Section I of that Annex. For the purposes of applying the first sentence of this point, investment firms and credit institutions shall, upon request from the issuer, communicate the classification of their clients to the issuer subject to compliance with the relevant laws on data protection; ‘small and medium-sized enterprises’ or ‘SMEs’ means any of the following: (i) 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 43 000 000 and an annual net turnover not exceeding EUR 50 000 000 ; small and medium-sized enterprises as defined in point (13) of Article 4(1) of Directive 2014/65/EU. (h) ‘issuer’ means a legal entity which issues or proposes to issue securities; (i) ‘offeror’ means a legal entity or individual which offers securities to the public; ‘regulated market’ means a regulated market as defined in point (21) of Article 4(1) of Directive 2014/65/EU; ‘advertisement’ means a communication with both of the following characteristics: (i) relating to a specific offer of securities to the public or to an admission to trading on a regulated market; (ii) aiming to specifically promote the potential subscription or acquisition of securities; ‘advertisement’ means a communication with both of the following characteristics: (i) relating to a specific offer of securities to the public or to an admission to trading on a regulated market; (ii) aiming to specifically promote the potential subscription or acquisition of securities; ‘regulated information’ means regulated information as defined in point (k) of Article 2(1) of Directive 2004/109/EC; ‘home Member State’ means: (i) for all issuers of securities established in the Union which are not mentioned in point (ii), the Member State where the issuer has its registered office; (ii) for any issues of non-equity securities whose denomination per unit amounts to at least EUR 1 000 , and for any issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer, the Member State where the issuer has its registered office, or where the securities were or are to be admitted to trading on a regulated market or where the securities are offered to the public, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market. The same shall apply to non-equity securities in a currency other than euro, provided that the value of such minimum denomination is nearly equivalent to EUR 1 000 ; for all issuers of securities established in a third country which are not mentioned in point (ii), the Member State where the securities are intended to be offered to the public for the first time or where the first application for admission to trading on a regulated market is made, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market, subject to a subsequent choice by issuers established in a third country in either of the following circumstances: — where the home Member State was not determined by the choice of those issuers; (n) ‘host Member State’ means the Member State where an offer of securities to the public is made or admission to trading on a regulated market is sought, when different from the home Member State; (o) ‘competent authority’ means the authority designated by each Member State in accordance with Article 31, unless otherwise specified in this Regulation; ‘collective investment undertaking other than the closed-end type’ means unit trusts and investment companies with both of the following characteristics: (i) they raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; (ii) their units are, at the holder’s request, repurchased or redeemed, directly or indirectly, out of their assets; ‘collective investment undertaking other than the closed-end type’ means unit trusts and investment companies with both of the following characteristics: (i) they raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; (ii) their units are, at the holder’s request, repurchased or redeemed, directly or indirectly, out of their assets; (q) ‘units of a collective investment undertaking’ means securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets; (r) ‘approval’ means the positive act at the outcome of the scrutiny by the home Member State’s competent authority of the completeness, the consistency and the comprehensibility of the information given in the prospectus; (s) ‘base prospectus’ means a prospectus that complies with Article 8, and, at the choice of the issuer, the final terms of the offer; (t) ‘working days’ means working days of the relevant competent authority excluding Saturdays, Sundays and public holidays, as defined in the national law applicable to that competent authority; ‘multilateral trading facility’ or ‘MTF’ means a multilateral trading facility as defined in point (22) of Article 4(1) of Directive 2014/65/EU; ‘organised trading facility’ or ‘OTF’ means an organised trading facility as defined in point (23) of Article 4(1) of Directive 2014/65/EU; ‘SME growth market’ means an SME growth market as defined in point (12) of Article 4(1) of Directive 2014/65/EU; (x) ‘third country issuer’ means an issuer established in a third country; (y) ‘offer period’ means the period during which potential investors may purchase or subscribe for the securities concerned; ‘durable medium’ means any instrument which: (i) enables a customer to store information addressed personally to that customer in a way accessible for future reference and for a period adequate for the purposes of the information; and (ii) allows the unchanged reproduction of the information stored. ‘durable medium’ means any instrument which: (i) enables a customer to store information addressed personally to that customer in a way accessible for future reference and for a period adequate for the purposes of the information; and (ii) allows the unchanged reproduction of the information stored.
Article 3 Obligation to publish a prospectus and exemption
1. Without prejudice to Article 1(4), securities shall only be offered to the public in the Union after prior publication of a prospectus in accordance with this Regulation. 2. Without prejudice to Article 4, a Member State may decide to exempt offers of securities to the public from the obligation to publish a prospectus set out in paragraph 1 provided that: (a) such offers are not subject to notification in accordance with Article 25; and (b) the total consideration of each such offer in the Union is less than a monetary amount calculated over a period of 12 months which shall not exceed EUR 8 000 000. Member States shall notify the Commission and ESMA whether and how they decide to apply the exemption pursuant to the first subparagraph, including the monetary amount below which the exemption for offers in that Member State applies. They shall also notify the Commission and ESMA of any subsequent changes to that monetary amount. 3. Without prejudice to Article 1(5), securities shall only be admitted to trading on a regulated market situated or operating within the Union after prior publication of a prospectus in accordance with this Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 3 ):
Obligation to publish a prospectus and exemption 1. Without prejudice to Article 1(4), securities shall only be offered to the public in the Union after prior publication of a prospectus in accordance with this Regulation. 2. Without prejudice to Article 4, a Member State may decide to exempt offers of securities to the public from the obligation to publish a prospectus set out in paragraph 1 provided that: (a) such offers are not subject to notification in accordance with Article 25; and (b) the total consideration of each such offer in the Union is less than a monetary amount calculated over a period of 12 months which shall not exceed EUR 8 000 000 . Member States shall notify the Commission and ESMA whether and how they decide to apply the exemption pursuant to the first subparagraph, including the monetary amount below which the exemption for offers in that Member State applies. They shall also notify the Commission and ESMA of any subsequent changes to that monetary amount. 3. Without prejudice to Article 1(5), securities shall only be admitted to trading on a regulated market situated or operating within the Union after prior publication of a prospectus in accordance with this Regulation.
Article 4 Voluntary prospectus
1. Where an offer of securities to the public or an admission of securities to trading on a regulated market is outside the scope of this Regulation in accordance with Article 1(3), or exempted from the obligation to publish a prospectus in accordance with Article 1(4), 1(5) or 3(2), an issuer, an offeror or a person asking for admission to trading on a regulated market shall be entitled to voluntarily draw up a prospectus in accordance with this Regulation. 2. Such voluntarily drawn up prospectus approved by the competent authority of the home Member State, as determined in accordance with point (m) of Article 2, shall entail all the rights and obligations provided for a prospectus required under this Regulation and shall be subject to all provisions of this Regulation, under the supervision of that competent authority.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 4 ):
Voluntary prospectus 1. Where an offer of securities to the public or an admission of securities to trading on a regulated market is outside the scope of this Regulation in accordance with Article 1(3), or exempted from the obligation to publish a prospectus in accordance with Article 1(4), 1(5) or 3(2), an issuer, an offeror or a person asking for admission to trading on a regulated market shall be entitled to voluntarily draw up a prospectus in accordance with this Regulation. 2. Such voluntarily drawn up prospectus approved by the competent authority of the home Member State, as determined in accordance with point (m) of Article 2, shall entail all the rights and obligations provided for a prospectus required under this Regulation and shall be subject to all provisions of this Regulation, under the supervision of that competent authority.
Article 5 Subsequent resale of securities
1. Any subsequent resale of securities which were previously the subject of one or more of the types of offer of securities to the public listed in points (a) to (d) of Article 1(4) shall be considered as a separate offer and the definition set out in point (d) of Article 2 shall apply for the purpose of determining whether that resale is an offer of securities to the public. The placement of securities through financial intermediaries shall be subject to publication of a prospectus unless one of the exemptions listed in points (a) to (d) of Article 1(4) applies in relation to the final placement. No additional prospectus shall be required in any such subsequent resale of securities or final placement of securities through financial intermediaries as long as a valid prospectus is available in accordance with Article 12 and the issuer or the person responsible for drawing up such prospectus consents to its use by means of a written agreement. 2. Where a prospectus relates to the admission to trading on a regulated market of non-equity securities that are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in such securities, the securities shall not be resold to non-qualified investors, unless a prospectus is drawn up in accordance with this Regulation that is appropriate for non-qualified investors.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 5 ):
Subsequent resale of securities 1. Any subsequent resale of securities which were previously the subject of one or more of the types of offer of securities to the public listed in points (a) to (d) of Article 1(4) shall be considered as a separate offer and the definition set out in point (d) of Article 2 shall apply for the purpose of determining whether that resale is an offer of securities to the public. The placement of securities through financial intermediaries shall be subject to publication of a prospectus unless one of the exemptions listed in points (a) to (d) of Article 1(4) applies in relation to the final placement. No additional prospectus shall be required in any such subsequent resale of securities or final placement of securities through financial intermediaries as long as a valid prospectus is available in accordance with Article 12 and the issuer or the person responsible for drawing up such prospectus consents to its use by means of a written agreement. 2. Where a prospectus relates to the admission to trading on a regulated market of non-equity securities that are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in such securities, the securities shall not be resold to non-qualified investors, unless a prospectus is drawn up in accordance with this Regulation that is appropriate for non-qualified investors.
Article 6 The prospectus
1. Without prejudice to Article 14(2) and Article 18(1), a prospectus shall contain the necessary information which is material to an investor for making an informed assessment of: (a) the assets and liabilities, profits and losses, financial position, and prospects of the issuer and of any guarantor; (b) the rights attaching to the securities; and (c) the reasons for the issuance and its impact on the issuer. That information may vary depending on any of the following: (a) the nature of the issuer; (b) the type of securities; (c) the circumstances of the issuer; (d) where relevant, whether or not the non-equity securities have a denomination per unit of at least EUR 100 000 or are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in the securities. 2. The information in a prospectus shall be written and presented in an easily analysable, concise and comprehensible form, taking into account the factors set out in the second subparagraph of paragraph 1. 3. The issuer, offeror or person asking for the admission to trading on a regulated market may draw up the prospectus as a single document or as separate documents. Without prejudice to Article 8(8) and the second subparagraph of Article 7(1), a prospectus composed of separate documents shall divide the required information into a registration document, a securities note and a summary. The registration document shall contain the information relating to the issuer. The securities note shall contain the information concerning the securities offered to the public or to be admitted to trading on a regulated market.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 6 ):
The prospectus 1. Without prejudice to Article 14(2) and Article 18(1), a prospectus shall contain the necessary information which is material to an investor for making an informed assessment of: (a) the assets and liabilities, profits and losses, financial position, and prospects of the issuer and of any guarantor; (b) the rights attaching to the securities; and (c) the reasons for the issuance and its impact on the issuer. That information may vary depending on any of the following: (a) the nature of the issuer; (b) the type of securities; (c) the circumstances of the issuer; (d) where relevant, whether or not the non-equity securities have a denomination per unit of at least EUR 100 000 or are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in the securities. 2. The information in a prospectus shall be written and presented in an easily analysable, concise and comprehensible form, taking into account the factors set out in the second subparagraph of paragraph 1. 3. The issuer, offeror or person asking for the admission to trading on a regulated market may draw up the prospectus as a single document or as separate documents. Without prejudice to Article 8(8) and the second subparagraph of Article 7(1), a prospectus composed of separate documents shall divide the required information into a registration document, a securities note and a summary. The registration document shall contain the information relating to the issuer. The securities note shall contain the information concerning the securities offered to the public or to be admitted to trading on a regulated market.
Article 7 The prospectus summary
1. The prospectus shall include a summary that provides the key information that investors need in order to understand the nature and the risks of the issuer, the guarantor and the securities that are being offered or admitted to trading on a regulated market, and that is to be read together with the other parts of the prospectus to aid investors when considering whether to invest in such securities. By way of derogation from the first subparagraph, no summary shall be required where the prospectus relates to the admission to trading on a regulated market of non-equity securities provided that: (a) such securities are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in such securities; or (b) such securities have a denomination per unit of at least EUR 100 000. 2. The content of the summary shall be accurate, fair and clear and shall not be misleading. It is to be read as an introduction to the prospectus and it shall be consistent with the other parts of the prospectus. 3. The summary shall be drawn up as a short document written in a concise manner and of a maximum length of seven sides of A4-sized paper when printed. The summary shall: (a) be presented and laid out in a way that is easy to read, using characters of readable size; (b) be written in a language and a style that facilitate the understanding of the information, in particular, in language that is clear, non-technical, concise and comprehensible for investors. 4. The summary shall be made up of the following four sections: (a) an introduction, containing warnings; (b) key information on the issuer; (c) key information on the securities; (d) key information on the offer of securities to the public and/or the admission to trading on a regulated market. 5. The section referred to in point (a) of paragraph 4 shall contain: (a) the name and international securities identification number (ISIN) of the securities; (b) the identity and contact details of the issuer, including its legal entity identifier (LEI); (c) where applicable, the identity and contact details of the offeror, including its LEI if the offeror has legal personality, or of the person asking for admission to trading on a regulated market; (d) the identity and contact details of the competent authority approving the prospectus and, where different, the competent authority that approved the registration document or the universal registration document; (e) the date of approval of the prospectus; It shall contain the following warnings: (a) the summary should be read as an introduction to the prospectus; (b) any decision to invest in the securities should be based on a consideration of the prospectus as a whole by the investor; (c) where applicable, that the investor could lose all or part of the invested capital and, where the investor’s liability is not limited to the amount of the investment, a warning that the investor could lose more than the invested capital and the extent of such potential loss; (d) where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under national law, have to bear the costs of translating the prospectus before the legal proceedings are initiated; (e) civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus, or where it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities; (f) where applicable, the comprehension alert required in accordance with point (b) of Article 8(3) of Regulation (EU) No 1286/2014. 6. The section referred to in point (b) of paragraph 4 shall contain the following information: (a) under a sub-section entitled ‘Who is the issuer of the securities?’, a brief description of the issuer of the securities, including at least the following: (i) its domicile and legal form, its LEI, the law under which it operates and its country of incorporation; (ii) its principal activities; (iii) its major shareholders, including whether it is directly or indirectly owned or controlled and by whom; (iv) the identity of its key managing directors; (v) the identity of its statutory auditors; (b) under a sub-section entitled ‘What is the key financial information regarding the issuer?’ a selection of historical key financial information presented for each financial year of the period covered by the historical financial information, and any subsequent interim financial period accompanied by comparative data from the same period in the prior financial year. The requirement for comparative balance sheet information shall be satisfied by presenting the year-end balance sheet information. Key financial information shall, where applicable, include: (i) pro forma financial information; (ii) a brief description of any qualifications in the audit report relating to the historical financial information; (c) under a sub-section entitled ‘What are the key risks that are specific to the issuer?’ a brief description of the most material risk factors specific to the issuer contained in the prospectus, while not exceeding the total number of risk factors set out in paragraph 10. 7. The section referred to in point (c) of paragraph 4 shall contain the following information: (a) under a sub-section entitled ‘What are the main features of the securities?’, a brief description of the securities being offered to the public and/or admitted to trading on a regulated market including at least: (i) their type, class and ISIN; (ii) where applicable, their currency, denomination, par value, the number of securities issued and the term of the securities; (iii) the rights attached to the securities; (iv) the relative seniority of the securities in the issuer’s capital structure in the event of insolvency, including, where applicable, information on the level of subordination of the securities and the potential impact on the investment in the event of a resolution under Directive 2014/59/EU; (v) any restrictions on the free transferability of the securities; (vi) where applicable, the dividend or payout policy; (b) under a sub-section entitled ‘Where will the securities be traded?’, an indication as to whether the securities are or will be subject to an application for admission to trading on a regulated market or for trading on an MTF and the identity of all the markets where the securities are or are to be traded; (c) where there is a guarantee attached to the securities, under a sub-section entitled ‘Is there a guarantee attached to the securities?’, the following information: (i) a brief description of the nature and scope of the guarantee; (ii) a brief description of the guarantor, including its LEI; (iii) the relevant key financial information for the purpose of assessing the guarantor’s ability to fulfil its commitments under the guarantee; and (iv) a brief description of the most material risk factors pertaining to the guarantor contained in the prospectus in accordance with Article 16(3), while not exceeding the total number of risk factors set out in paragraph 10; (d) under a sub-section entitled ‘What are the key risks that are specific to the securities?’, a brief description of the most material risk factors specific to the securities contained in the prospectus, while not exceeding the total number of risk factors set out in paragraph 10. Where a key information document is required to be prepared under Regulation (EU) No 1286/2014, the issuer, the offeror or the person asking for admission to trading on a regulated market may substitute the content set out in this paragraph with the information set out in points (c) to (i) of Article 8(3) of Regulation (EU) No 1286/2014. Where Regulation (EU) No 1286/2014 applies, each Member State acting as a home Member State for the purpose of this Regulation may require issuers, offerors or persons asking for admission to trading on a regulated market to substitute the content set out in this paragraph with the information set out in points (c) to (i) of Article 8(3) of Regulation (EU) No 1286/2014 in the prospectuses approved by its competent authority. Where there is a substitution of content pursuant to the second subparagraph, the maximum length set out in paragraph 3 shall be extended by three additional sides of A4-sized paper. The content of the key information document shall be included as a distinct section of the summary. The page layout of that section shall clearly identify it as the content of the key information document as set out in points (c) to (i) of Article 8(3) of Regulation (EU) No 1286/2014. Where, in accordance with the third subparagraph of Article 8(9), a single summary covers several securities which differ only in some very limited details, such as the issue price or maturity date, the maximum length set out in paragraph 3 shall be extended by two additional sides of A4-sized paper. However, in the event that a key information document is required to be prepared for those securities under Regulation (EU) No 1286/2014 and the issuer, the offeror or the person asking for admission to trading on a regulated market proceeds with the substitution of content referred to in the second subparagraph of this paragraph, the maximum length shall be extended by three additional sides of A4-sized paper for each additional security. Where the summary contains the information referred to in point (c) of the first subparagraph, the maximum length set out in paragraph 3 shall be extended by one additional side of A4-sized paper. 8. The section referred to in point (d) of paragraph 4 shall contain the following information: (a) under a sub-section entitled ‘Under which conditions and timetable can I invest in this security?’, where applicable, the general terms, conditions and expected timetable of the offer, the details of the admission to trading on a regulated market, the plan for distribution, the amount and percentage of immediate dilution resulting from the offer and an estimate of the total expenses of the issue and/or offer, including estimated expenses charged to the investor by the issuer or the offeror; (b) if different from the issuer, under a sub-section entitled ‘Who is the offeror and/or the person asking for admission to trading?’, a brief description of the offeror of the securities and/or the person asking for admission to trading on a regulated market, including its domicile and legal form, the law under which it operates and its country of incorporation; (c) under a sub-section entitled ‘Why is this prospectus being produced?’, a brief description of the reasons for the offer or for the admission to trading on a regulated market, as well as, where applicable: (i) the use and estimated net amount of the proceeds; (ii) an indication of whether the offer is subject to an underwriting agreement on a firm commitment basis, stating any portion not covered; (iii) an indication of the most material conflicts of interest pertaining to the offer or the admission to trading. 9. Under each of the sections described in paragraphs 6, 7 and 8, the issuer may add sub-headings where deemed necessary. 10. The total number of risk factors included in the sections of the summary referred to in point (c) of paragraph 6 and point (c)(iv) and point (d) of the first subparagraph of paragraph 7 shall not exceed 15. 11. The summary shall not contain cross-references to other parts of the prospectus or incorporate information by reference. 12. Where a key information document is required to be prepared for securities offered to the public under Regulation (EU) No 1286/2014 and a home Member State requires the issuer, the offeror or the person asking for admission to trading on a regulated market to substitute the content of the key information document in accordance with the second sentence of the second subparagraph of paragraph 7 of this Article, the persons advising on or selling the securities on behalf of the issuer, the offeror or the person asking for admission to trading on a regulated market shall be deemed to have fulfilled, during the offer period, the obligation to provide the key information document in accordance with Article 13 of Regulation (EU) No 1286/2014, provided that they instead provide the investors concerned with the summary of the prospectus under the timing and conditions set out in Articles 13 and 14 of that Regulation. 13. ESMA shall develop draft regulatory technical standards to specify the content and format of presentation of the key financial information referred to in point (b) of paragraph 6, and the relevant key financial information referred to in point (c)(iii) of paragraph 7, taking into account the various types of securities and issuers and ensuring that the information produced is concise and understandable. ESMA shall submit those draft regulatory technical standards to the Commission by 21 July 2018. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 7 ):
The prospectus summary 1. The prospectus shall include a summary that provides the key information that investors need in order to understand the nature and the risks of the issuer, the guarantor and the securities that are being offered or admitted to trading on a regulated market, and that is to be read together with the other parts of the prospectus to aid investors when considering whether to invest in such securities. By way of derogation from the first subparagraph, no summary shall be required where the prospectus relates to the admission to trading on a regulated market of non-equity securities provided that: (a) such securities are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading in such securities; or (b) such securities have a denomination per unit of at least EUR 100 000 . 2. The content of the summary shall be accurate, fair and clear and shall not be misleading. It is to be read as an introduction to the prospectus and it shall be consistent with the other parts of the prospectus. 3. The summary shall be drawn up as a short document written in a concise manner and of a maximum length of seven sides of A4-sized paper when printed. The summary shall: (a) be presented and laid out in a way that is easy to read, using characters of readable size; (b) be written in a language and a style that facilitate the understanding of the information, in particular, in language that is clear, non-technical, concise and comprehensible for investors. 4. The summary shall be made up of the following four sections: (a) an introduction, containing warnings; (b) key information on the issuer; (c) key information on the securities; (d) key information on the offer of securities to the public and/or the admission to trading on a regulated market. 5. The section referred to in point (a) of paragraph 4 shall contain: (a) the name and international securities identification number (ISIN) of the securities; (b) the identity and contact details of the issuer, including its legal entity identifier (LEI); (c) where applicable, the identity and contact details of the offeror, including its LEI if the offeror has legal personality, or of the person asking for admission to trading on a regulated market; (d) the identity and contact details of the competent authority approving the prospectus and, where different, the competent authority that approved the registration document or the universal registration document; (e) the date of approval of the prospectus; It shall contain the following warnings: (a) the summary should be read as an introduction to the prospectus; (b) any decision to invest in the securities should be based on a consideration of the prospectus as a whole by the investor; (c) where applicable, that the investor could lose all or part of the invested capital and, where the investor’s liability is not limited to the amount of the investment, a warning that the investor could lose more than the invested capital and the extent of such potential loss; (d) where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under national law, have to bear the costs of translating the prospectus before the legal proceedings are initiated; (e) civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus, or where it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities; 6. The section referred to in point (b) of paragraph 4 shall contain the following information: under a sub-section entitled ‘Who is the issuer of the securities?’, a brief description of the issuer of the securities, including at least the following: (i) its domicile and legal form, its LEI, the law under which it operates and its country of incorporation; (ii) its principal activities; (iii) its major shareholders, including whether it is directly or indirectly owned or controlled and by whom; (iv) the identity of its key managing directors; (v) the identity of its statutory auditors; under a sub-section entitled ‘What is the key financial information regarding the issuer?’ a selection of historical key financial information presented for each financial year of the period covered by the historical financial information, and any subsequent interim financial period accompanied by comparative data from the same period in the prior financial year. The requirement for comparative balance sheet information shall be satisfied by presenting the year-end balance sheet information. Key financial information shall, where applicable, include: (i) pro forma financial information; (ii) a brief description of any qualifications in the audit report relating to the historical financial information; under a sub-section entitled ‘What is the key financial information regarding the issuer?’ a selection of historical key financial information presented for each financial year of the period covered by the historical financial information, and any subsequent interim financial period accompanied by comparative data from the same period in the prior financial year. The requirement for comparative balance sheet information shall be satisfied by presenting the year-end balance sheet information. Key financial information shall, where applicable, include: (i) pro forma financial information; (ii) a brief description of any qualifications in the audit report relating to the historical financial information; (c) under a sub-section entitled ‘What are the key risks that are specific to the issuer?’ a brief description of the most material risk factors specific to the issuer contained in the prospectus, while not exceeding the total number of risk factors set out in paragraph 10. 7. The section referred to in point (c) of paragraph 4 shall contain the following information: under a sub-section entitled ‘What are the main features of the securities?’, a brief description of the securities being offered to the public and/or admitted to trading on a regulated market including at least: (i) their type, class and ISIN; (ii) where applicable, their currency, denomination, par value, the number of securities issued and the term of the securities; (iii) the rights attached to the securities; (iv) the relative seniority of the securities in the issuer’s capital structure in the event of insolvency, including, where applicable, information on the level of subordination of the securities and the potential impact on the investment in the event of a resolution under Directive 2014/59/EU; (v) any restrictions on the free transferability of the securities; (vi) where applicable, the dividend or payout policy; (b) under a sub-section entitled ‘Where will the securities be traded?’, an indication as to whether the securities are or will be subject to an application for admission to trading on a regulated market or for trading on an MTF and the identity of all the markets where the securities are or are to be traded; where there is a guarantee attached to the securities, under a sub-section entitled ‘Is there a guarantee attached to the securities?’, the following information: (i) a brief description of the nature and scope of the guarantee; (ii) a brief description of the guarantor, including its LEI; (iii) the relevant key financial information for the purpose of assessing the guarantor’s ability to fulfil its commitments under the guarantee; and (iv) a brief description of the most material risk factors pertaining to the guarantor contained in the prospectus in accordance with Article 16(3), while not exceeding the total number of risk factors set out in paragraph 10; (d) under a sub-section entitled ‘What are the key risks that are specific to the securities?’, a brief description of the most material risk factors specific to the securities contained in the prospectus, while not exceeding the total number of risk factors set out in paragraph 10. Where, in accordance with the third subparagraph of Article 8(9), a single summary covers several securities which differ only in some very limited details, such as the issue price or maturity date, the maximum length set out in paragraph 3 shall be extended by two additional sides of A4-sized paper. However, in the event that a key information document is required to be prepared for those securities under Regulation (EU) No 1286/2014 and the issuer, the offeror or the person asking for admission to trading on a regulated market proceeds with the substitution of content referred to in the second subparagraph of this paragraph, the maximum length shall be extended by three additional sides of A4-sized paper for each additional security. Where the summary contains the information referred to in point (c) of the first subparagraph, the maximum length set out in paragraph 3 shall be extended by one additional side of A4-sized paper. 8. The section referred to in point (d) of paragraph 4 shall contain the following information: (a) under a sub-section entitled ‘Under which conditions and timetable can I invest in this security?’, where applicable, the general terms, conditions and expected timetable of the offer, the details of the admission to trading on a regulated market, the plan for distribution, the amount and percentage of immediate dilution resulting from the offer and an estimate of the total expenses of the issue and/or offer, including estimated expenses charged to the investor by the issuer or the offeror; (b) if different from the issuer, under a sub-section entitled ‘Who is the offeror and/or the person asking for admission to trading?’, a brief description of the offeror of the securities and/or the person asking for admission to trading on a regulated market, including its domicile and legal form, the law under which it operates and its country of incorporation; under a sub-section entitled ‘Why is this prospectus being produced?’, a brief description of the reasons for the offer or for the admission to trading on a regulated market, as well as, where applicable: (i) the use and estimated net amount of the proceeds; (ii) an indication of whether the offer is subject to an underwriting agreement on a firm commitment basis, stating any portion not covered; (iii) an indication of the most material conflicts of interest pertaining to the offer or the admission to trading. 9. Under each of the sections described in paragraphs 6, 7 and 8, the issuer may add sub-headings where deemed necessary. 10. The total number of risk factors included in the sections of the summary referred to in point (c) of paragraph 6 and point (c)(iv) and point (d) of the first subparagraph of paragraph 7 shall not exceed 15. 11. The summary shall not contain cross-references to other parts of the prospectus or incorporate information by reference. 12. Where a key information document is required to be prepared for securities offered to the public under Regulation (EU) No 1286/2014 and a home Member State requires the issuer, the offeror or the person asking for admission to trading on a regulated market to substitute the content of the key information document in accordance with the second sentence of the second subparagraph of paragraph 7 of this Article, the persons advising on or selling the securities on behalf of the issuer, the offeror or the person asking for admission to trading on a regulated market shall be deemed to have fulfilled, during the offer period, the obligation to provide the key information document in accordance with Article 13 of Regulation (EU) No 1286/2014, provided that they instead provide the investors concerned with the summary of the prospectus under the timing and conditions set out in Articles 13 and 14 of that Regulation. 13. ESMA shall develop draft regulatory technical standards to specify the content and format of presentation of the key financial information referred to in point (b) of paragraph 6, and the relevant key financial information referred to in point (c)(iii) of paragraph 7, taking into account the various types of securities and issuers and ensuring that the information produced is concise and understandable. ESMA shall submit those draft regulatory technical standards to the Commission by 21 July 2018. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 8 The base prospectus
1. For non-equity securities, including warrants in any form, the prospectus may, at the choice of the issuer, offeror or person asking for the admission to trading on a regulated market, consist of a base prospectus containing the necessary information concerning the issuer and the securities offered to the public or to be admitted to trading on a regulated market. 2. A base prospectus shall include the following information: (a) a template, entitled ‘form of the final terms’, to be filled out for each individual issue and indicating the available options with regard to the information to be determined in the final terms of the offer; (b) the address of the website where the final terms will be published. 3. Where a base prospectus contains options with regard to the information required by the relevant securities note, the final terms shall determine which of the options is applicable to the individual issue by referring to the relevant sections of the base prospectus or by replicating such information. 4. The final terms shall be presented in the form of a separate document or shall be included in the base prospectus or in any supplement thereto. The final terms shall be prepared in an easily analysable and comprehensible form. The final terms shall only contain information that relates to the securities note and shall not be used to supplement the base prospectus. Point (b) of Article 17(1) shall apply in such cases. 5. Where the final terms are neither included in the base prospectus, nor in a supplement, the issuer shall make them available to the public in accordance with the arrangements set out in Article 21 and file them with the competent authority of the home Member State, as soon as practicable upon offering securities to the public and, where possible, before the beginning of the offer of securities to the public or admission to trading on a regulated market. A clear and prominent statement shall be inserted in the final terms indicating: (a) that the final terms have been prepared for the purpose of this Regulation and must be read in conjunction with the base prospectus and any supplement thereto in order to obtain all the relevant information; (b) where the base prospectus and any supplement thereto are published in accordance with the arrangements set out in Article 21; (c) that a summary of the individual issue is annexed to the final terms. 6. A base prospectus may be drawn up as a single document or as separate documents. Where the issuer, the offeror or the person asking for admission to trading on a regulated market has filed a registration document for non-equity securities, or a universal registration document in accordance with Article 9, and chooses to draw up a base prospectus, the base prospectus shall consist of the following: (a) the information contained in the registration document, or in the universal registration document; (b) the information which would otherwise be contained in the relevant securities note, with the exception of the final terms where the final terms are not included in the base prospectus. 7. The specific information on each of the different securities included in a base prospectus shall be clearly segregated. 8. A summary shall only be drawn up once the final terms are included in the base prospectus, or in a supplement, or are filed, and that summary shall be specific to the individual issue. 9. The summary of the individual issue shall be subject to the same requirements as the final terms, as set out in this Article, and shall be annexed to them. The summary of the individual issue shall comply with Article 7 and shall provide the following: (a) the key information in the base prospectus, including the key information on the issuer; (b) the key information in the appropriate final terms, including the key information which was not included in the base prospectus. Where the final terms relate to several securities which differ only in some very limited details, such as the issue price or maturity date, a single summary of the individual issue may be attached for all those securities, provided the information referring to the different securities is clearly segregated. 10. The information contained in the base prospectus shall, where necessary, be supplemented in accordance with Article 23. 11. An offer of securities to the public may continue after the expiration of the base prospectus under which it was commenced provided that a succeeding base prospectus is approved and published no later than the last day of validity of the previous base prospectus. The final terms of such an offer shall contain a prominent warning on their first page indicating the last day of validity of the previous base prospectus and where the succeeding base prospectus will be published. The succeeding base prospectus shall include or incorporate by reference the form of the final terms from the initial base prospectus and refer to the final terms that are relevant for the continuing offer. A right of withdrawal pursuant to Article 23(2) shall also apply to investors who have agreed to purchase or subscribe for the securities during the validity period of the previous base prospectus, unless the securities have already been delivered to them.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 8 ):
The base prospectus 1. For non-equity securities, including warrants in any form, the prospectus may, at the choice of the issuer, offeror or person asking for the admission to trading on a regulated market, consist of a base prospectus containing the necessary information concerning the issuer and the securities offered to the public or to be admitted to trading on a regulated market. 2. A base prospectus shall include the following information: (a) a template, entitled ‘form of the final terms’, to be filled out for each individual issue and indicating the available options with regard to the information to be determined in the final terms of the offer; (b) the address of the website where the final terms will be published. 3. Where a base prospectus contains options with regard to the information required by the relevant securities note, the final terms shall determine which of the options is applicable to the individual issue by referring to the relevant sections of the base prospectus or by replicating such information. 4. The final terms shall be presented in the form of a separate document or shall be included in the base prospectus or in any supplement thereto. The final terms shall be prepared in an easily analysable and comprehensible form. The final terms shall only contain information that relates to the securities note and shall not be used to supplement the base prospectus. Point (b) of Article 17(1) shall apply in such cases. 5. Where the final terms are neither included in the base prospectus, nor in a supplement, the issuer shall make them available to the public in accordance with the arrangements set out in Article 21 and file them with the competent authority of the home Member State, as soon as practicable upon offering securities to the public and, where possible, before the beginning of the offer of securities to the public or admission to trading on a regulated market. A clear and prominent statement shall be inserted in the final terms indicating: (a) that the final terms have been prepared for the purpose of this Regulation and must be read in conjunction with the base prospectus and any supplement thereto in order to obtain all the relevant information; (b) where the base prospectus and any supplement thereto are published in accordance with the arrangements set out in Article 21; (c) that a summary of the individual issue is annexed to the final terms. 6. A base prospectus may be drawn up as a single document or as separate documents. Where the issuer, the offeror or the person asking for admission to trading on a regulated market has filed a registration document for non-equity securities, or a universal registration document in accordance with Article 9, and chooses to draw up a base prospectus, the base prospectus shall consist of the following: (a) the information contained in the registration document, or in the universal registration document; (b) the information which would otherwise be contained in the relevant securities note, with the exception of the final terms where the final terms are not included in the base prospectus. 7. The specific information on each of the different securities included in a base prospectus shall be clearly segregated. 8. A summary shall only be drawn up once the final terms are included in the base prospectus, or in a supplement, or are filed, and that summary shall be specific to the individual issue. 9. The summary of the individual issue shall be subject to the same requirements as the final terms, as set out in this Article, and shall be annexed to them. The summary of the individual issue shall comply with Article 7 and shall provide the following: (a) the key information in the base prospectus, including the key information on the issuer; (b) the key information in the appropriate final terms, including the key information which was not included in the base prospectus. Where the final terms relate to several securities which differ only in some very limited details, such as the issue price or maturity date, a single summary of the individual issue may be attached for all those securities, provided the information referring to the different securities is clearly segregated. 10. The information contained in the base prospectus shall, where necessary, be supplemented in accordance with Article 23. 11. An offer of securities to the public may continue after the expiration of the base prospectus under which it was commenced provided that a succeeding base prospectus is approved and published no later than the last day of validity of the previous base prospectus. The final terms of such an offer shall contain a prominent warning on their first page indicating the last day of validity of the previous base prospectus and where the succeeding base prospectus will be published. The succeeding base prospectus shall include or incorporate by reference the form of the final terms from the initial base prospectus and refer to the final terms that are relevant for the continuing offer. A right of withdrawal pursuant to Article 23(2) shall also apply to investors who have agreed to purchase or subscribe for the securities during the validity period of the previous base prospectus, unless the securities have already been delivered to them.
Article 9 The universal registration document
1. Any issuer whose securities are admitted to trading on a regulated market or an MTF may draw up every financial year a registration document in the form of a universal registration document describing the company’s organisation, business, financial position, earnings and prospects, governance and shareholding structure. 2. Any issuer that chooses to draw up a universal registration document every financial year shall submit it for approval to the competent authority of its home Member State in accordance with the procedure set out in Article 20(2) and (4). After the issuer has had a universal registration document approved by the competent authority for two consecutive financial years, subsequent universal registration documents may be filed with the competent authority without prior approval. Where the issuer thereafter fails to file a universal registration document for one financial year, the benefit of filing without prior approval shall be lost and all subsequent universal registration documents shall be submitted to the competent authority for approval until the condition set out in the second subparagraph is met again. The issuer shall indicate in its application to the competent authority whether the universal registration document is submitted for approval or filed without prior approval. Where the issuer referred to in the second subparagraph of this paragraph requests the notification of its universal registration document pursuant to Article 26, it shall submit its universal registration document for approval, including any amendments thereto which were previously filed. 3. Issuers which, prior to 21 July 2019, have had a registration document, drawn up in accordance with Annex I to Commission Regulation (EC) No 809/2004 ( 21 ) , approved by a competent authority for at least two consecutive financial years and have thereafter filed, in accordance with Article 12(3) of Directive 2003/71/EC, or got approved such a registration document every year, shall be allowed to file a universal registration document without prior approval in accordance with the second subparagraph of paragraph 2 of this Article from 21 July 2019. 4. Once approved or filed without prior approval, the universal registration document, as well as the amendments thereto referred to in paragraphs 7 and 9 of this Article, shall be made available to the public without undue delay, in accordance with the arrangements set out in Article 21. 5. The universal registration document shall comply with the language requirements laid down in Article 27. 6. Information may be incorporated by reference into a universal registration document under the conditions set out in Article 19. 7. Following the filing or approval of a universal registration document, the issuer may at any time update the information it contains by filing an amendment thereto with the competent authority. Subject to the first and second subparagraphs of Article 10(3), the filing of the amendment with the competent authority shall not require approval. 8. The competent authority may at any time review the content of any universal registration document which has been filed without prior approval, as well as the content of any amendments thereto. The review by the competent authority shall consist in scrutinising the completeness, the consistency and the comprehensibility of the information given in the universal registration document and any amendments thereto. 9. Where the competent authority, in the course of the review, finds that the universal registration document does not meet the standards of completeness, comprehensibility and consistency, or that amendments or supplementary information are needed, it shall notify it to the issuer. A request for amendment or supplementary information addressed by the competent authority to the issuer needs only be taken into account by the issuer in the next universal registration document filed for the following financial year, except where the issuer wishes to use the universal registration document as a constituent part of a prospectus submitted for approval. In that case, the issuer shall file an amendment to the universal registration document at the latest upon submission of the application referred to in Article 20(6). By way of derogation from the second subparagraph, where the competent authority notifies the issuer that its request for amendment or supplementary information concerns a material omission or a material mistake or material inaccuracy, which is likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer, the issuer shall file an amendment to the universal registration document without undue delay. The competent authority may request that the issuer produces a consolidated version of the amended universal registration document, where such a consolidated version is necessary to ensure comprehensibility of the information provided in that document. An issuer may voluntarily include a consolidated version of its amended universal registration document in an annex to the amendment. 10. Paragraphs 7 and 9 shall only apply where the universal registration document is not in use as a constituent part of a prospectus. Whenever a universal registration document is in use as a constituent part of a prospectus, only Article 23 on supplementing the prospectus shall apply between the time when the prospectus is approved and the final closing of the offer of securities to the public or, as the case may be, the time when trading on a regulated market begins, whichever occurs later. 11. An issuer fulfilling the conditions set out in the first or second subparagraph of paragraph 2 or in paragraph 3 of this Article shall have the status of frequent issuer and shall benefit from the faster approval process in accordance with Article 20(6), provided that: (a) upon the filing or submission for approval of each universal registration document, the issuer provides written confirmation to the competent authority that, to the best of its knowledge, all regulated information which it was required to disclose under Directive 2004/109/EC, if applicable, and under Regulation (EU) No 596/2014 has been filed and published in accordance with those acts over the last 18 months or over the period since the obligation to disclose regulated information commenced, whichever is the shorter; and (b) where the competent authority has undertaken a review as referred to in paragraph 8, the issuer has amended its universal registration document in accordance with paragraph 9. Where any of the above conditions is not fulfilled by the issuer, the status of frequent issuer shall be lost. 12. Where the universal registration document filed with or approved by the competent authority is made public at the latest four months after the end of the financial year, and contains the information required to be disclosed in the annual financial report referred to in Article 4 of Directive 2004/109/EC, the issuer shall be deemed to have fulfilled its obligation to publish the annual financial report required under that Article. Where the universal registration document, or an amendment thereto, is filed or approved by the competent authority and made public at the latest three months after the end of the first six months of the financial year, and contains the information required to be disclosed in the half-yearly financial report referred to in Article 5 of Directive 2004/109/EC, the issuer shall be deemed to have fulfilled its obligation to publish the half-yearly financial report required under that Article. In the cases referred to in the first and second subparagraph, the issuer: (a) shall include in the universal registration document a cross reference list identifying where each item required in the annual and half-yearly financial reports can be found in the universal registration document; (b) shall file the universal registration document in accordance with Article 19(1) of Directive 2004/109/EC and make it available to the officially appointed mechanism referred to in Article 21(2) of that Directive; (c) shall include in the universal registration document a responsibility statement using the terms required under point (c) of Article 4(2) and point (c) of Article 5(2) of Directive 2004/109/EC. 13. Paragraph 12 shall only apply where the home Member State of the issuer for the purposes of this Regulation is also the home Member State for the purposes of Directive 2004/109/EC, and where the language of the universal registration document fulfils the conditions set out in Article 20 of that Directive. 14. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying the criteria for the scrutiny and review of the universal registration document and any amendments thereto, and the procedures for the approval and filing of those documents as well as the conditions under which the status of frequent issuer is lost.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Broadening access to market-based sources of financing for European companies at each stage of their development is at the heart of the Capital Markets Union (CMU). Since the launch of the Capital Markets Union Action Plan, the EU has made considerable progress to increase the sources of funding as firms gradually scale up, and make market-based finance more widely available across the EU. New rules are already in place to boost EU venture capital funds’ (EuVECA) investment in start-ups and medium-sized companies. Together with the European Investment Fund, the Commission has also launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe. New rules on prospectuses have already been adopted to support companies raising money on public markets for equity and debt. For small companies and mid-caps wishing to raise money across the EU, a new EU growth prospectus is being created. In addition, to increase access to finance for start-ups and entrepreneurs, the Commission has proposed a European label for investment-based and lending-based crowdfunding platforms ('European Crowdfunding Service Providers for Business'). However, more needs to be done to develop a more conducive regulatory framework supporting access to public funding for Small and Mid-sized Enterprises ( SMEs). This should be achieved in particular by promoting the SME Growth Market label created by the Markets in Financial Instrument Directive II (MiFID II) 1 and striking the right balance between investor protection and market integrity on the one hand, and avoiding unnecessary administrative burdens on the other. In the Mid-term Review of the Capital Markets Union Action Plan 2 of June 2017, the Commission strengthened the focus on SME access to public markets. In this context, the Commission committed to publishing 'an impact assessment that will explore whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets' . Newly listed Small and Mid-sized Enterprises (SMEs) are a key motor of investment and job creation. Recently listed companies often outstrip privately-owned companies in terms of annual growth and workforce increase. Listed companies are less dependent on bank financing and benefit from a more diversified investment-base, easier access to additional equity capital and debt finance (through secondary offers), and a higher public profile and brand recognition. However, despite the benefits, EU public markets for SMEs are struggling to attract new issuers. The number of Initial Public Offerings on SME-dedicated markets steeply declined in the European Union in the wake of the crisis, and did not significantly pick up since. As a result, Europe is producing only half of the SME Initial Public Offerings that it generated before the financial crisis (478 Initial Public Offerings on average per year in 2006-2007 vs. 218 between 2009 and 2017 on EU SME MTFs). Between 2006 and 2007, an average of EUR 13.8 billion was raised annually on European SME-dedicated MTFs through Initial Public Offerings. This amount fell to EUR 2.55 billion on average from 2009 to 2017. There are many factors driving SMEs' decision to go public and investors' decision to invest in SME financial instruments. The impact assessment 3 shows that public markets for SMEs face two groups of regulatory challenges: (i) on the supply side, issuers face high compliance costs to list on public markets; (ii) on the demand side, insufficient liquidity can weigh on issuers (due to higher costs of capital), on investors (that can be reluctant to invest in SME in the first place due to low liquidity levels and related volatility risks) and on market intermediaries (whose business models rely on customers order flow in liquid markets). Scope of the initiative: SME Growth Markets This initiative is strictly confined to SME Growth Markets 4 and companies listed on those trading venues. SME Growth Markets are a new category of multilateral trading venues (MTFs) that were introduced by the Markets in Financial Instruments Directive II in January 2018. When assessing whether SME issuers admitted to trading on regulated markets should benefit from equivalent regulatory alleviations, the decision was made to limit the beneficiaries of the relief to issuers admitted to trading on SME Growth Markets. Requirements imposed on regulated market issuers should apply in a similar way regardless of the size of the company. Different requirements for SMEs compared to large caps are likely to confuse stakeholders (in particular investors). Current regulatory context Companies listed on an SME Growth Market are required to comply with some EU rules, especially the Market Abuse Regulation 5 (MAR) and the Prospectus Regulation 6 . Since its entry into application on 1 July 2016, the Market Abuse Regulation has been extended to MTFs, including SME Growth Markets. This regulation aims to increase market integrity and investor confidence. It prohibits from: (i) engaging or attempting to engage in insider dealing; (ii) recommending that another person engage in insider dealing or induce another person to engage in insider dealing; (iii) unlawfully disclosing inside information 7 ; or (iv) engaging in or attempting to engage in market manipulation. Issuers are also subject to several disclosure and record-keeping obligations under the regulation. In particular, concerned issuers are under a general obligation to disclose inside information to the public as soon as possible. By strengthening market integrity and by extending the market abuse regime to MTFs, the Market Abuse Regulation was crucial in restoring investor confidence in financial markets. However, this piece of legislation is a 'one-size-fits-all' regulation. Almost all its requirements apply in the same manner to all issuers irrespective of their size or the trading venues where their financial instruments are admitted to trading. The regulation contains only two limited adaptations to issuers listed on SME Growth Markets. The first allows trading venues operating an SME Growth Market to post inside information on the trading venue's website (instead of the issuer's website). The second allows issuers listed on SME Growth Markets to produce insider lists only upon request from a national competent authority (NCA). However, the effect of this alleviation is limited because companies are still required to gather and store all relevant information to be able to produce insider lists on request. A prospectus is a legally required document presenting information about a company when securities are offered to the public or admitted to trading on a regulated market. Under the CMU Action Plan, the European Union has already made it easier and cheaper for smaller companies to access public markets, notably with the creation of the alleviated 'EU Growth Prospectus' in the revised Prospectus Regulation. An issuer may seek an admission to trading on a regulated market after having floated its shares on an SME Growth Market for a few years. It may do so to benefit from greater liquidity and a larger investor pool. However, if that issuer wants to transfer its shares from an SME Growth Market to a regulated market, it needs to produce a full prospectus as no alleviated prospectus schedule is available for companies in such a situation. The take-up of the SME Growth Market 'brand' is constrained by the limited number of alleviations currently envisaged in EU legislation for the issuers listed on this new type of trading venues. The overall objectives of this initiative is therefore to introduce technical adjustments to the EU rulebook in order to: (i) reduce the administrative burden and the regulatory compliance costs faced by SMEs when their financial instruments are admitted to trading on an SME Growth Market, while ensuring a high level of investor protection and market integrity; and (ii) increase the liquidity of equity instruments listed on SME Growth Markets. These targeted regulatory changes foreseen in this proposal will not fully revive access to public markets for SMEs on their own. Nevertheless, they address regulatory barriers flagged by various stakeholders as inhibiting capital-raising by SMEs on public markets. They do so whilst preserving the highest standards of investor protection and market integrity . Any changes should therefore be understood as a first step in the right direction, and not as a single remedy in itself. Besides, this proposal for a Regulation is not an overhaul of the Market Abuse Regulation (which has been into application for less than two years) or the Prospectus Regulation (which has been recently agreed by the co-legislators and which will enter into application as of July 2019). This proposal (together with the modifications envisaged in the Commission Delegated Regulation (EU) 2017/565) only brings technical amendments to make the EU legal framework applying to listed SMEs more proportionate. It will ensure that the 'SME Growth Market' label, created by MiFID II as of January 2018, is used by the various MTFs with a focus on SMEs across the EU. 
Revised version (Article 9 ):
The universal registration document 1. Any issuer whose securities are admitted to trading on a regulated market or an MTF may draw up every financial year a registration document in the form of a universal registration document describing the company’s organisation, business, financial position, earnings and prospects, governance and shareholding structure. 2. Any issuer that chooses to draw up a universal registration document every financial year shall submit it for approval to the competent authority of its home Member State in accordance with the procedure set out in Article 20(2) and (4). After the issuer has had a universal registration document approved by the competent authority for two consecutive financial years, subsequent universal registration documents may be filed with the competent authority without prior approval. Where the issuer thereafter fails to file a universal registration document for one financial year, the benefit of filing without prior approval shall be lost and all subsequent universal registration documents shall be submitted to the competent authority for approval until the condition set out in the second subparagraph is met again. The issuer shall indicate in its application to the competent authority whether the universal registration document is submitted for approval or filed without prior approval. Where the issuer referred to in the second subparagraph of this paragraph requests the notification of its universal registration document pursuant to Article 26, it shall submit its universal registration document for approval, including any amendments thereto which were previously filed. 3. Issuers which, prior to 21 July 2019, have had a registration document, drawn up in accordance with Annex I to Commission Regulation (EC) No 809/2004 ( 7 ), approved by a competent authority for at least two consecutive financial years and have thereafter filed, in accordance with Article 12(3) of Directive 2003/71/EC, or got approved such a registration document every year, shall be allowed to file a universal registration document without prior approval in accordance with the second subparagraph of paragraph 2 of this Article from 21 July 2019. 4. Once approved or filed without prior approval, the universal registration document, as well as the amendments thereto referred to in paragraphs 7 and 9 of this Article, shall be made available to the public without undue delay, in accordance with the arrangements set out in Article 21. 5. The universal registration document shall comply with the language requirements laid down in Article 27. 6. Information may be incorporated by reference into a universal registration document under the conditions set out in Article 19. 7. Following the filing or approval of a universal registration document, the issuer may at any time update the information it contains by filing an amendment thereto with the competent authority. Subject to the first and second subparagraphs of Article 10(3), the filing of the amendment with the competent authority shall not require approval. 8. The competent authority may at any time review the content of any universal registration document which has been filed without prior approval, as well as the content of any amendments thereto. The review by the competent authority shall consist in scrutinising the completeness, the consistency and the comprehensibility of the information given in the universal registration document and any amendments thereto. 9. Where the competent authority, in the course of the review, finds that the universal registration document does not meet the standards of completeness, comprehensibility and consistency, or that amendments or supplementary information are needed, it shall notify it to the issuer. A request for amendment or supplementary information addressed by the competent authority to the issuer needs only be taken into account by the issuer in the next universal registration document filed for the following financial year, except where the issuer wishes to use the universal registration document as a constituent part of a prospectus submitted for approval. In that case, the issuer shall file an amendment to the universal registration document at the latest upon submission of the application referred to in Article 20(6). By way of derogation from the second subparagraph, where the competent authority notifies the issuer that its request for amendment or supplementary information concerns a material omission or a material mistake or material inaccuracy, which is likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer, the issuer shall file an amendment to the universal registration document without undue delay. The competent authority may request that the issuer produces a consolidated version of the amended universal registration document, where such a consolidated version is necessary to ensure comprehensibility of the information provided in that document. An issuer may voluntarily include a consolidated version of its amended universal registration document in an annex to the amendment. 10. Paragraphs 7 and 9 shall only apply where the universal registration document is not in use as a constituent part of a prospectus. Whenever a universal registration document is in use as a constituent part of a prospectus, only Article 23 on supplementing the prospectus shall apply between the time when the prospectus is approved and the final closing of the offer of securities to the public or, as the case may be, the time when trading on a regulated market begins, whichever occurs later. 11. An issuer fulfilling the conditions set out in the first or second subparagraph of paragraph 2 or in paragraph 3 of this Article shall have the status of frequent issuer and shall benefit from the faster approval process in accordance with Article 20(6), provided that: (a) upon the filing or submission for approval of each universal registration document, the issuer provides written confirmation to the competent authority that, to the best of its knowledge, all regulated information which it was required to disclose under Directive 2004/109/EC, if applicable, and under Regulation (EU) No 596/2014 has been filed and published in accordance with those acts over the last 18 months or over the period since the obligation to disclose regulated information commenced, whichever is the shorter; and (b) where the competent authority has undertaken a review as referred to in paragraph 8, the issuer has amended its universal registration document in accordance with paragraph 9. Where any of the above conditions is not fulfilled by the issuer, the status of frequent issuer shall be lost. 12. Where the universal registration document filed with or approved by the competent authority is made public at the latest four months after the end of the financial year, and contains the information required to be disclosed in the annual financial report referred to in Article 4 of Directive 2004/109/EC, the issuer shall be deemed to have fulfilled its obligation to publish the annual financial report required under that Article. Where the universal registration document, or an amendment thereto, is filed or approved by the competent authority and made public at the latest three months after the end of the first six months of the financial year, and contains the information required to be disclosed in the half-yearly financial report referred to in Article 5 of Directive 2004/109/EC, the issuer shall be deemed to have fulfilled its obligation to publish the half-yearly financial report required under that Article. In the cases referred to in the first and second subparagraph, the issuer: (a) shall include in the universal registration document a cross reference list identifying where each item required in the annual and half-yearly financial reports can be found in the universal registration document; shall file the universal registration document in accordance with Article 19(1) of Directive 2004/109/EC and make it available to the officially appointed mechanism referred to in Article 21(2) of that Directive; (c) shall include in the universal registration document a responsibility statement using the terms required under point (c) of Article 4(2) and point (c) of Article 5(2) of Directive 2004/109/EC. 13. Paragraph 12 shall only apply where the home Member State of the issuer for the purposes of this Regulation is also the home Member State for the purposes of Directive 2004/109/EC, and where the language of the universal registration document fulfils the conditions set out in Article 20 of that Directive. 14. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying the criteria for the scrutiny and review of the universal registration document and any amendments thereto, and the procedures for the approval and filing of those documents as well as the conditions under which the status of frequent issuer is lost.