Article 10 Prospectuses consisting of separate documents
1. An issuer that has already had a registration document approved by a competent authority shall be required to draw up only the securities note and the summary, where applicable, when securities are offered to the public or admitted to trading on a regulated market. In that case, the securities note and the summary shall be subject to a separate approval. Where, since the approval of the registration document, there has been a significant new factor, material mistake or material inaccuracy relating to the information included in the registration document which is capable of affecting the assessment of the securities, a supplement to the registration document shall be submitted for approval, at the latest at the same time as the securities note and the summary. The right to withdraw acceptances in accordance with Article 23(2) shall not apply in that case. The registration document and its supplement, where applicable, accompanied by the securities note and the summary shall constitute a prospectus, once approved by the competent authority. 2. Once approved, the registration document shall be made available to the public without undue delay and in accordance with the arrangements set out in Article 21. 3. An issuer that has already had a universal registration document approved by the competent authority, or that has filed a universal registration document without prior approval pursuant to the second subparagraph of Article 9(2), shall be required to draw up only the securities note and the summary when securities are offered to the public or admitted to trading on a regulated market. Where the universal registration document has already been approved, the securities note, the summary and all amendments to the universal registration document filed since the approval of the universal registration document shall be subject to a separate approval. Where an issuer has filed a universal registration document without prior approval, the entire documentation, including amendments to the universal registration document, shall be subject to approval, notwithstanding the fact that those documents remain separate. The universal registration document, amended in accordance with Article 9(7) or (9), accompanied by the securities note and the summary shall constitute a prospectus, once approved by the 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 10 ):
Prospectuses consisting of separate documents 1. An issuer that has already had a registration document approved by a competent authority shall be required to draw up only the securities note and the summary, where applicable, when securities are offered to the public or admitted to trading on a regulated market. In that case, the securities note and the summary shall be subject to a separate approval. Where, since the approval of the registration document, there has been a significant new factor, material mistake or material inaccuracy relating to the information included in the registration document which is capable of affecting the assessment of the securities, a supplement to the registration document shall be submitted for approval, at the latest at the same time as the securities note and the summary. The right to withdraw acceptances in accordance with Article 23(2) shall not apply in that case. The registration document and its supplement, where applicable, accompanied by the securities note and the summary shall constitute a prospectus, once approved by the competent authority. 2. Once approved, the registration document shall be made available to the public without undue delay and in accordance with the arrangements set out in Article 21. 3. An issuer that has already had a universal registration document approved by the competent authority, or that has filed a universal registration document without prior approval pursuant to the second subparagraph of Article 9(2), shall be required to draw up only the securities note and the summary when securities are offered to the public or admitted to trading on a regulated market. Where the universal registration document has already been approved, the securities note, the summary and all amendments to the universal registration document filed since the approval of the universal registration document shall be subject to a separate approval. Where an issuer has filed a universal registration document without prior approval, the entire documentation, including amendments to the universal registration document, shall be subject to approval, notwithstanding the fact that those documents remain separate. The universal registration document, amended in accordance with Article 9(7) or (9), accompanied by the securities note and the summary shall constitute a prospectus, once approved by the competent authority.
Article 11 Responsibility attaching to the prospectus
1. Member States shall ensure that responsibility for the information given in a prospectus, and any supplement thereto, attaches to at least the issuer or its administrative, management or supervisory bodies, the offeror, the person asking for the admission to trading on a regulated market or the guarantor, as the case may be. The persons responsible for the prospectus, and any supplement thereto, shall be clearly identified in the prospectus by their names and functions or, in the case of legal persons, their names and registered offices, as well as declarations by them that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import. 2. Member States shall ensure that their laws, regulations and administrative provisions on civil liability apply to those persons responsible for the information given in a prospectus. However, Member States shall ensure that no civil liability shall attach to any person solely on the basis of the summary pursuant to Article 7 or the specific summary of an EU Growth prospectus pursuant to the second subparagraph of Article 15(1), including any translation thereof, unless: (a) it is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus; or (b) 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 the securities. 3. The responsibility for the information given in a registration document or in a universal registration document shall attach to the persons referred to in paragraph 1 only in cases where the registration document or the universal registration document is in use as a constituent part of an approved prospectus. The first subparagraph shall apply without prejudice to Articles 4 and 5 of Directive 2004/109/EC where the information under those Articles is included in a universal registration document.
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 11 ):
Responsibility attaching to the prospectus 1. Member States shall ensure that responsibility for the information given in a prospectus, and any supplement thereto, attaches to at least the issuer or its administrative, management or supervisory bodies, the offeror, the person asking for the admission to trading on a regulated market or the guarantor, as the case may be. The persons responsible for the prospectus, and any supplement thereto, shall be clearly identified in the prospectus by their names and functions or, in the case of legal persons, their names and registered offices, as well as declarations by them that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import. 2. Member States shall ensure that their laws, regulations and administrative provisions on civil liability apply to those persons responsible for the information given in a prospectus. However, Member States shall ensure that no civil liability shall attach to any person solely on the basis of the summary pursuant to Article 7 or the specific summary of an EU Growth prospectus pursuant to the second subparagraph of Article 15(1), including any translation thereof, unless: (a) it is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus; or (b) 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 the securities. 3. The responsibility for the information given in a registration document or in a universal registration document shall attach to the persons referred to in paragraph 1 only in cases where the registration document or the universal registration document is in use as a constituent part of an approved prospectus. The first subparagraph shall apply without prejudice to Articles 4 and 5 of Directive 2004/109/EC where the information under those Articles is included in a universal registration document.
Article 12 Validity of a prospectus, registration document and universal registration document
1. A prospectus, whether a single document or consisting of separate documents, shall be valid for 12 months after its approval for offers to the public or admissions to trading on a regulated market, provided that it is completed by any supplement required pursuant to Article 23. Where a prospectus consists of separate documents, the period of validity shall begin upon approval of the securities note. 2. A registration document which has been previously approved shall be valid for use as a constituent part of a prospectus for 12 months after its approval. The end of the validity of such a registration document shall not affect the validity of a prospectus of which it is a constituent part. 3. A universal registration document shall be valid for use as a constituent part of a prospectus for 12 months after its approval as referred to in the first subparagraph of Article 9(2) or after its filing as referred to in the second subparagraph of Article 9(2). The end of the validity of such a universal registration document shall not affect the validity of a prospectus of which it is a constituent part.
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 12 ):
Validity of a prospectus, registration document and universal registration document 1. A prospectus, whether a single document or consisting of separate documents, shall be valid for 12 months after its approval for offers to the public or admissions to trading on a regulated market, provided that it is completed by any supplement required pursuant to Article 23. Where a prospectus consists of separate documents, the period of validity shall begin upon approval of the securities note. 2. A registration document which has been previously approved shall be valid for use as a constituent part of a prospectus for 12 months after its approval. The end of the validity of such a registration document shall not affect the validity of a prospectus of which it is a constituent part. 3. A universal registration document shall be valid for use as a constituent part of a prospectus for 12 months after its approval as referred to in the first subparagraph of Article 9(2) or after its filing as referred to in the second subparagraph of Article 9(2). The end of the validity of such a universal registration document shall not affect the validity of a prospectus of which it is a constituent part.
Article 13 Minimum information and format
1. The Commission shall adopt delegated acts in accordance with Article 44 to supplement this Regulation regarding the format of the prospectus, the base prospectus and the final terms, and the schedules defining the specific information to be included in a prospectus, including LEIs and ISINs, avoiding duplication of information when a prospectus is composed of separate documents. In particular, when setting out the various prospectus schedules, account shall be taken of the following: (a) the various types of information needed by investors relating to equity securities as compared with non-equity securities; a consistent approach shall be taken with regard to information required in a prospectus for securities which have a similar economic rationale, notably derivative securities; (b) the various types and characteristics of offers and admissions to trading on a regulated market of non-equity securities; (c) the format used and the information required in base prospectuses relating to non-equity securities, including warrants in any form; (d) where applicable, the public nature of the issuer; (e) where applicable, the specific nature of the activities of the issuer. For the purposes of point (b) of the second subparagraph, when setting out the various prospectus schedules, the Commission shall set out specific information requirements for prospectuses that relate to the admission to trading on a regulated market of non-equity securities which: (a) 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) have a denomination per unit of at least EUR 100 000. Those information requirements shall be appropriate, taking into account the information needs of the investors concerned. 2. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by setting out the schedule defining the minimum information to be included in the universal registration document. Such a schedule shall ensure that the universal registration document contains all the necessary information on the issuer so that the same universal registration document can be used equally for the subsequent offer to the public or admission to trading on a regulated market of equity or non-equity securities. With regard to the financial information, the operating and financial review and prospects and the corporate governance, such information shall be aligned as much as possible with the information required to be disclosed in the annual and half-yearly financial reports referred to in Articles 4 and 5 of Directive 2004/109/EC, including the management report and the corporate governance statement. 3. The delegated acts referred to in paragraphs 1 and 2 shall be based on the standards in the field of financial and non-financial information set out by international securities commission organisations, in particular by the International Organisation of Securities Commissions (IOSCO), and on Annexes I, II and III to 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 13 ):
Minimum information and format 1. The Commission shall adopt delegated acts in accordance with Article 44 to supplement this Regulation regarding the format of the prospectus, the base prospectus and the final terms, and the schedules defining the specific information to be included in a prospectus, including LEIs and ISINs, avoiding duplication of information when a prospectus is composed of separate documents. In particular, when setting out the various prospectus schedules, account shall be taken of the following: (a) the various types of information needed by investors relating to equity securities as compared with non-equity securities; a consistent approach shall be taken with regard to information required in a prospectus for securities which have a similar economic rationale, notably derivative securities; (b) the various types and characteristics of offers and admissions to trading on a regulated market of non-equity securities; (c) the format used and the information required in base prospectuses relating to non-equity securities, including warrants in any form; (d) where applicable, the public nature of the issuer; (e) where applicable, the specific nature of the activities of the issuer. For the purposes of point (b) of the second subparagraph, when setting out the various prospectus schedules, the Commission shall set out specific information requirements for prospectuses that relate to the admission to trading on a regulated market of non-equity securities which: (a) 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) have a denomination per unit of at least EUR 100 000 . Those information requirements shall be appropriate, taking into account the information needs of the investors concerned. 2. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by setting out the schedule defining the minimum information to be included in the universal registration document. Such a schedule shall ensure that the universal registration document contains all the necessary information on the issuer so that the same universal registration document can be used equally for the subsequent offer to the public or admission to trading on a regulated market of equity or non-equity securities. With regard to the financial information, the operating and financial review and prospects and the corporate governance, such information shall be aligned as much as possible with the information required to be disclosed in the annual and half-yearly financial reports referred to in Articles 4 and 5 of Directive 2004/109/EC, including the management report and the corporate governance statement. 3. The delegated acts referred to in paragraphs 1 and 2 shall be based on the standards in the field of financial and non-financial information set out by international securities commission organisations, in particular by the International Organisation of Securities Commissions (IOSCO), and on Annexes I, II and III to this Regulation.
Article 14 Simplified disclosure regime for secondary issuances
1. The following persons may choose to draw up a simplified prospectus under the simplified disclosure regime for secondary issuances, in the case of an offer of securities to the public or of an admission to trading of securities on a regulated market: (a) issuers whose securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue securities fungible with existing securities which have been previously issued; (b) issuers whose equity securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue non-equity securities; (c) offerors of securities admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months. The simplified prospectus shall consist of a summary in accordance with Article 7, a specific registration document which may be used by persons referred to in points (a), (b) and (c) of the first subparagraph of this paragraph and a specific securities note which may be used by persons referred to in points (a) and (c) of that subparagraph. 2. By way of derogation from Article 6(1), and without prejudice to Article 18(1), the simplified prospectus shall contain the relevant reduced information which is necessary to enable investors to understand: (a) the prospects of the issuer and the significant changes in the business and the financial position of the issuer and the guarantor that have occurred since the end of the last financial year, if any; (b) the rights attaching to the securities; (c) the reasons for the issuance and its impact on the issuer, including on its overall capital structure, and the use of the proceeds. The information contained in the simplified prospectus shall be written and presented in an easily analysable, concise and comprehensible form and shall enable investors to make an informed investment decision. It shall also take into account the regulated information that has already been disclosed to the public pursuant to Directive 2004/109/EC, where applicable, and Regulation (EU) No 596/2014. 3. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by setting out the schedules specifying the reduced information to be included under the simplified disclosure regime referred to in paragraph 1. The schedules shall include in particular: (a) the annual and half-yearly financial information published over the 12 months prior to the approval of the prospectus; (b) where applicable, profit forecasts and estimates; (c) a concise summary of the relevant information disclosed under Regulation (EU) No 596/2014 over the 12 months prior to the approval of the prospectus; (d) risk factors; (e) for equity securities, the working capital statement, the statement of capitalisation and indebtedness, a disclosure of relevant conflicts of interest and related-party transactions, major shareholders and, where applicable, pro forma financial information. When specifying the reduced information to be included under the simplified disclosure regime, the Commission shall take into account the need to facilitate fundraising on capital markets and the importance of reducing the cost of capital. In order to avoid imposing unnecessary burdens on issuers, when specifying the reduced information, the Commission shall also take into account the information which an issuer is already required to disclose under Directive 2004/109/EC, where applicable, and Regulation (EU) No 596/2014. The Commission shall also calibrate the reduced information so that it focusses on the information that is relevant for secondary issuances and is proportionate.
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 14 ):
Simplified disclosure regime for secondary issuances 1. The following persons may choose to draw up a simplified prospectus under the simplified disclosure regime for secondary issuances, in the case of an offer of securities to the public or of an admission to trading of securities on a regulated market: (a) issuers whose securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue securities fungible with existing securities which have been previously issued; (b) without prejudice to Article 1(5), issuers whose equity securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue non-equity securities or securities giving access to equity securities fungible with the existing equity securities of the issuer already admitted to trading; (c) offerors of securities admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months; (d) issuers whose securities have been offered to the public and admitted to trading on an SME growth market continuously for at least two years, and who have fully complied with reporting and disclosure obligations throughout the period of being admitted to trading, and who seek admission to trading on a regulated market of securities fungible with existing securities which have been previously issued. 2. By way of derogation from Article 6(1), and without prejudice to Article 18(1), the simplified prospectus shall contain the relevant reduced information which is necessary to enable investors to understand: (a) the prospects of the issuer and the significant changes in the business and the financial position of the issuer and the guarantor that have occurred since the end of the last financial year, if any; (b) the rights attaching to the securities; (c) the reasons for the issuance and its impact on the issuer, including on its overall capital structure, and the use of the proceeds. Those issuers referred to in point (d) of the first subparagraph of paragraph 1 of this Article that are not required to prepare consolidated accounts in line with Directive 2013/34/EU after their securities’ admission to trading on a regulated market shall compile the most recent financial information pursuant to point (a) of the second subparagraph of paragraph 3 of this Article, containing comparative information for the previous year included in the simplified prospectus, in accordance with the national law of the Member State in which the issuer is incorporated. 3. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by setting out the schedules specifying the reduced information to be included under the simplified disclosure regime referred to in paragraph 1. The schedules shall include in particular: (a) the annual and half-yearly financial information published over the 12 months prior to the approval of the prospectus; (b) where applicable, profit forecasts and estimates; (c) a concise summary of the relevant information disclosed under Regulation (EU) No 596/2014 over the 12 months prior to the approval of the prospectus; (d) risk factors; (e) for equity securities, including securities giving access to equity securities, the working capital statement, the statement of capitalisation and indebtedness, a disclosure of relevant conflicts of interest and related-party transactions, major shareholders and, where applicable, pro forma financial information. When specifying the reduced information to be included under the simplified disclosure regime, the Commission shall take into account the need to facilitate fundraising on capital markets and the importance of reducing the cost of capital. In order to avoid imposing unnecessary burdens on issuers, when specifying the reduced information, the Commission shall also take into account the information which an issuer is already required to disclose under Directive 2004/109/EC, where applicable, and Regulation (EU) No 596/2014. The Commission shall also calibrate the reduced information so that it focusses on the information that is relevant for secondary issuances and is proportionate.
Article 15 EU Growth prospectus
1. The following persons may choose to draw up an EU Growth prospectus under the proportionate disclosure regime set out in this Article in the case of an offer of securities to the public provided that they have no securities admitted to trading on a regulated market: (a) SMEs; (b) issuers, other than SMEs, whose securities are traded or are to be traded on an SME growth market, provided that those issuers had an average market capitalisation of less than EUR 500 000 000 on the basis of end-year quotes for the previous three calendar years; (c) issuers, other than those referred to in points (a) and (b), where the offer of securities to the public is of a total consideration in the Union that does not exceed EUR 20 000 000 calculated over a period of 12 months, and provided that such issuers have no securities traded on an MTF and have an average number of employees during the previous financial year of up to 499; (d) offerors of securities issued by issuers referred to in points (a) and (b). An EU Growth prospectus under the proportionate disclosure regime shall be a document of a standardised format, written in a simple language and which is easy for issuers to complete. It shall consist of a specific summary based on Article 7, a specific registration document and a specific securities note. The information in the EU Growth prospectus shall be presented in a standardised sequence in accordance with the delegated act referred to in paragraph 2. 2. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying the reduced content and the standardised format and sequence for the EU Growth prospectus, as well as the reduced content and the standardised format of the specific summary. The specific summary shall not impose any additional burdens or costs on issuers insofar as it shall only require the relevant information already included in the EU Growth prospectus. When specifying the standardised format of the specific summary, the Commission shall calibrate the requirements to ensure that it is shorter than the summary provided for in Article 7. When specifying the reduced content and standardised format and sequence of the EU Growth prospectus, the Commission shall calibrate the requirements to focus on: (a) the information that is material and relevant for investors when making an investment decision; (b) the need to ensure proportionality between the size of the company and the cost of producing a prospectus. In doing so, the Commission shall take into account the following: (a) the need to ensure that the EU Growth prospectus is significantly lighter than the standard prospectus, in terms of administrative burdens and costs to issuers; (b) the need to facilitate access to capital markets for SMEs and minimise costs for SMEs while ensuring investor confidence in investing in such companies; (c) the various types of information relating to equity and non-equity securities needed by investors. Those delegated acts shall be based on Annexes IV and V.
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 15 ):
EU Growth prospectus 1. The following persons may choose to draw up an EU Growth prospectus under the proportionate disclosure regime set out in this Article in the case of an offer of securities to the public provided that they have no securities admitted to trading on a regulated market: (a) SMEs; (b) issuers, other than SMEs, whose securities are traded or are to be traded on an SME growth market, provided that those issuers had an average market capitalisation of less than EUR 500 000 000 on the basis of end-year quotes for the previous three calendar years; issuers, other than those referred to in points (a) and (b), where the offer of securities to the public is of a total consideration in the Union that does not exceed EUR 20 000 000 calculated over a period of 12 months, and provided that such issuers have no securities traded on an MTF and have an average number of employees during the previous financial year of up to 499; issuers, other than SMEs, offering shares to the public at the same time as seeking admission of those shares to trading on an SME growth market, provided that such issuers have no shares already admitted to trading on an SME growth market and the combined value of the following two items is less than EUR 200 000 000 : offerors of securities issued by issuers referred to in points (a) and (b). An EU Growth prospectus under the proportionate disclosure regime shall be a document of a standardised format, written in a simple language and which is easy for issuers to complete. It shall consist of a specific summary based on Article 7, a specific registration document and a specific securities note. The information in the EU Growth prospectus shall be presented in a standardised sequence in accordance with the delegated act referred to in paragraph 2. 2. The Commission shall, by 21 January 2019, adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying the reduced content and the standardised format and sequence for the EU Growth prospectus, as well as the reduced content and the standardised format of the specific summary. The specific summary shall not impose any additional burdens or costs on issuers insofar as it shall only require the relevant information already included in the EU Growth prospectus. When specifying the standardised format of the specific summary, the Commission shall calibrate the requirements to ensure that it is shorter than the summary provided for in Article 7. When specifying the reduced content and standardised format and sequence of the EU Growth prospectus, the Commission shall calibrate the requirements to focus on: (a) the information that is material and relevant for investors when making an investment decision; (b) the need to ensure proportionality between the size of the company and the cost of producing a prospectus. In doing so, the Commission shall take into account the following: (a) the need to ensure that the EU Growth prospectus is significantly lighter than the standard prospectus, in terms of administrative burdens and costs to issuers; (b) the need to facilitate access to capital markets for SMEs and minimise costs for SMEs while ensuring investor confidence in investing in such companies; (c) the various types of information relating to equity and non-equity securities needed by investors. Those delegated acts shall be based on Annexes IV and V.
Article 16 Risk factors
1. The risk factors featured in a prospectus shall be limited to risks which are specific to the issuer and/or to the securities and which are material for taking an informed investment decision, as corroborated by the content of the registration document and the securities note. When drawing up the prospectus, the issuer, the offeror or the person asking for admission to trading on a regulated market shall assess the materiality of the risk factors based on the probability of their occurrence and the expected magnitude of their negative impact. Each risk factor shall be adequately described, explaining how it affects the issuer or the securities being offered or to be admitted to trading. The assessment of the materiality of the risk factors provided for in the second subparagraph may also be disclosed by using a qualitative scale of low, medium or high. The risk factors shall be presented in a limited number of categories depending on their nature. In each category the most material risk factors shall be mentioned first according to the assessment provided for in the second subparagraph. 2. Risk factors shall also include those resulting from the level of subordination of a security and the impact on the expected size or timing of payments to holders of the securities in the event of bankruptcy, or any other similar procedure, including, where relevant, the insolvency of a credit institution or its resolution or restructuring in accordance with Directive 2014/59/EU. 3. Where there is a guarantee attached to the securities, the prospectus shall contain the specific and material risk factors pertaining to the guarantor to the extent that they are relevant to the guarantor’s ability to fulfil its commitment under the guarantee. 4. In order to encourage appropriate and focused disclosure of risk factors, ESMA shall develop guidelines to assist competent authorities in their review of the specificity and materiality of risk factors and of the presentation of risk factors across categories depending on their nature. 5. The Commission is empowered to adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying criteria for the assessment of the specificity and materiality of risk factors and for the presentation of risk factors across categories depending on their nature.
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 16 ):
Risk factors 1. The risk factors featured in a prospectus shall be limited to risks which are specific to the issuer and/or to the securities and which are material for taking an informed investment decision, as corroborated by the content of the registration document and the securities note. When drawing up the prospectus, the issuer, the offeror or the person asking for admission to trading on a regulated market shall assess the materiality of the risk factors based on the probability of their occurrence and the expected magnitude of their negative impact. Each risk factor shall be adequately described, explaining how it affects the issuer or the securities being offered or to be admitted to trading. The assessment of the materiality of the risk factors provided for in the second subparagraph may also be disclosed by using a qualitative scale of low, medium or high. The risk factors shall be presented in a limited number of categories depending on their nature. In each category the most material risk factors shall be mentioned first according to the assessment provided for in the second subparagraph. 2. Risk factors shall also include those resulting from the level of subordination of a security and the impact on the expected size or timing of payments to holders of the securities in the event of bankruptcy, or any other similar procedure, including, where relevant, the insolvency of a credit institution or its resolution or restructuring in accordance with Directive 2014/59/EU. 3. Where there is a guarantee attached to the securities, the prospectus shall contain the specific and material risk factors pertaining to the guarantor to the extent that they are relevant to the guarantor’s ability to fulfil its commitment under the guarantee. 4. In order to encourage appropriate and focused disclosure of risk factors, ESMA shall develop guidelines to assist competent authorities in their review of the specificity and materiality of risk factors and of the presentation of risk factors across categories depending on their nature. 5. The Commission is empowered to adopt delegated acts in accordance with Article 44 to supplement this Regulation by specifying criteria for the assessment of the specificity and materiality of risk factors and for the presentation of risk factors across categories depending on their nature.
Article 17 Final offer price and amount of securities
1. Where the final offer price and/or amount of securities to be offered to the public, whether expressed in number of securities or as an aggregate nominal amount, cannot be included in the prospectus: (a) the acceptances of the purchase or subscription of securities may be withdrawn for not less than two working days after the final offer price and/or amount of securities to be offered to the public has been filed; or (b) the following shall be disclosed in the prospectus: (i) the maximum price and/or the maximum amount of securities, as far as they are available; or (ii) the valuation methods and criteria, and/or conditions, in accordance with which the final offer price is to be determined and an explanation of any valuation methods used. 2. The final offer price and amount of securities shall be filed with the competent authority of the home Member State and made available to the public in accordance with the arrangements set out in Article 21(2).
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 17 ):
Final offer price and amount of securities 1. Where the final offer price and/or amount of securities to be offered to the public, whether expressed in number of securities or as an aggregate nominal amount, cannot be included in the prospectus: (a) the acceptances of the purchase or subscription of securities may be withdrawn for not less than two working days after the final offer price and/or amount of securities to be offered to the public has been filed; or the following shall be disclosed in the prospectus: (i) the maximum price and/or the maximum amount of securities, as far as they are available; or (ii) the valuation methods and criteria, and/or conditions, in accordance with which the final offer price is to be determined and an explanation of any valuation methods used. the following shall be disclosed in the prospectus: (i) the maximum price and/or the maximum amount of securities, as far as they are available; or (ii) the valuation methods and criteria, and/or conditions, in accordance with which the final offer price is to be determined and an explanation of any valuation methods used. 2. The final offer price and amount of securities shall be filed with the competent authority of the home Member State and made available to the public in accordance with the arrangements set out in Article 21(2).
Article 18 Omission of information
1. The competent authority of the home Member State may authorise the omission from the prospectus, or constituent parts thereof, of certain information to be included therein, where it considers that any of the following conditions is met: (a) disclosure of such information would be contrary to the public interest; (b) disclosure of such information would be seriously detrimental to the issuer or to the guarantor, if any, provided that the omission of such information would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer or guarantor, if any, and of the rights attached to the securities to which the prospectus relates; (c) such information is of minor importance in relation to a specific offer or admission to trading on a regulated market and would not influence the assessment of the financial position and prospects of the issuer or guarantor, if any. The competent authority shall submit a report to ESMA on a yearly basis regarding the information the omission of which it has authorised. 2. Subject to adequate information being provided to investors, where, exceptionally, certain information required to be included in a prospectus, or constituent parts thereof, is inappropriate to the sphere of activity or to the legal form of the issuer or of the guarantor, if any, or to the securities to which the prospectus relates, the prospectus, or constituent parts thereof, shall contain information equivalent to the required information, unless no such information exists. 3. Where securities are guaranteed by a Member State, an issuer, an offeror or a person asking for admission to trading on a regulated market, when drawing up a prospectus in accordance with Article 4, shall be entitled to omit information pertaining to that Member State. 4. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to specify the cases where information may be omitted in accordance with paragraph 1, taking into account the reports of competent authorities to ESMA referred to in paragraph 1. 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 18 ):
Omission of information 1. The competent authority of the home Member State may authorise the omission from the prospectus, or constituent parts thereof, of certain information to be included therein, where it considers that any of the following conditions is met: (a) disclosure of such information would be contrary to the public interest; (b) disclosure of such information would be seriously detrimental to the issuer or to the guarantor, if any, provided that the omission of such information would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the issuer or guarantor, if any, and of the rights attached to the securities to which the prospectus relates; (c) such information is of minor importance in relation to a specific offer or admission to trading on a regulated market and would not influence the assessment of the financial position and prospects of the issuer or guarantor, if any. The competent authority shall submit a report to ESMA on a yearly basis regarding the information the omission of which it has authorised. 2. Subject to adequate information being provided to investors, where, exceptionally, certain information required to be included in a prospectus, or constituent parts thereof, is inappropriate to the sphere of activity or to the legal form of the issuer or of the guarantor, if any, or to the securities to which the prospectus relates, the prospectus, or constituent parts thereof, shall contain information equivalent to the required information, unless no such information exists. 3. Where securities are guaranteed by a Member State, an issuer, an offeror or a person asking for admission to trading on a regulated market, when drawing up a prospectus in accordance with Article 4, shall be entitled to omit information pertaining to that Member State. 4. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to specify the cases where information may be omitted in accordance with paragraph 1, taking into account the reports of competent authorities to ESMA referred to in paragraph 1. 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 19 Incorporation by reference
1. Information may be incorporated by reference in a prospectus where it has been previously or simultaneously published electronically, drawn up in a language fulfilling the requirements of Article 27 and where it is contained in one of the following documents: (a) documents which have been approved by a competent authority, or filed with it, in accordance with this Regulation or Directive 2003/71/EC; (b) documents referred to in points (f) to (i) of Article 1(4) and points (e) to (h) and point (j)(v) of the first subparagraph of Article 1(5); (c) regulated information; (d) annual and interim financial information; (e) audit reports and financial statements; (f) management reports as referred to in Chapter 5 of Directive 2013/34/EU of the European Parliament and of the Council ( 22 ) ; (g) corporate governance statements as referred to in Article 20 of Directive 2013/34/EU; (h) reports on the determination of the value of an asset or a company; (i) remuneration reports as referred to in Article 9b of Directive 2007/36/EC of the European Parliament and of the Council ( 23 ) ; (j) annual reports or any disclosure of information required under Articles 22 and 23 of Directive 2011/61/EU of the European Parliament and of the Council ( 24 ) ; (k) memorandum and articles of association. Such information shall be the most recent available to the issuer. Where only certain parts of a document are incorporated by reference, a statement shall be included in the prospectus that the non-incorporated parts are either not relevant for the investor or covered elsewhere in the prospectus. 2. When incorporating information by reference, issuers, offerors or persons asking for admission to trading on a regulated market shall ensure accessibility of the information. In particular, a cross-reference list shall be provided in the prospectus in order to enable investors to identify easily specific items of information, and the prospectus shall contain hyperlinks to all documents containing information which is incorporated by reference. 3. Where possible alongside the first draft of the prospectus submitted to the competent authority, and in any case during the prospectus review process, the issuer, the offeror or the person asking for admission to trading on a regulated market shall submit in searchable electronic format any information which is incorporated by reference into the prospectus, unless such information has already been approved by or filed with the competent authority approving the prospectus. 4. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to update the list of documents set out in paragraph 1 of this Article by including additional types of documents required under Union law to be filed with or approved by a public authority. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph of this paragraph 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 19 ):
Incorporation by reference 1. Information may be incorporated by reference in a prospectus where it has been previously or simultaneously published electronically, drawn up in a language fulfilling the requirements of Article 27 and where it is contained in one of the following documents: (a) documents which have been approved by a competent authority, or filed with it, in accordance with this Regulation or Directive 2003/71/EC; (c) regulated information; (d) annual and interim financial information; (e) audit reports and financial statements; (f) management reports as referred to in Chapter 5 of Directive 2013/34/EU of the European Parliament and of the Council ( 10 ); (g) corporate governance statements as referred to in Article 20 of Directive 2013/34/EU; (h) reports on the determination of the value of an asset or a company; (i) remuneration reports as referred to in Article 9b of Directive 2007/36/EC of the European Parliament and of the Council ( 11 ); (j) annual reports or any disclosure of information required under Articles 22 and 23 of Directive 2011/61/EU of the European Parliament and of the Council ( 12 ); (k) memorandum and articles of association. Such information shall be the most recent available to the issuer. Where only certain parts of a document are incorporated by reference, a statement shall be included in the prospectus that the non-incorporated parts are either not relevant for the investor or covered elsewhere in the prospectus. 2. When incorporating information by reference, issuers, offerors or persons asking for admission to trading on a regulated market shall ensure accessibility of the information. In particular, a cross-reference list shall be provided in the prospectus in order to enable investors to identify easily specific items of information, and the prospectus shall contain hyperlinks to all documents containing information which is incorporated by reference. 3. Where possible alongside the first draft of the prospectus submitted to the competent authority, and in any case during the prospectus review process, the issuer, the offeror or the person asking for admission to trading on a regulated market shall submit in searchable electronic format any information which is incorporated by reference into the prospectus, unless such information has already been approved by or filed with the competent authority approving the prospectus. 4. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to update the list of documents set out in paragraph 1 of this Article by including additional types of documents required under Union law to be filed with or approved by a public authority. Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 20 Scrutiny and approval of the prospectus
1. A prospectus shall not be published unless the relevant competent authority has approved it, or all of its constituent parts in accordance with Article 10. 2. The competent authority shall notify the issuer, the offeror or the person asking for admission to trading on a regulated market of its decision regarding the approval of the prospectus within 10 working days of the submission of the draft prospectus. Where the competent authority fails to take a decision on the prospectus within the time limits laid down in the first subparagraph of this paragraph and paragraphs 3 and 6, such failure shall not be deemed to constitute approval of the application. The competent authority shall notify ESMA of the approval of the prospectus and any supplement thereto as soon as possible and in any event by no later than the end of the first working day after that approval is notified to the issuer, the offeror or the person asking for admission to trading on a regulated market. 3. The time limit set out in the first subparagraph of paragraph 2 shall be extended to 20 working days where the offer to the public involves securities issued by an issuer that does not have any securities admitted to trading on a regulated market and that has not previously offered securities to the public. The time limit of 20 working days shall only be applicable for the initial submission of the draft prospectus. Where subsequent submissions are necessary in accordance with paragraph 4, the time limit set out in the first subparagraph of paragraph 2 shall apply. 4. Where the competent authority finds that the draft prospectus does not meet the standards of completeness, comprehensibility and consistency necessary for its approval and/or that changes or supplementary information are needed: (a) it shall inform the issuer, the offeror or the person asking for admission to trading on a regulated market of that fact promptly and at the latest within the time limits set out in the first subparagraph of paragraph 2 or, as applicable, paragraph 3, as calculated from the submission of the draft prospectus and/or the supplementary information; and (b) it shall clearly specify the changes or supplementary information that are needed. In such cases, the time limit set out in the first subparagraph of paragraph 2 shall then apply only from the date on which a revised draft prospectus or the supplementary information requested are submitted to the competent authority. 5. Where the issuer, the offeror or the person asking for admission to trading on a regulated market is unable or unwilling to make the necessary changes or to provide the supplementary information requested in accordance with paragraph 4, the competent authority shall be entitled to refuse the approval of the prospectus and terminate the review process. In such case, the competent authority shall notify the issuer, the offeror or the person asking for admission to trading on a regulated market of its decision and indicate the reasons for such refusal. 6. By way of derogation from paragraphs 2 and 4, the time limits set out in the first subparagraph of paragraph 2 and paragraph 4 shall be reduced to five working days for a prospectus consisting of separate documents drawn up by frequent issuers referred to in Article 9(11), including frequent issuers using the notification procedure provided for in Article 26. The frequent issuer shall inform the competent authority at least five working days before the date envisaged for the submission of an application for approval. A frequent issuer shall submit an application to the competent authority containing the necessary amendments to the universal registration document, where applicable, the securities note and the summary submitted for approval. 7. Competent authorities shall provide on their websites guidance on the scrutiny and approval process in order to facilitate efficient and timely approval of prospectuses. Such guidance shall include contact details for the purposes of approvals. The issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the prospectus shall have the possibility to directly communicate and interact with the staff of the competent authority throughout the process of approval of the prospectus. 8. On request of the issuer, the offeror or the person asking for admission to trading on a regulated market, the competent authority of the home Member State may transfer the approval of a prospectus to the competent authority of another Member State, subject to prior notification to ESMA and the agreement of that competent authority. The competent authority of the home Member State shall transfer the documentation filed, together with its decision to grant the transfer, in electronic format, to the competent authority of the other Member State on the date of its decision. Such a transfer shall be notified to the issuer, the offeror or the person asking for admission to trading on a regulated market within three working days from the date of the decision taken by the competent authority of the home Member State. The time limits set out in the first subparagraph of paragraph 2 and paragraph 3 shall apply from the date the decision was taken by the competent authority of the home Member State. Article 28(4) of Regulation (EU) No 1095/2010 shall not apply to the transfer of the approval of the prospectus in accordance with this paragraph. Upon completion of the transfer of the approval, the competent authority to whom the approval of the prospectus has been transferred shall be deemed to be the competent authority of the home Member State for that prospectus for the purposes of this Regulation. 9. This Regulation shall not affect the competent authority’s liability, which shall continue to be governed solely by national law. Member States shall ensure that their national provisions on the liability of competent authorities apply only to approvals of prospectuses by their competent authority. 10. The level of fees charged by the competent authority of the home Member State for the approval of prospectuses, of documents that are intended to become constituent parts of prospectuses in accordance with Article 10 or of supplements to prospectuses as well as for the filing of universal registration documents, amendments thereto and final terms, shall be reasonable and proportionate and shall be disclosed to the public at least on the website of the competent authority. 11. 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 of prospectuses, in particular the completeness, comprehensibility and consistency of the information contained therein, and the procedures for the approval of the prospectus. 12. ESMA shall use its powers under Regulation (EU) No 1095/2010 to promote supervisory convergence with regard to the scrutiny and approval processes of competent authorities when assessing the completeness, consistency and comprehensibility of the information contained in a prospectus. To that end, ESMA shall develop guidelines addressed to the competent authorities on the supervision and enforcement with regard to prospectuses, covering the examination of compliance with this Regulation and with any delegated and implementing acts adopted pursuant thereto. In particular, ESMA shall foster convergence regarding the efficiency, methods and timing of the scrutiny by the competent authorities of the information given in a prospectus, using in particular the peer reviews pursuant to paragraph 13. 13. Without prejudice to Article 30 of Regulation (EU) No 1095/2010, ESMA shall organise and conduct at least one peer review of the scrutiny and approval procedures of competent authorities, including notifications of approval between competent authorities. The peer review shall also assess the impact of different approaches with regard to scrutiny and approval by competent authorities on issuers’ ability to raise capital in the Union. The report on the peer review shall be published by 21 July 2022. In the context of the peer review, ESMA shall take into account the opinions or advice from the Securities and Markets Stakeholder Group referred to in Article 37 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 20 ):
Scrutiny and approval of the prospectus 1. A prospectus shall not be published unless the relevant competent authority has approved it, or all of its constituent parts in accordance with Article 10. 2. The competent authority shall notify the issuer, the offeror or the person asking for admission to trading on a regulated market of its decision regarding the approval of the prospectus within 10 working days of the submission of the draft prospectus. Where the competent authority fails to take a decision on the prospectus within the time limits laid down in the first subparagraph of this paragraph and paragraphs 3 and 6, such failure shall not be deemed to constitute approval of the application. The competent authority shall notify ESMA of the approval of the prospectus and any supplement thereto as soon as possible and in any event by no later than the end of the first working day after that approval is notified to the issuer, the offeror or the person asking for admission to trading on a regulated market. 3. The time limit set out in the first subparagraph of paragraph 2 shall be extended to 20 working days where the offer to the public involves securities issued by an issuer that does not have any securities admitted to trading on a regulated market and that has not previously offered securities to the public. The time limit of 20 working days shall only be applicable for the initial submission of the draft prospectus. Where subsequent submissions are necessary in accordance with paragraph 4, the time limit set out in the first subparagraph of paragraph 2 shall apply. 4. Where the competent authority finds that the draft prospectus does not meet the standards of completeness, comprehensibility and consistency necessary for its approval and/or that changes or supplementary information are needed: (a) it shall inform the issuer, the offeror or the person asking for admission to trading on a regulated market of that fact promptly and at the latest within the time limits set out in the first subparagraph of paragraph 2 or, as applicable, paragraph 3, as calculated from the submission of the draft prospectus and/or the supplementary information; and (b) it shall clearly specify the changes or supplementary information that are needed. In such cases, the time limit set out in the first subparagraph of paragraph 2 shall then apply only from the date on which a revised draft prospectus or the supplementary information requested are submitted to the competent authority. 5. Where the issuer, the offeror or the person asking for admission to trading on a regulated market is unable or unwilling to make the necessary changes or to provide the supplementary information requested in accordance with paragraph 4, the competent authority shall be entitled to refuse the approval of the prospectus and terminate the review process. In such case, the competent authority shall notify the issuer, the offeror or the person asking for admission to trading on a regulated market of its decision and indicate the reasons for such refusal. 6. By way of derogation from paragraphs 2 and 4, the time limits set out in the first subparagraph of paragraph 2 and paragraph 4 shall be reduced to five working days for a prospectus consisting of separate documents drawn up by frequent issuers referred to in Article 9(11), including frequent issuers using the notification procedure provided for in Article 26. The frequent issuer shall inform the competent authority at least five working days before the date envisaged for the submission of an application for approval. A frequent issuer shall submit an application to the competent authority containing the necessary amendments to the universal registration document, where applicable, the securities note and the summary submitted for approval. 7. Competent authorities shall provide on their websites guidance on the scrutiny and approval process in order to facilitate efficient and timely approval of prospectuses. Such guidance shall include contact details for the purposes of approvals. The issuer, the offeror, the person asking for admission to trading on a regulated market or the person responsible for drawing up the prospectus shall have the possibility to directly communicate and interact with the staff of the competent authority throughout the process of approval of the prospectus. 8. On request of the issuer, the offeror or the person asking for admission to trading on a regulated market, the competent authority of the home Member State may transfer the approval of a prospectus to the competent authority of another Member State, subject to prior notification to ESMA and the agreement of that competent authority. The competent authority of the home Member State shall transfer the documentation filed, together with its decision to grant the transfer, in electronic format, to the competent authority of the other Member State on the date of its decision. Such a transfer shall be notified to the issuer, the offeror or the person asking for admission to trading on a regulated market within three working days from the date of the decision taken by the competent authority of the home Member State. The time limits set out in the first subparagraph of paragraph 2 and paragraph 3 shall apply from the date the decision was taken by the competent authority of the home Member State. Article 28(4) of Regulation (EU) No 1095/2010 shall not apply to the transfer of the approval of the prospectus in accordance with this paragraph. Upon completion of the transfer of the approval, the competent authority to whom the approval of the prospectus has been transferred shall be deemed to be the competent authority of the home Member State for that prospectus for the purposes of this Regulation. 9. This Regulation shall not affect the competent authority’s liability, which shall continue to be governed solely by national law. Member States shall ensure that their national provisions on the liability of competent authorities apply only to approvals of prospectuses by their competent authority. 10. The level of fees charged by the competent authority of the home Member State for the approval of prospectuses, of documents that are intended to become constituent parts of prospectuses in accordance with Article 10 or of supplements to prospectuses as well as for the filing of universal registration documents, amendments thereto and final terms, shall be reasonable and proportionate and shall be disclosed to the public at least on the website of the competent authority. 11. 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 of prospectuses, in particular the completeness, comprehensibility and consistency of the information contained therein, and the procedures for the approval of the prospectus. 12. ESMA shall use its powers under Regulation (EU) No 1095/2010 to promote supervisory convergence with regard to the scrutiny and approval processes of competent authorities when assessing the completeness, consistency and comprehensibility of the information contained in a prospectus. To that end, ESMA shall develop guidelines addressed to the competent authorities on the supervision and enforcement with regard to prospectuses, covering the examination of compliance with this Regulation and with any delegated and implementing acts adopted pursuant thereto. In particular, ESMA shall foster convergence regarding the efficiency, methods and timing of the scrutiny by the competent authorities of the information given in a prospectus, using in particular the peer reviews pursuant to paragraph 13. 13. Without prejudice to Article 30 of Regulation (EU) No 1095/2010, ESMA shall organise and conduct at least one peer review of the scrutiny and approval procedures of competent authorities, including notifications of approval between competent authorities. The peer review shall also assess the impact of different approaches with regard to scrutiny and approval by competent authorities on issuers’ ability to raise capital in the Union. The report on the peer review shall be published by 21 July 2022. In the context of the peer review, ESMA shall take into account the opinions or advice from the Securities and Markets Stakeholder Group referred to in Article 37 of Regulation (EU) No 1095/2010.
Article 21 Publication of the prospectus
1. Once approved, the prospectus shall be made available to the public by the issuer, the offeror or the person asking for admission to trading on a regulated market at a reasonable time in advance of, and at the latest at the beginning of, the offer to the public or the admission to trading of the securities involved. In the case of an initial offer to the public of a class of shares that is admitted to trading on a regulated market for the first time, the prospectus shall be made available to the public at least six working days before the end of the offer. 2. The prospectus, whether a single document or consisting of separate documents, shall be deemed available to the public when published in electronic form on any of the following websites: (a) the website of the issuer, the offeror or the person asking for admission to trading on a regulated market; (b) the website of the financial intermediaries placing or selling the securities, including paying agents; (c) the website of the regulated market where the admission to trading is sought, or where no admission to trading on a regulated market is sought, the website of the operator of the MTF. 3. The prospectus shall be published on a dedicated section of the website which is easily accessible when entering the website. It shall be downloadable, printable and in searchable electronic format that cannot be modified. The documents containing information incorporated by reference in the prospectus, the supplements and/or final terms related to the prospectus and a separate copy of the summary shall be accessible under the same section alongside the prospectus, including by way of hyperlinks where necessary. The separate copy of the summary shall clearly indicate the prospectus to which it relates. 4. Access to the prospectus shall not be subject to the completion of a registration process, the acceptance of a disclaimer limiting legal liability or the payment of a fee. Warnings specifying the jurisdiction(s) in which an offer or an admission to trading is being made shall not be considered to be disclaimers limiting legal liability. 5. The competent authority of the home Member State shall publish on its website all the prospectuses approved or at least the list of prospectuses approved, including a hyperlink to the dedicated website sections referred to in paragraph 3 of this Article as well as an identification of the host Member State or States where prospectuses are notified in accordance with Article 25. The published list, including the hyperlinks, shall be kept up-to-date and each item shall remain on the website at least for the period referred to in paragraph 7 of this Article. At the same time as it notifies ESMA of the approval of a prospectus or of any supplement thereto, the competent authority shall provide ESMA with an electronic copy of the prospectus and any supplement thereto, as well as the data necessary for its classification by ESMA in the storage mechanism referred to in paragraph 6 and for the report referred to in Article 47. The competent authority of the host Member State shall publish information on all notifications received in accordance with Article 25 on its website. 6. ESMA shall, without undue delay, publish all prospectuses received from the competent authorities on its website, including any supplements thereto, final terms and related translations where applicable, as well as information on the host Member State(s) where prospectuses are notified in accordance with Article 25. Publication shall be ensured through a storage mechanism providing the public with free of charge access and search functions. 7. All prospectuses approved shall remain publicly available in electronic form for at least 10 years after their publication on the websites referred to in paragraphs 2 and 6. Where hyperlinks are used for information incorporated by reference in the prospectus, and the supplements and/or final terms related to the prospectus, such hyperlinks shall be functional for the period referred to in the first subparagraph. 8. An approved prospectus shall contain a prominent warning stating when the validity of the prospectus will expire. The warning shall also state that the obligation to supplement a prospectus in the event of significant new factors, material mistakes or material inaccuracies does not apply when a prospectus is no longer valid. 9. In the case of a prospectus comprising several documents and/or incorporating information by reference, the documents and information that constitute the prospectus may be published and distributed separately provided that those documents are made available to the public in accordance with paragraph 2. Where a prospectus consists of separate documents in accordance with Article 10, each of those constituent documents, except for documents incorporated by reference, shall indicate that it is only one part of the prospectus and where the other constituent documents may be obtained. 10. The text and the format of the prospectus, and any supplement to the prospectus made available to the public, shall at all times be identical to the original version approved by the competent authority of the home Member State. 11. A copy of the prospectus on a durable medium shall be delivered to any potential investor, upon request and free of charge, by the issuer, the offeror, the person asking for admission to trading on a regulated market or the financial intermediaries placing or selling the securities. In the event that a potential investor makes a specific demand for a paper copy, the issuer, the offeror, the person asking for admission to trading on a regulated market or a financial intermediary placing or selling the securities shall deliver a printed version of the prospectus. Delivery shall be limited to jurisdictions in which the offer of securities to the public is made or where the admission to trading on a regulated market is taking place under this Regulation. 12. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to specify further the requirements relating to the publication of the prospectus. 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. 13. ESMA shall develop draft regulatory technical standards to specify the data necessary for the classification of prospectuses referred to in paragraph 5 and the practical arrangements to ensure that such data, including the ISINs of the securities and the LEIs of the issuers, offerors and guarantors, is machine readable. 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 21 ):
Publication of the prospectus 1. Once approved, the prospectus shall be made available to the public by the issuer, the offeror or the person asking for admission to trading on a regulated market at a reasonable time in advance of, and at the latest at the beginning of, the offer to the public or the admission to trading of the securities involved. In the case of an initial offer to the public of a class of shares that is admitted to trading on a regulated market for the first time, the prospectus shall be made available to the public at least six working days before the end of the offer. 2. The prospectus, whether a single document or consisting of separate documents, shall be deemed available to the public when published in electronic form on any of the following websites: (a) the website of the issuer, the offeror or the person asking for admission to trading on a regulated market; (b) the website of the financial intermediaries placing or selling the securities, including paying agents; (c) the website of the regulated market where the admission to trading is sought, or where no admission to trading on a regulated market is sought, the website of the operator of the MTF. 3. The prospectus shall be published on a dedicated section of the website which is easily accessible when entering the website. It shall be downloadable, printable and in searchable electronic format that cannot be modified. The documents containing information incorporated by reference in the prospectus, the supplements and/or final terms related to the prospectus and a separate copy of the summary shall be accessible under the same section alongside the prospectus, including by way of hyperlinks where necessary. The separate copy of the summary shall clearly indicate the prospectus to which it relates. 4. Access to the prospectus shall not be subject to the completion of a registration process, the acceptance of a disclaimer limiting legal liability or the payment of a fee. Warnings specifying the jurisdiction(s) in which an offer or an admission to trading is being made shall not be considered to be disclaimers limiting legal liability. 5. The competent authority of the home Member State shall publish on its website all the prospectuses approved or at least the list of prospectuses approved, including a hyperlink to the dedicated website sections referred to in paragraph 3 of this Article as well as an identification of the host Member State or States where prospectuses are notified in accordance with Article 25. The published list, including the hyperlinks, shall be kept up-to-date and each item shall remain on the website at least for the period referred to in paragraph 7 of this Article. At the same time as it notifies ESMA of the approval of a prospectus or of any supplement thereto, the competent authority shall provide ESMA with an electronic copy of the prospectus and any supplement thereto, as well as the data necessary for its classification by ESMA in the storage mechanism referred to in paragraph 6 and for the report referred to in Article 47. The competent authority of the host Member State shall publish information on all notifications received in accordance with Article 25 on its website. 6. ESMA shall, without undue delay, publish all prospectuses received from the competent authorities on its website, including any supplements thereto, final terms and related translations where applicable, as well as information on the host Member State(s) where prospectuses are notified in accordance with Article 25. Publication shall be ensured through a storage mechanism providing the public with free of charge access and search functions. 7. All prospectuses approved shall remain publicly available in electronic form for at least 10 years after their publication on the websites referred to in paragraphs 2 and 6. Where hyperlinks are used for information incorporated by reference in the prospectus, and the supplements and/or final terms related to the prospectus, such hyperlinks shall be functional for the period referred to in the first subparagraph. 8. An approved prospectus shall contain a prominent warning stating when the validity of the prospectus will expire. The warning shall also state that the obligation to supplement a prospectus in the event of significant new factors, material mistakes or material inaccuracies does not apply when a prospectus is no longer valid. 9. In the case of a prospectus comprising several documents and/or incorporating information by reference, the documents and information that constitute the prospectus may be published and distributed separately provided that those documents are made available to the public in accordance with paragraph 2. Where a prospectus consists of separate documents in accordance with Article 10, each of those constituent documents, except for documents incorporated by reference, shall indicate that it is only one part of the prospectus and where the other constituent documents may be obtained. 10. The text and the format of the prospectus, and any supplement to the prospectus made available to the public, shall at all times be identical to the original version approved by the competent authority of the home Member State. 11. A copy of the prospectus on a durable medium shall be delivered to any potential investor, upon request and free of charge, by the issuer, the offeror, the person asking for admission to trading on a regulated market or the financial intermediaries placing or selling the securities. In the event that a potential investor makes a specific demand for a paper copy, the issuer, the offeror, the person asking for admission to trading on a regulated market or a financial intermediary placing or selling the securities shall deliver a printed version of the prospectus. Delivery shall be limited to jurisdictions in which the offer of securities to the public is made or where the admission to trading on a regulated market is taking place under this Regulation. 12. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to specify further the requirements relating to the publication of the prospectus. 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. 13. ESMA shall develop draft regulatory technical standards to specify the data necessary for the classification of prospectuses referred to in paragraph 5 and the practical arrangements to ensure that such data, including the ISINs of the securities and the LEIs of the issuers, offerors and guarantors, is machine readable. ESMA shall submit those draft regulatory technical standards to the Commission by 21 July 2018.