Capital Markets Union: Commission welcomes agreement to give companies easier access to capital markets

The European Parliament, the Council and the Commission have agreed on revamped prospectus regulation. The reform was proposed by the Commission on 30 November 2015 as part of its Capital Markets Union Action Plan in order to improve access to finance for companies and simplify information for investors. The prospectus is the gateway to capital markets for many companies, but can often be costly and burdensome for companies to produce, especially smaller ones, as it often requires hundreds of pages of detailed information. The new EU prospectus rules will exempt the smallest capital raisings from the burden of producing a lengthy and expensive prospectus. Start-ups and SMEs can now raise up to €1 million on local growth markets without a prospectus. Member States are able to set higher thresholds to support growth in their domestic markets. The EU growth prospectus will also help investors to make informed investment decisions based on the clearer information provided. The new prospectus rules will also help to strip away burdens, deliver shorter prospectuses, better and more concise information for investors and a fast track regime for companies that frequently tap capital markets. Vice-President Valdis Dombrovskis, in charge of Financial Stability, Financial Services and Capital Markets Union, said: “We have completed another milestone of the Capital Markets Union, cutting unnecessary red-tape to make it easier and cheaper for companies, especially SMEs, to raise money in the capital markets. Investors will get clearer information to make their investment decisions. This will encourage more cross-border investment opportunities and help Europe to grow.”