Proposals to cut red tape for companies seeking to raise capital and make prospectuses easier for potential investors to understand have been welcomed today by Conservative MEP Kay Swinburne.
The ideas put forward by Briton’s EU Commissioner Jonathan Hill particularly benefit small and medium sized businesses (SMEs) , which would be relieved of some of the costly burden of producing a lengthy, detailed prospectus each time they sought to raise funding by issuing shares or debt.
Lord Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union,
said: “We need a prospectus regime that gives investors the information they need but that does not pile up unnecessary costs and puts companies off raising money on the public markets.
“Today’s proposals strike a better balance. They safeguard investors while making it easier for small and medium-sized enterprises to raise money.”
Mrs Swinburne, the Conservatives’ Economic and Monetary Affairs Spokesman in Brussels and MEP for Wales, believed the planned changes would make it easier for UK SMEs to raise money.
“Anything that lifts the burden of red tape from our companies must be a good thing and the proposals appear to strike a sensible balance between reducing bureaucracy and removing unnecessary jargon on the one hand, while informing and protecting investors on the other,” she said.
“If dealt with correctly these proposals should play an important part in further encouraging and improving investment in Europe.”
The main points of the plan, which now goes to the European Parliament and the European Council for discussion and adoption, include:
*Raising the threshold for capital raisings for which an EU prospectus is required from €100,000 to €500,000. Member states would be able to set higher thresholds for their domestic markets, up from €5 million to €10 million.
* For companies wanting to tap into European markets, a streamlined prospectus will be introduced for capitalisations of up to €200 million.
* Prospectuses will be made shorter and easier for investors to understand by clearly defining what information they must contain.
* Public companies seeking to raise issue additional shares or corporate bonds will also benefit from a new, simplified prospectus.
* A single, searchable online portal for all approved EU prospectuses will be provided for the first time, making it easier for the public to make cross border investments.
