07 June 2016

ESBG, European Investors, European Issuers, FESE: Position papers on the Prospectus Regulation proposal

ESBG

ESBG supports the proposal’s objective of reducing the burden on issuers while safeguarding a high level of investor protection and considers the proposal to be an important step towards the Capital Markets Union (CMU).

ESBG especially welcomes the aim of facilitating the approval process for frequent issuers. However, further work might be needed in respect of other issues, such as the alignment with the PRIIPs regulation. In addition, there are other parts where the proposal is on the right track, but could be more ambitious. This concerns especially the universal registration document regime, introduced by Article 9 of the proposal. ESBG strongly supports the concept, but does not believe that the approach goes far enough to be of much use.

Full position paper

Joint position from European Investors, EuropeanIssuers and FESE

The associations fully support the EC’s ‘Action Plan on Building a CMU’ and its willingness to give priority to strengthening the European economy and ensuring easier access to markets for all companies, in particular for ‘small and medium-sized enterprises’ (SMEs). The associations believe that the Prospectus Regulation proposal is an important first step to reduce frictional costs and to deliver a more unified European capital market, improving funding choices for issuers and investment opportunities for investors.

In particular, the new Regulation should deliver a more effective proportionate regime for European growth companies. In this regard, the associations believe that the Commission’s proposal to establish an optional minimum disclosure regime for SMEs, which will reduce burdens and costs and will be recognised by investors, is a step in the right direction. Moreover, the associations very much welcome the amendments proposed in ECON’s draft report which also recognise the importance of mid-size quoted companies (referred to as ‘mid-cap enterprises’).

The associations support an ambitious approach to Article 15, which focuses on the following aspects:

• Scope: Extend scope of regime to all trading venues and allow any company that qualifies based on their size to benefit from this initiative. 
• Definition of mid-caps: Support the Parliament draft report definition of mid-caps as ‘companies that have an average market cap of between EUR 200 million and EUR 1 billion’. 
• Content of disclosure regime: Provide proposal for a EU Growth Prospectus that is simpler, shorter in length and less costly for issuers, while still comprehensive for investor needs.

Full joint position