When the European Commission’s Capital Markets Union (CMU) Action Plan was launched in 2015, the year 2019 was earmarked as a turning point for Europe’s, and our, capital markets. Five years down the line, is the CMU a market reality?
A useful status check may be found in the Commission’s 2017 mid-term review, highlighting the progress made and the work that remains outstanding. This article focuses specifically on the strategic initiatives introduced under the CMU to assist Start-Ups and SMEs in tapping into the capital markets.
Firstly, and pursuant to the EU’s wider FinTech Action Plan, the EC has spearheaded talks on the proposed ‘European Crowdfunding Service Providers Regulation’, set to create an EU-wide regime for lending-based and investment-based crowdfunding for offers of up to €8,000,000, overcoming cross-border hurdles by alleviating operational costs and legal uncertainties that characterise a market that is estimated to have provided over €680 million worth of financing in 2017.
This will strengthen Malta’s own bespoke supplementary licence conditions for investment-based crowdfunding introduced in July 2018, by providing the option of a passportable licence.
Two other pillars in the CMU’s action plan are the ‘SME Growth Markets’ and ‘EU Growth Prospectuses’ initiatives, introduced by MiFID II (Regulation (EU) 596/2014) and the Prospectus Regulation (Regulation (EU) 2017/1129) respectively. Initiatives such as these are geared towards easing the administrative burden placed on SMEs when listing or issuing equity or bonds, and facilitating speed and access to markets.
In this spirit, the EC has proposed the notion of a ‘transfer prospectus’, enabling companies that have been listed on an SME growth market for at least three years to transfer their securities to a regulated market through a ‘lighter-touch’ prospectus.
Locally, the Malta Stock Exchange has taken important steps towards implementing the CMU’s Action Plan, such as through the launch of the ‘Prospects MTF’. Now in its third year of operation, almost 20 issuers are listed on Prospects. Furthermore, Malta’s ambition to align itself with the principles and requirements of the CMU is evident through the recently-launched MFSA Fintech Strategy, which has identified alternative financing as a crucial strategic pillar going forward.
These and other salient developments shaping the capital markets will be discussed at Camilleri Preziosi’s Capital Markets Conference being held at the Corinthia Palace Hotel, Attard, on May 31 between 2 and 6pm. For more information one may contact email@example.com, or call on 2123 8989.
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