✔️ Information reviewed and updated in April 2024 by Pedro Martínez González
In order to loosen the reins of small and medium-sized companies (SMEs), the European Union (EU) together with the European Parliament reached an agreement so that they do not get bureaucratic and can get investors, according to the Investing site.
Until now and since 2003, all companies must have a securities issue and offer brochure, a legal document with which potential investors can be aware of the company's activities, as well as its financial situation and participation. within the market.
In this way, potential investors can analyze whether they want to invest their capital in them, as well as SMEs can opt for more and better alliances, in addition to proposals for through crowdfunding (collective collection of money for financing).
In 2009, the last revision of this regulation was made and it remains in force; however, the EU did its part in a preliminary agreement to update it, which is intended to simplify and make it more effective. It also seeks to reduce administrative barriers for companies, especially SMEs, so that they can more easily access the capital market in Europe.
The content of the reform
Due to the difficulties that small and medium-sized companies may encounter in publishing their brochures (mainly due to their costs), the new regulations will support the revocation of this requirement. In this way, SMEs will not be obliged to do so in order to raise capital, when it comes to contributions of up to one million euros.
In addition, the amount with which the publication of the brochure will be mandatory will increase from five to eight million euros, thus freeing many companies from the paperwork involved and that they can also receive the same treatment and be governed under the same regulations that regulate to growing companies.
EU Growth Brochure
This name will refer to the new document, with which SMEs and mid-capitalization companies (less than 500 employees) will be able to count on for its regulation. Thus, a registry of "frequent issues" will also be created with which it is intended to reduce the period of approval of the brochures.
In turn, a free database will be designed and managed (by the European Securities and Markets Authority) to store and publish the brochures online, almost completely eliminating the physical format (unless the potential investor requires it) . This measure is intended to make the brochures much shorter, concise and clear to understand. It was also announced that these brochures will be available to those SMEs that reach a minimum of 100.000 euros, and their text must be accepted by the European Parliament and community partners.
It is expected that, thanks to this reform, investors will be able to have access to clear and unobtrusive information. In this way they will be able to make better and correct decisions for their investments. In addition, it will be a great boost for small and medium-sized companies, allowing them to opt for cross-border opportunities, which is a benefit for Europe.
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Very good explanation, it has clarified my doubts and I have understood it perfectly! Thank you!!