2012 campaigns focus on growth for small and mid-cap companies

10th February 2012

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The Quoted Companies Alliance has developed six key campaigns for 2012 - all which focus on promoting growth in the small and mid-cap quoted company sector. While our committees will continue to respond to various government consultations and follow all the current regulatory changes, we will be pushing forward these campaigns throughout the year too:

  • Capital Gains Tax Reform – Entrepreneurs’ Relief

Why we are working on it:

So that all that contribute to the long-term success and growth of a business can qualify for capital gains tax relief (rather than just those employees that own 5% of shares in their company).

What we are proposing:

Remove the requirement to hold 5% shares in a company to qualify for a reduced rate of capital gains tax and extend the holding period of shares from 12 months to three years.

Allow long-term investors to also qualify for the relief by rebranding it ‘Stakeholders Relief’; only have the relief apply for investments in SMEs; and they have to hold shares for five years before they can get the reduced capital gains tax rate.

  • Non-bank lending and debt markets

Why we are working on it:

To open up another financing option to smaller companies; create more effective markets; and raise awareness about non-bank lending (i.e. debt issued on the market).

What we are proposing:

Look at how Government can raise awareness about different funding options for smaller companies (besides just bank debt and equity).

Encourage the Government to put pressure on the credit rating agencies to develop a more cost-effective rating for smaller companies.

Pressing for a level playing field in how equity and debt financing is incentivised through tax.

  • QCA/BDO Small & Mid-Cap Sentiment Index

Why we are working on it:

Creating awareness and knowledge of the sector (especially with Government and policymakers).

What we are proposing:

A quarterly sentiment survey that tracks the economic and business confidence of the small and mid-cap sector (advisors and corporates), with a specific theme for each quarter.

  • A ‘UK Index’

Why we are working on it:

Creating knowledge and awareness of the small and mid-cap quoted company sector and its contribution to the UK economy.

What we are proposing:

An index series that measures companies’ contribution to the UK economy (ie through metrics such as tax paid to the UK, number of employees in the UK, etc).

  • A potential SME Asset Class

Why we are working on it:

Increase the ability of small and mid-cap quoted companies to attract investment and make it easier for funds to invest in these companies.

Make it easier and more effective regulators and policymakers to make proportionate rules for small and mid-cap quoted companies.

What we are proposing:

For the European Commission to create an SME asset class (ie companies of a certain size would be a member of this ‘asset class’ ) – we are proposing that this includes SMEs both on the Main List and AIM.

  • Proportionate IFRS

Why we are working on it:

Reduce the burden on companies in terms of having to produce accounts and make companies’ reports more meaningful and less complex.

What we are proposing:

For the IASB to undertake a project that looks specifically at small and mid-cap quoted companies' difficulties with IFRS and to identify ways to simplify IFRS.

Do you think one of these is particularly important? Or do you think we have missed the mark and should be focused on something else? Let us know by emailing Kate Jalbert.

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