We responded to the European Commission Green Paper – Building a Capital Markets Union. We welcomed that the first priority for early action listed in the Green Paper is a re-evaluation of the prospectus regime in order to lower the barriers to accessing capital markets and also how to boost the take-up of SME Growth Markets.
We supported other areas identified for short term action, particularly widening the investor base for quoted SMEs to build an efficient and sustainable capital market for quoted SMEs. Notwithstanding this, we highlighted other key points that should be added to the list of priorities for early action, as they are essential to ensuring the success of the Capital Markets Union initiative, namely:
- Assessing the regulatory landscape
- Building on the ecosystem for SME Growth Markets
- Creating an SME Asset Class
- Designing appropriate indices
- Secondary Market Pilot Schemes
We also identified a number of regulatory and behavioural issues in public equity markets that make raising finance on these markets more difficult, less efficient and less effective for SMEs, especially when compared to other forms of finance available to them. Wherever possible, we also highlighted possible policy solutions to alleviate these issues and, ultimately, make public equity markets more accessible for SMEs.