The European Commission has published for consultation a draft Delegated Regulation on registration conditions to promote the use of SME Growth Markets for the purposes of the revised Markets in Financial Instruments Directive. MiFID II introduced SME Growth Markets as a new sub-category of multilateral trading facility in January 2018 to facilitate access to capital for Small and Medium-sized Enterprises. The proposed delegated regulation will amend existing delegated legislation under MiFID II to address regulatory barriers to the take-up of SME Growth Markets. The European Commission has also published separately a legislative proposal to make adjustments to the Market Abuse Regulation and the Prospectus Regulation is to promote the use of SME Growth Markets.

The draft Delegated Regulation will: (i) introduce a less restrictive definition of a "non-equity issuer," which will be based on the size of the issuance, with the threshold being set at €50 million over a period of 12 months, starting on January 1 each year; (ii) make modifications to give flexibility to SME Growth Market operators to impose a half yearly financial report on non-equity issuers (while keeping this obligation unchanged for equity issuers); and (iii) introduce a requirement for the listing rules of SME Growth Markets to impose a free float requirement for equity issuers when the shares are admitted to trading for the first time.

Feedback is invited on the draft Delegated Regulation by June 21, 2018. The Delegated Regulation will then be finalized by the European Commission. Once adopted, it will enter into force 20 days following its publication in the Official Journal of the European Union and will apply directly across the EU from three months after that date.

View the draft Delegated Regulation.

View the proposal to amend the Market Abuse Regulation and the Prospectus Regulation.