The European Commission wants to relax some rules for financial markets in order to contribute to the recovery of the Corona crisis. Among other things, the new rules should increase investment in the economy and increase the capacity of banks to finance the recovery. Eu Commissioner Valdis Dombrovskis (Financial Supervision) presented the plans on Friday.
“Financial markets are crucial to the recovery, because only government resources are not enough to get economies back on track,” Dombrovskis said. Among other things, the European Union wants to relax the prospectus rules for the issuance of shares and bonds. For example, when issuing new shares, a shorter prospectus is sufficient, which is easier to create and read. This is intended to reduce costs and thus increase investment attractiveness.
Another measure is that the committee allows free analyst research to be distributed to small stock exchange funds. Since the introduction of the Mifid II Financial Directive at the end of 2018, banks have had to charge investors for analyst research. This should lead to greater transparency in costs. Reports of smaller stock exchange funds were subsequently stopped because, in practice, it appeared that too few investors were willing to pay for these reports.
With the new measures, the committee hopes that investors will reinvest in smaller stock exchange funds, as analyst research will help them gain more knowledge of the funds. The withdrawal of the ban applies to companies with an average market capitalisation of less than EUR 1 billion in the last 12 months. The Mifid scheme therefore applies to companies with a value above this.