On May 24th, the European Commission released proposals promoting SME growth markets. The initiatives aim to grant flexibility to SME growth market operators regarding semi-annual reporting obligations for debt-only issuers.

Under the MiFID II Directive (2014/65/EU), SME growth market trading venues were established as a specialized subset of multilateral trading facilities. These structures were designed to facilitate access to capital for SMEs and the further development of specialist markets.

The current SME definition proves inadequate for bond-issuing companies, and semi-annual reporting requirements created unnecessary burdens. The EC proposals directly address these shortcomings.

Additionally, the Commission proposed exempting privately-placed bonds from market sounding requirements, subject to specific conditions. Market sounding involves sharing transaction information with potential investors before formal announcement to gauge their interest levels.