EC proposes new rules to improve EU’s insolvency framework
European Commission (EC) proposed streamlining the EU’s corporate insolvency framework on 7 December. The proposed measures address 3 key areas, namely:
- maximising the recovery value of the liquidated estate, including improving insolvency practitioners’ access to asset registers, also in a cross-border setting
- enhanced procedural efficiency
- fair and predictable distribution of recovered value
With more harmonised EU rules, companies and SMEs will benefit from more uniform conditions. EC believes this will encourage investors to invest across borders and in SMEs specifically, by reducing the perceived risk of investing in SMEs.
European Parliament and the Council will develop their respective positions on the EC proposal in the coming weeks and months.
EC proposes a new framework to promote SMEs’ listing
On the same day, EC proposed new measures to alleviate further burdens related to SMEs’ listings (see here, here and here). The key changes consist of the following:
- simplified, shorter and streamlined prospectus requirements, particularly for SMEs. This is a long-standing demand from Accountancy Europe (see here and here)
- a requirement for all Member States to allow companies to use multiple-vote shares when they list for the first time on SME Growth Markets
- changes to the unbundling rules to improve SME market research coverage. One of the main changes includes a higher market capitalisation threshold below which the unbundling rules do not apply. Firms providing SME research can therefore bundle the price of the study with that of the brokerage services
As with the insolvency proposal, the Parliament and Council will form their respective positions on the proposals in the coming weeks and months.
EC plans tax enablers proposal for June
Publication of the proposal is scheduled on 7 June. EC officials have claimed in previous public statements the proposal aims to tackle ‘aggressive tax planning’ advice provided by extra-EU advisors, but its exact scope remains to be seen. It might also apply to smaller and medium–sized tax advisory practices.
October SME V fund secures €35 million backing from EIF and Invest-NL
October, the European SME lending platform, has secured a EUR 35 million commitment from the European Investment Fund (EIF) and Dutch impact investor Invest-NL for its most recent debt fund for small businesses, titled October SME V.
The October SME V fund is expected to grant over 3 000 loans to European small businesses, targeting a total of EUR 400 million in lending over the next two years. It will offer investors a highly granular and diversified portfolio deployed across multiple locations in the European Union (France, Spain, Italy, the Netherlands and Germany) in more than 15 different sectors. Loan amounts will range from EUR 10 000 to EUR 2 million, with an expected average size of EUR 130 000.
The fund has a unique risk/return profile, addressing borrowers at the lower end of the market while offering attractive returns to investors. With a short duration, monthly distributions and pricing reviewed on a monthly basis, all measures are taken to best protect investors and their returns against inflation.
EC launches public consultation on the revision of Late Payment Directive
The consultation was launched on 20 January, and stakeholders may provide feedback until 17 March. It aims to collect information on late or unfair payment practices and payment behaviour in commercial transactions. The consultation seeks to understand how such late or unfair payments impact businesses’ daily management and their capacity to invest in green and digital transitions.
The current Late Payment Directive, adopted in 2011, has triggered a reduction in payment delays. However, more than 60% of businesses in the EU still need to be paid on time, with SMEs being the most affected. The consultation will be followed by a legislative proposal later in 2023.