Labour MEP Alfred Sant has asked the European Commission to provide concrete steps including a timeline regarding the setting up of a fund specialising in Initial Public Offerings for small and medium sized enterprises, a process of offering shares of private corporations to the public.
Such a fund would support investment and financing opportunities for SMEs and address numerous barriers to their methods of raising public and private capital. It could also help small young firms even with risky projects, to stimulate investment.
Alfred Sant has acted as a rapporteur on behalf of the Socialists & Democrats group in the European Parliament on the report for a “Further development of the Capital Markets Union – improving access to capital market finance, in particular by SMEs, and further enabling retail investor participation”.
Since the publication of the first draft of the report in June 2020, Alfred Sant has worked on improvements to the text, to reflect the concerns of small companies, to get retail investors into equity markets where shares are issued
and traded and to safeguard the standards put in place since the 2008 financial crisis.
In its follow up to the European Parliament resolution on further development of the Capital Markets Union, the European Commission welcomed the creation of an SME IPO fund. It however did not further commit to engage in a tangible proposal or timeline for a concrete action in this regard.
“The financing mix of European SMEs has barely changed over the past years and remains reliant on bank loans. The CMU report on improving access to capital market finance, in particular by SMEs, has clearly called for the creation and prioritisation of a large, private and pan-European fund to support SME funding”, Alfred Sant said.
