Brussels: 18 March 2010

The Permanent Representation of France to the European Union published a news article titled: Intervention by Mrs Christine Lagarde, Minister of Economy, Industry and Employment.

The news article states:

“On the 18th March 2010 Ms. Lagarde, Minister of Economy, Industry and Employment, opened the conference 'Do We Need an EU Small Business Act Listing', co-organized by the ECMI and the CEPS.

Ms. Lagarde welcomed the report and particularly Demarigny identified five recommendations:

• Creating a legal definition of 'Small and Medium-Sized Listed Issuers in Europe' (SMILE).
• Providing more relevant information to investors by creating a special scheme for Smiles in the context of the Prospectus Directive.
• Extension of time to three months to publish yearly financial reports.
• Creating a specific plan IFRS for SMEs entering the market.
• Establishment of a European platform for trading SMILE.”

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On the 19th March 2010 MAZARS published a news topic titled: Report published calling for an ‘EU-listing Small Business Act’, prepared by Fabrice Demarigny at the request of Christine Lagarde.

The report (available in French and English languages) titled:

Un « Small Business Act » du droit boursier européen - Mettre en place un environnement financier et réglementaire adapté aux petits et moyens émetteurs cotés en Europe (« SMILEs »). Mars 2010. Rapport établi par Fabrice DEMARIGNY, directeur des activités marchés de capitaux du groupe Mazars

An EU-Listing Small Business Act - Establishing a proportionate regulatory and financial environment for Small and Medium-sized Issuers Listed in Europe (SMILEs). March 2010. Report by Fabrice DEMARIGNY, Global Head of Capital Markets Activities of MAZARS Group

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London: 28th April 2010

The Genesis Initiative Communications Director Christian Lister (and also Operations Manager of X-Press Legal Services) distributed via email a press release on the SMILES report. The press release states:

“The essence of this report appears to be in the section which says: In 2009, a large number of SMILEs, but also regulators, public authorities, exchanges and stakeholders shared the view that the initial and on-going listing costs outweigh the benefits.

It appears therefore that the EU Directives have set requirements representing a barrier, which is too high for Small and Medium Companies in terms of compliance and costs. Interviews substantiate this fact.

If this were the case there is obviously a need to do something about it.

The mechanics of a solution simple, however I offer the following general points:

• It is far better to correct the existing systems rather than try to impose a new structure.
• Why were the EU Directives that set the barriers passed? Do we need them? Are they doing any good?
• If there were a good reason for these Directives, is it still there? Could there be another way of solving the problem?
• Years ago there did not appear to be any real barriers to a small business getting into the capital markets. What has happened to prevent them?
• Creating something new would inevitably mean more legislation and therefore a greater need for specialists. The more specialists there are, the higher the cost for emerging businesses to get into the market.

Well-meaning regulation often has the opposite effects that it was meant to achieve. A good example is the employment legislation in France.

This is so complex that many SMEs opt to stay small and use only family workers.

If you were to be considering extra legislation I would urge you to extrapolate the consequences as well as the immediate results.”

Related news topics

Reducing red tape for small firms

ASEDIE: Impact on Business Registers

ASEDIE responds on Business Registers