April 23
2021
Trajan Shipley
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16th February 2021
Banking & Finance Covid-19 Institutional law

Council adopts package to facilitate access to funding

The Council of the EU has adopted amendments to the Markets in Financial Instruments Directive (MiFID II) and the Prospectus Regulation (2017/1129) to facilitate the recapitalisation of EU companies on financial markets. These measures form part of the Capital Markets Recovery Package agreed between the Council and the European Parliament at the end of last year. The aim of the package is to make it easier for capital markets to support economic recovery from the pandemic.

The MiFID amendments include:

  • simplifying information requirements in a targeted way, for instance on costs and charges disclosures to facilitate investment;
  • providing banks and financial firms an exemption allowing the bundling of research and execution costs when it comes to research on small and mid-cap issuers, to improve access to capital market finance;
  • adapting the position limit regime for commodity derivatives to help European businesses to react to market volatility and to support the emergence and growth of euro-denominated commodity derivatives markets.

As for the amendments to the Prospectus Regulation, a new, shorter ‘EU recovery prospectus’ has also been agreed to make it easier for companies to issue capital, along with changes concerning availability for capital increases, and minimum information to be included.

The EU securitisation rules will also be extended to cover synthetic securitisations, a credit risk management tool for banks, to free up bank capital for further lending, and allow more investment to fund the COVID-19 economic recovery. Changes will also be made to enable better management of balance sheets when dealing with the economic fallout.

According to the Council, the texts of the legislative acts adopted today will be signed on 16 February and are expected to be published in the Official Journal before the end of the month.

Read the Council’s press release here.

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