Small businesses win exemption from Prospectus Directive

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The Independent Online

The London Stock Exchange has won a mini victory in its campaign to rein in proposals for a pan-European standard governing company prospectuses.

The European Parliament's Economic and Monetary Affairs Committee yesterday accepted recommendations that companies valued at less than €350m (£213m) be exempted from the Prospectus Directive, which is supposed to make it easier for businesses to tap the capital markets across borders.

The exchange is among a multitude of bodies that have lobbied for the directive to be tweaked in the interests of smaller companies, especially firms hoping to list on the Alternative Investment Market.

In contention are proposals that companies have prospectuses approved by their domestic listing authority and publish new documents each time they issue new shares.

Small business groups fear the additional red tape would cost UK-quoted companies an additional £500m, and could even see the demise of lightly regulated markets such as AIM.

An LSE spokesman said: "[The agreement] would ensure the future of AIM and it leaves the door open for smaller companies to raise capital more easily across the rest of Europe."

The LSE attributed EMAC's vote to its lobbying efforts and those of the European Parliament rapporteur Chris Huhne.

The directive remains to be passed by the full European Parliament and European Council in its amended form.

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