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ESMA suggests that a common accounting standard might help EU SMEs become more attractive for cross-border investors

  • ESMA (European Securities and Markets Authority) (dark gray) Image
  • European Union Image

21 May 2015

In its response to the European Commission (EC) Green Paper: Building a Capital Markets Union, published today, the European Securities and Markets Authority (ESMA) has suggested that that development of a common specific EU level accounting standard for SMEs listed on multilateral trading facilities (MTFs) might facilitate an improvement in access to cross-border financing.

In its consultation document the EC asks whether there is value in developing a common EU level accounting standard for small and medium-sized companies (SMEs) listed on MTFs.  In its response, ESMA notes that:

"The lack of a common EU level accounting standard for SMEs listed on MTFs does not seem to be the key barrier to accessing financing by these companies at national level; however, use of a common accounting standard might help companies become more attractive for cross-border investors."

ESMA believes that it would be of more immediate benefit to allow companies listed on MTFs in all EU Member States to use IFRS for their consolidated accounts as an alternative to national accounting standards, something that is not currently the case in the majority of jurisdictions although it is allowed in the UK.

The press release and full response letter to the EC consultation are available from the ESMA website.

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