Financing for SMEs and mid-tier firms – European liquidity contract

Financing for SMEs and mid-tier firms is vitally important, which is why AMAFI was closely involved in the European Commission’s SME Growth Market initiative. We successfully argued for a liquidity contract that could be used in different Member States, without prejudice to existing accepted market practices at the domestic level. As a result, Regulation (EU) 2019/2115 on SME growth markets introduced the regulatory framework for just such a contract. In accordance with the framework, the Commission asked ESMA to submit the draft regulatory technical standards (RTS) needed to draw up a standard template, giving it until September to do so.

Ahead of the public consultation scheduled to begin before the summer, ESMA staff sought discussions on issues that AMAFI believes must be considered when preparing the RTS. After talks within its Liquidity Contract Group, AMAFI sent ESMA a document building on these discussions and highlighting key points based on its expertise in this area (AMAFI / 20-09). In particular, the document stressed the importance of leeway to accommodate specific national features.