On 21 May 2025, the European Commission published a legislative proposal to amend Directives 2014/65/EU (MiFID II) and (EU) 2022/2557 to extend certain mitigating measures currently available to small and medium-sized enterprises (SMEs) to small mid-cap enterprises (SMCs). The amendments are designed to extend to SMCs the support currently available to SMEs to access SME growth markets.
On 21 May 2025, the European Commission published a legislative proposal to amend Directives 2014/65/EU (MiFID II) and (EU) 2022/2557 to extend certain mitigating measures currently available to small and medium-sized enterprises (SMEs) to small mid-cap enterprises (SMCs).
Key proposals:
- Definition of SMCs: The introduction of a harmonised definition of SMCs as enterprises with an average market capitalisation between €200 million and €1 billion over the previous three calendar years.
- Extension of SME Growth Market Provisions: Amends MiFID II to allow SMCs to benefit from access to SME Growth Markets, enabling operators of multilateral trading facilities (MTFs) to meet registration thresholds using both SMEs and SMCs.
- Resilience of Critical Entities: Amends Directive (EU) 2022/2557 to require Member States to include SMCs in their national strategies for enhancing the resilience of critical entities, alongside SMEs.
- Simplification and Proportionality: Extends existing SME-specific measures, such as lighter reporting regimes and reduced administrative burdens, to SMCs. This aims to address challenges faced by SMCs as they transition from SME status to larger enterprises.
- Digital Integration: Proposes leveraging digital tools, such as an SME/SMC ID, to reduce administrative declarations and facilitate interoperability across borders.
The expected impact includes reduced administrative burdens for SMCs, enabling them to focus on growth and innovation, while fostering a smoother transition for enterprises outgrowing SME status. This will improve SMCs' competitiveness, encourage job creation, and enhance their contributions to the EU's economic resilience and technological sovereignty. Including SMCs in resilience strategies will also strengthen the protection of critical entities in vital sectors.
Member states are expected to adopt and publish measures implementing the proposed Directive twelve months after its entry into force and to apply those measures from the following day. The Commission will monitor implementation and explore digital solutions to support the harmonised application of the SMC definition, ensuring alignment with existing platforms like the Business Registers Interconnection System (BRIS). These steps are part of the EU's broader goal to reduce administrative burdens by 25% overall and 35% for SMEs, while fostering a business-friendly environment for SMCs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
