European Parliament committees have backed proposals to create a new category of “small mid-cap enterprises” and extend to them some exemptions currently reserved for small and medium-sized firms.
The proposals would define small mid-caps as companies with fewer than 1,000 employees and either up to €200 million in turnover or up to €172 million in total assets, the Parliament announced on Wednesday.
The European Commission had proposed lower thresholds of 750 employees, €150 million in turnover and €129 million in total assets.
The package is designed to prevent a sharp rise in regulatory obligations when a company grows beyond the existing SME threshold.
The Parliament also said it wants support for smaller businesses to follow a “think small first” principle and for the thresholds to be reviewed every five years.
Changes to GDPR, market rules, batteries and F-gases
Under the plans, current exemptions for SMEs from some record-keeping requirements under the General Data Protection Regulation (GDPR) — the EU’s data protection law — would be extended to small mid-caps when data processing is not considered high-risk for individuals’ rights, the Parliament said.
The exemption would not apply to sensitive data such as biometrics, ethnic origin, political opinions, religion, health data or criminal convictions.
Proposed changes would also introduce a small mid-cap definition in the Markets in Financial Instruments Directive (MiFID), a core EU rulebook for financial markets, allowing these companies to access “SME growth markets” and use simpler prospectus disclosure rules when raising money.
An SME growth market is a type of trading venue intended to make it easier for smaller firms to raise public funding under lighter requirements.
In other areas, MEPs backed changes affecting the EU’s Batteries Regulation, proposing that some due diligence policy review and publication requirements apply to small mid-caps every five years — or sooner if a significant change occurs — rather than every three years as set out in the Commission’s original proposal.
On fluorinated gases, or F-gases — greenhouse gases used in products such as refrigeration equipment — MEPs supported limiting the requirement to register in an EU portal to imports that trigger reporting obligations and to exports where a restriction exists.
The reporting thresholds cited were 10 tonnes of CO2 equivalent or more for hydrofluorocarbons, and 100 tonnes of CO2 equivalent or more for other fluorinated greenhouse gases.
The committees also backed applying the package to rules on the resilience of critical entities, requiring member states to support small mid-cap operators classed as “critical” as they meet obligations, and to trade defence instruments, with access intended to be easier for small mid-caps alongside SMEs.
Committee votes cleared mandates for negotiations with EU member states, with the Parliament saying final approval by the full chamber is planned for March before talks with the Council can begin.
