On Wednesday, three European Parliament committees endorsed proposals to introduce small mid-cap enterprises (SMCs) and extend exemptions currently available to small and medium enterprises (SMEs). This initiative aims to prevent significant increases in a company’s obligations when it exceeds the SME threshold.
The new classification defines SMCs as companies with fewer than 1,000 employees and either a turnover of up to €200 million or total assets of up to €172 million. MEPs stress that support for SMEs should remain strong, following a “think small first” principle, with thresholds reviewed every five years.
Under the new law, current SME exemptions from certain General Data Protection Regulation (GDPR) record-keeping will extend to SMCs for non-high-risk data processing, while sensitive data processing remains excluded. The revised Markets in Financial Instruments Directive (MiFID) aims to reduce administrative burdens for SMCs and simplify access to SME growth markets.
Additionally, the Batteries Regulation will cover SMCs regarding battery due diligence policies, with updates required every five years rather than every three. MEPs seek to limit F-gas registration requirements for SMEs and SMCs to significant imports and exports, addressing the disproportionate burden on smaller enterprises.
Finally, the package includes legislation on the resilience of critical entities, ensuring support for SMCs and easier access to trade defence instruments.
The economics and civil liberties committees approved changes to MiFID and the Resilience of Critical Entities Directive, with 98 votes in favour and 6 against. They also authorised negotiations with 102 votes in favour. Additionally, these committees, along with the environment committee, adopted changes to the GDPR and regulations on prospectuses, fluorinated gases, batteries, and trade defence instruments, with 158 votes in favour. Once the European Parliament plenary endorses these mandates in March, negotiations with the Council can begin.
