BETTER FINANCE provides feedback on an optional, digital “28th Regime”. If well designed, this new EU company framework could bridge corporate and securities law, boost attractiveness, reduce arbitrage, overcome investors’ home bias, and foster cross-border capital flows that strengthen the Capital Markets Union. But to succeed, the regime must avoid starting from the wrong end. Conflating private start-ups and public/IPO-ready companies risks blurring safeguards and exposing retail investors to unnecessary risks.
The EU should first prioritise harmonisation of listed/public markets, where millions of Europeans already invest and where fragmentation in corporate and securities law still drives up compliance costs, weakens investor protection, and limits SMEs’ access to capital. While we welcome one-off /centralised reporting principles, and Digital set-up tools, DLT should also improve efficiency and transparency.
Yet, BETTER FINANCE calls for a modular approach: private firms may benefit from standard simplified incorporation and flexible financing tools (e.g. symbolic capital, ESOPs, SAFE-type instruments) but tied to adequate safeguards. This means envisaging EU SAFE template, with harmonised solvency tests, directors’ liability, and reduced but key disclosures adapted to key funding stages (enhanced information when retail investors or scaling rounds are involved beyond VC).
Once firms seek public financing, they must convert into a truly harmonised EU public subject to full EU securities law with ESMA as a single supervisor. Notably, this framework ensuring equal hybrid AGMs access rights and votes (removal or EU-wide safeguards and models of multiple-vote shares) and pave the way to enforceable European collective redress.
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