BETTER FINANCE provides feedback on an optional, digital-first “28th Regime” for companies. 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, either for public or private firms and markets.
BETTER FINANCE instead calls for a modular - two tracks - approach: private firms could benefit from simplified incorporation and flexible financing tools (e.g. symbolic capital, ESOPs, SAFE-type instruments) but always under adequate safeguards, including harmonised solvency tests, director liability rules, and proportionate disclosures adapted to each funding stage. Importantly, a public track should serve as a clear pathway to guide firms seeking public financing towards a harmonised EU public form, subject to EU securities/corporate law and ESMA supervision. Such track must ensure harmonisation delivers simplification by minimising cross-border frictions (i.e. EU listing segment). For investors, this must guarantee clarity, access to hybrid AGMs, equal voting rights (removal or EU-wide harmonisation of multiple-vote shares) and pave the way for enforceable European collective redress.
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