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Law360, London (February 16, 2021, 12:00 PM GMT) -- European Union member states have pushed through amendments to the bloc's capital markets rules in a move to help businesses raise money on financial markets amid the economic crisis created by COVID-19.
The Council of the EU, made up of member state government ministers, said on Monday that it has adopted the capital markets recovery package to help restart the bloc's economy.
The amendments to the updated Markets in Financial Instruments Directive, known as MiFID II, and the Prospectus Regulation are designed to make it easier for companies to raise money on financial markets as they attempt to recover from the pandemic.
The MiFID II rules have been modified to reduce the amount of information that investment companies must provide to professional investors and some retail investors. The directive, which came into force in 2018, provides guidance on trading, data recording and transparency in the market.
"The MiFID II rules have been amended to simplify information requirements in a targeted manner, while safeguarding investor protection," the council said on Monday.
The changes to the EU's prospectus rules will also allow companies to submit shorter documents to investors until the end of 2022. The shortened prospectus, which businesses must publish when they issue shares and bonds, will make it easier and quicker for them to raise cash while still providing enough information to investors, the council said.
The rules will come into force when they have been published in the Official Journal of the EU, which the council said would be before the end of February. Member states will be required to transpose the MiFID II changes into their national law.
The European Parliament is due to vote on amendments to Europe's securitization framework in March. Securitization allows banks to gather up loans and turn them into securities that can be traded on capital markets, which frees up capital that banks can lend.
The council said the proposal will allow banks to bundle non-performing loans into their securitizations. This will help banks to offload non-performing loans, which a borrower fails to pay installments or interest on after more than 90 days.
--Editing by Joe Millis.
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