Giuseppe Vegas, Chairman of Consob (the Italian Securities and Exchange Commission) has suggested the creation of an European Agency for SMEs. On Monday, May 11, during his speech to the investors at Expo Milan 2015 in Rho, near Milan, Northern Italy, Mr. Vegas said that the agency’s main aim would be to provide a springboard for small and medium-size companies and to maintain close contact with international investors.
In order to open the doors of SMEs to foreign investors, the agency would ensure news coverage on unlisted SMEs, collecting and providing information on the companies’ budget data, reports and timely financial analysis through a single, public, information system.
“The city of Milan and the Expo site in particular is the ideal place to establish the headquarters of the new agency”, Mr. Vegas said. In doing so, Milan, Italy’s second largest city and financial main centre, would become a sort of European capital for SMEs.
During his speech, Mr. Vegas pointed out:
“Unlisted SMEs are neither required by law to certify their financial balance sheets nor to apply international accounting standards. Hence, the cost to obtain SMEs financial data to value them correctly could be higher than the expected returns even for the most sophisticated investors”.
It’s a case of a “market failure”, said Mr. Vegas. This failure is mainly due to the fact that for small enterprises, the costs for providing the necessary information to the investing community are hardly sustainable. Mr. Vergas concluded by saying that “only a public body, able to operate at European level and in a centralised way, could realize the economies of scale necessary to provide the required information to the investment community”.
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