European Parliament committees endorse small mid-cap category and propose thresholds of under 1,000 employees and up to EUR 200 million turnover

European Parliament committees voted to back proposals creating a new “small mid-cap” enterprise category between SMEs and large firms and to extend a range of SME-style exemptions to these companies to avoid sharp increases in compliance obligations when businesses outgrow SME thresholds. MEPs propose defining small mid-caps as having fewer than 1,000 employees and either up to EUR 200 million in turnover or up to EUR 172 million in total assets, alongside a five-year review of the thresholds and safeguards to avoid diluting SME support. The package would extend GDPR record-keeping exemptions to small mid-caps for data processing that is not high-risk, excluding sensitive data such as biometrics, ethnic origin, political opinions, religion, health, or criminal convictions. It would also update the Markets in Financial Instruments Directive definition to reduce administrative burdens and enable small mid-caps to access SME Growth Markets and use simpler prospectus disclosures under the updated Prospectus Regulation. Additional simplifications include lengthening the Batteries Regulation due diligence policy review cycle to every five years (or sooner after significant change), and narrowing F-gas Portal registration to imports subject to reporting (10 tonnes of CO2 equivalent or more of hydrofluorocarbons, or 100 tonnes of CO2 equivalent or more of other fluorinated greenhouse gases) and to exports where an export limitation exists; the proposals also cover support under the critical entities resilience framework and easier access to trade defence instruments. Committees authorised inter-institutional negotiations, with plenary endorsement of the mandates planned for March, after which talks with the Council can begin.