Response to the European Commission's communication on a simplified business environment for companies in the areas of company law, accounting and auditing

The Exchange has responded to the European Commission's communication on a simplified business environment for companies in the areas of company law, accounting and auditing.

Our response focuses on one aspect – the potential repeal of the second company law directive and the impact upon pre-emption rights. Pre-emption rights are highly valued by investors and have received strong support in the UK. We believe there is a strong case for retaining the pre-emption rights requirement at EU level.

Whilst we do not support repeal of the provisions on pre-emption rights, we do agree that at least some review of the capital maintenance system under the Second Company Law Directive is necessary, to ensure that business is not unduly constrained by outdated or ineffective regulations.