Medium-sized companies operating within the European Union must comply with a series of financial rules and regulations, which aim to improve transparency and encourage free competition in the sector. However, some of these rules and regulations may affect the operations of medium-sized companies. companies. Next, we will find out which financial rules and regulations may affect medium-sized companies in the European Union.
Tax Directives
The European Union’s tax directives were developed with the aim of creating a more integrated and fair tax environment. These directives govern corporate taxation, which includes rules on cross-border taxation and tax harmonization within the European Union.
Second Payment Services Directive (PSD2)
PSD2 promotes competition and innovation in the payments sector, facilitating the entry of new players (FinTech) and allowing interoperability between banks and payment services. Medium-sized companies that operate in e-commerce or use electronic payment systems may be affected by this regulation since, while they can take advantage of new opportunities, they must also adapt to new security standards, which may mean updating their security and compliance systems.
Market Abuse Regulation (MAR)
This regulation establishes clear rules to combat market abuse, insider trading, market manipulation, and incorrect or incomplete disclosure of relevant information.
For example, medium-sized companies listed on regulated EU markets are required to comply with strict disclosure requirements. This means that they must publish inside information as soon as possible to prevent its misuse.
Managers of medium-sized companies, as well as employees or professionals associated with them, must report any transaction they carry out with company securities (shares, bonds, etc.), especially if the said value exceeds a certain threshold. This measure seeks to prevent some managers or employees from taking advantage of their position to gain an advantage in the market with non-public information.
Anti-Money Laundering (AML) Directives
Anti-Money Laundering (AML) directives were developed with the aim of preventing financial crimes and protecting the integrity of the European financial system. This type of directive can affect medium-sized companies, especially those with limited capital, as it requires companies to make investments and implement measures to prevent money laundering and terrorist financing, which can significantly affect their financial operations, compliance procedures, and capital funds.
Corporate Sustainability Reporting Directive (CSRD)
Through the Corporate Sustainability Reporting Directive (CSRD), the European Union requires medium-sized companies to submit updated information on the environmental and social impact that their operations may have, which promotes transparency and accountability, in addition to allowing companies to be aligned with global sustainability objectives.
This type of directive can affect medium-sized companies, since to comply with sustainable business practices and improve the quality of sustainability reports, companies are forced to invest in preventive and corrective measures, such as staff training, and technology that allows their operations to be more sustainable, among others.
General Data Protection Regulation (GDPR)
Although not specifically a financial regulation, the GDPR has a direct impact on mid-sized businesses that manage personal data, including customer data in financial services, as it imposes strict obligations on how businesses collect, process, and store their users’ personal information. This forces mid-sized businesses to invest in technology and data management systems, as well as training their employees to comply with strict data protection regulations.
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