The European Commission has unveiled a significant regulatory proposal: the introduction of a dedicated category for Small Mid-Caps (SMCs) mid-sized companies that have not, until now, qualified for certain regulatory exemptions available to SMEs.
The European Commission has proposed changes to the GDPR, particularly revising Article 30(5) on the obligation to maintain Records of Processing Activities (RoPA). The proposal increases the employee threshold for exemption from 250 to 750 employees, unless the data processing involves a "high risk" to individuals’ rights, as outlined in Article 35. This change aims to ease the compliance burden for medium-sized businesses and support innovation.
What is a Small Mid-Cap (SMC)?
Under the proposal, a company will be considered a Small Mid-Cap if it meets the following criteria:
- Fewer than 750 employees
- And either:
-
- Up to €150 million in turnover, or
- Up to €129 million in total assets
It is estimated that nearly 38,000 companies across the EU would fall under this new classification.
What are the benefits?
For the first time, these companies would become eligible for certain existing SME benefits, including:
- Specific derogations under the General Data Protection Regulation (GDPR).
- Simplified listing requirements, facilitating easier and more cost-effective access to capital markets for SMCs.
This initiative acknowledges the unique challenges faced by companies that are too large to qualify as SMEs, yet not large enough to operate under the same regulatory conditions as major enterprises.
Source: FEBIS/MLex
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