The Spanish government is lowering the requirements for going public to stem the drought of listed companies.

The Spanish government took the first step on Tuesday to try to revive the Spanish stock market, which has suffered from a drought of new listings for many years. In this regard, the executive branch approved a draft bill transposing several European directives with a clear objective: to make it easier for companies, especially SMEs, to go public. The reform directly addresses one of founders' main fears: the loss of political control of the company to external investors. To this end, the government has introduced two key measures. Until now, to go public, a company had to offer at least 25% of its capital, known as free floatWith the new regulations, that threshold drops to 10%. This allows the original owners to raise funds without having to sell almost a quarter of the company at once. Furthermore, the law opens the door to dual-voting shares. This mechanism allows certain shares, usually those retained by the founders, to have greater weight in decision-making than those sold to new investors. "What we are doing is reducing the risk of diluting the founders' stake," explained the Minister of Economy, Carlos Cuerpo, at the press conference following the cabinet meeting. Less bureaucracy for SMEs

The Socialist government also wants to reduce the costs of listing on the stock exchange. First, the threshold for issuing a share issuance that requires a complex prospectus is being raised from €8 million to €12 million. Another measure is the reduction and simplification of transparency requirements for smaller companies, with the aim of facilitating their participation in the stock market. Finally, alternative investment funds will also be allowed to grant loans to these companies, strengthening their position as an alternative to traditional banks and increasing transparency in the fees charged to intermediaries.