The Capital Markets Union is an important element of the Commission's priority strategy to support jobs, growth and investment and is a key building block of the Investment Plan for Europe. The objective of the Capital Markets Union (CMU) is to diversify and amplify sources of finance and ensure that capital can move freely across borders in the Single Market and be put to productive use. Today’s report shows the progress already achieved in building a CMU since the launch of the Action Plan in September 2015.
The first measures are already having an impact on the ground: new rules have just entered into force to support investment by insurers and reinsurers in infrastructure projects. Our legislative proposal to restart securitisation markets in Europe was agreed in record time by Member States in December 2015. A proposal was also presented to simplify prospectus requirements and reduce burdens for companies issuing shares and bonds. The Commission hopes that these proposals will be agreed swiftly by the co-legislators. We have also carried out a cumulative assessment of the financial services legislation – the Call for Evidence –to check that our legislative framework is working to support growth across the EU.
But the work continues. We have launched a public consultation on business restructuring and insolvency in order to tackle some of the longer-term issues that are holding back jobs and growth in the EU. We will soon take further actions to promote personal pensions.
The Commission will shortly publish a report on the development of crowdfunding markets in the EU. We will also propose measures to stimulate European venture capital markets, including a revision of the venture capital legislation and work on a venture capital ‘fund of funds’. We will also launch a public consultation to gather views on how the passporting rules for the cross-border distribution of investment funds can be improved.
Commissioner Jonathan Hill, responsible for Financial Stability, Financial Services and Capital Markets Union said: "This report shows that we have made good on the pledges we set out back in September, when we launched the CMU action plan. We're on time and driving issues forward. Looking ahead, I want to start to tackle some of the longer-term issues: we have already launched a consultation on business restructuring and insolvency and we are going to shortly kick off work on laying the foundations for a stronger European personal pensions market. We will also bring forward a package of measures to stimulate European venture capital markets and launch a consultation to improve passporting rules for the cross-border distribution of investment funds. To maintain momentum, I will continue to report regularly on progress made and to back-up my policy measures with strong economic analysis."
In parallel with today’s CMU status report, we are also presenting a new edition of the European Financial Stability and Integration Review (EFSIR), which this year focusses on the CMU and identifies some promising developments in European capital markets. The EFSIR builds on the economic analysis that had supported the publication of the CMU Action Plan.
The CMU aims to support the development of alternative sources of finance, complementary to bank-financing - including venture capital, crowdfunding and market-based finance. The CMU also aims to create rewarding opportunities for institutional and retail investors in a more resilient, deeper and more competitive financial system.
On 30 September 2015 the Commission adopted an Action Plan on Building a Capital Markets Union (CMU). The action plan sets out a programme of 33 actions and related measures, which aim to establish the building blocks of an integrated capital market in the European Union by 2019.
The Action Plan is built around the following key principles:
- Creating more opportunities for investors: the CMU should help mobilise capital in Europe and channel it to companies, including SMEs, and infrastructure projects that need it to expand and create jobs. It should give households better options to meet their retirement goals.
- Connecting financing to the real economy: the CMU is a classic single market project for the benefit of all 28 Member States. Member States have a lot to gain from channelling capital and investment into their projects.
- Fostering a stronger and more resilient financial system: Opening up a wider range of funding sources and more long-term investment, ensuring that EU citizens and companies are no longer as vulnerable to financial shocks as they were during the crisis.
- Deepening financial integration and increasing competition: the CMU should lead to more cross-border risk-sharing and more liquid markets which will deepen financial integration, lower costs and increase European competitiveness.
Capital Markets Union: First Status Report
European Financial Stability and Integration Review (EFSIR): A focus on the Capital Markets Union Initiative