On 27 March 2014, the European Commission published a communication to the European Parliament and the Council on the long-term financing of the European economy. The communication is a follow-up to the Commission's green paper on the same subject which was consulted on a year ago.
To meet the long-term financing needs of the European economy, the Commission is proposing a set of concrete actions focusing on:
- mobilising private sources of long-term financing;
- making better use of public funding;
- developing European capital markets;
- improving SMEs' access to financing;
- attracting private finance to infrastructure delivering Europe 2020 (the EU's ten-year growth and jobs strategy); and
- enhancing the wider framework for sustainable finance.
The Commission proposes to develop European capital markets through:
- the Commission delegated act provided for in Markets in Financial Instruments Directive ("MiFID") 2, which will ensure that the requirements for SME growth markets minimise the administrative burden for issuers on these markets while maintaining high levels of investor protection;
- undertaking a study on whether, following the improvements introduced by MiFID 2 for non-equity securities, further measures are necessary to enable the creation of a liquid and transparent secondary market for the trading of corporate bonds in the EU;
- assessing the implications and effects of the rules of the Prospectus Directive by the end of 2015. This will include in particular an assessment of the proportionate disclosure regime for SME issuers and companies with reduced market capitalisation; and
- conducting a study by the end of the year to map out the private placement markets in Europe against other locations/practices, analyse their key success drivers and develop policy recommendations on how this success can be more widely replicated in the EU.
To enhance the wider framework for sustainable finance, the Commission's proposed measures include:
- considering a proposal for the revision of the Shareholder Rights Directive to better align long-term interests of institutional investors, asset managers and companies;
- considering a recommendation aimed at improving the quality of corporate governance reporting, a report on incentives for institutional investors and asset managers to take better account of environmental, social and governance information in their investment decisions and a study on fiduciary duties and sustainability; and
- assessing employee share ownership across the EU with a view to identifying problems with and addressing cross-border implementation of such schemes.
The communication is available at:
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