A Green Paper was published by the European Commission on 18 February 2015, in relation to possible measures for creating a single deeper and more integrated market for capital for all EU member states by 2019.

Amongst others, the Green Paper identifies the following key principles which should underpin a Capital Markets Union:

  • It should create a single market for capital for all 28 EU member states by removing barriers to cross-border investment within the EU and fostering stronger connections with global capital markets;
  • It should be built on firm foundations of financial stability, with a single rulebook for financial services which is effectively and consistently enforced; and
  • It should ensure an effective level of investor protection.

The European Commission seeks views on the following topics:

  • Is there any value in developing an EU-level accounting standard for small- and medium-sized companies traded on multilateral trading facilities?
  • The main company law, insolvency law and corporate governance obstacles to integrated capital markets.
  • Are there any changes to the rules on securities ownership which could contribute to the creation of better integrated capital markets within the EU?
  • The powers of the European Supervisory Authorities to supervise capital markets.
  • Mechanisms to improve the functioning and efficiency of equity markets.

The consultation closes on 13 May 2015. On the basis of the outcome of this consultation, the European Commission will adopt an Action Plan later in 2015 identifying the actions necessary to achieve the following objectives:

  • Improve access to finance for all businesses and infrastructure projects across Europe by removing barriers to cross-border investments;
  • Help small and medium sized enterprises ("SMEs") raise finance as easily as large companies; and
  • Diversify the funding of the economy and reduce the cost of raising capital.

A copy of the Green Paper is available at: http://ec.europa.eu/finance/consultations/2015/capital-markets-union/docs/green-paper_en.pdf.

A copy of our client publication: "Capital Markets Union: The EU's Next Focus for Reforms" is available at: http://www.shearman.com/~/media/Files/NewsInsights/Publications/2015/04/Capital-Markets-Union-the-EUs-Next-Focus-for Reforms-FIA-040115.pdf .

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