30 September 2015 saw the publication of the Capital Markets Union Action Plan by the European Commission in keeping with its aim of creating stronger capital markets across the 28 member states. The Commission looks to remove barriers to cross-border investment and lower costs of funding.
Following consultations earlier this year, which yielded universal support for the importance of building a CMU, the Commission found that a step by step approach was preferred in developing a CMU. As such, no single measure will be used to deliver a CMU, rather a range of steps will be adopted to create a cumulatively significant impact.
The framework provided by the CMU Action Plan sets out 33 measures and legislative initiatives to build a CMU by 2019. The building blocks and deadlines set out in the Action Plan have been well received, namely because they provide a timeline ensuring that a move towards a CMU retains momentum whilst ensuring progress which will be visible and measureable. The CMU Action Plan identifies the following six key areas for priority action:
- financing for innovation, start-ups (in particular crowdfunding) and non-listed companies;
- making it easier for companies to enter and raise capital on public markets;
- investing for the long term, infrastructure and sustainable investment;
- fostering retail and institutional investment;
- leveraging banking capacity to support the wider economy; and
- facilitating cross-border investing.
Consultation will also take place to identify how best to overcome inefficiencies and barriers to deeper capital markets – whilst the European economy can rival the economy of the United States, its equity markets are less than half the size.
Further consultations will take place where necessary and, as announced, will cover areas including an EU framework for covered bonds, financial services and venture capital and social entrepreneurship. The Commission will also undertake 'impact assessments' of the range of options available to achieve the objectives identified for each of the priority actions. The Commission has encouraged follow up by market participants and financial institutions across all 28 member states.
It is clear that, as the CMU takes shape, the Commission seeks to strengthen Europe's economy and stimulate investment, both from within Europe and internationally, by ensuring more integrated and accessible capital markets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.