Nearly two years after the launch of the action plan for the Capital Markets Union (CMU), the European Commission on Thursday 8 June presented new initiatives aiming to ensure that this reform programme remains fit for purpose.
“The new measures presented here today renew and reinforce the Commission’s commitment and set us on an irreversible path towards the CMU”, Jyrki Katainen, the European Commissioner for Jobs, Growth and Investment, told a press conference.
The mid-term review takes stock of progress so far in the implementation of the 33 actions in the initial plan of September 2013 (see EUROPE 11399). The Commission reports that it has already completed 20 of these actions, stressing the agreements in principle reach last week on two major proposals: the legislative package on securitisation and the reform of venture capital funds (see EUROPE 11799).
If the 2015 actions are more necessary and relevant than ever, the development of financial technologies, social and environmental challenges, the diversity of capital markets in Europe and, of course, the forthcoming withdrawal of the United Kingdom from the single market are new obstacles to European integration that call for a re-examination of the CMU programme, the Commission explains in a press release.
“As we face the departure of the largest EU financial centre, we are committed to stepping up our efforts to further strengthen and integrate the EU capital markets”, said the European Commissioner for Financial Services, Valdis Dombrovskis.
As EUROPE announced in a previous article (see EUROPE 11793), the Commission has defined nine new priority actions on top of the existing timetable of actions to be set in place up to 2019: - strengthen the powers of the European Securities and Markets Authority to promote the effectiveness of consistent supervision; - deliver a more proportionate regulatory environment for SME listing on public markets; - review the prudential treatment of investment firms; - assess the case for an EU licensing and passport framework for FinTech activities; - present measures to support secondary markets for non-performing loans; - ensure follow-up to the recommendations of the High-Level Expert Group on Sustainable Finance; - facilitate cross-border distribution and supervision of UCITS and alternative investment funds (AIFs); - provide guidance on existing EU rules for the treatment of cross-border EU investments; - propose a comprehensive EU strategy to support local and regional capital market development.
The relaunched CMU will be geared strongly to green and sustainable financing, Commissioner Katainen announced. The revised programme will review the current financial framework to redirect flows of private capital into more sustainable investments. A few specific examples of measures have already been proposed, such as the inclusion of environmental, social and governance criteria in the decision-making process as fiduciary obligations of asset holders and managers – a measure warmly welcomed by the NGO WWF. We want the EU to be a global centre of gravity for green investments, he added.
These new measures were hailed by several financial organisations, including the Association for Financial Markets in Europe, Invest Europe and Better Finance, although they called on the Commission to show greater ambition to restore confidence in the capital markets and investment products.
Insurance Europe was of the same mind, as it considers that the changes made by this revision are limited and do not reflect the actual risk facing insurance companies when investing in a broad range of long-term assets.
The European Banking Federation (EBF) said that other specific actions were required, for instance on insolvency, financial education and the implementation of the securitisation rules, stressing that on these points, the banking industry “is already playing its part”. (Original version in French by Marion Fontana)