On Monday 20 November, the Commission's expert group on the corporate bonds market published its recommendations to improve the development of these markets within the EU.
As readers will be aware, corporate bonds are debt instruments that companies issue and sell to investors to raise capital. They give companies access to diversified funding sources and also constitute new investment opportunities for European citizens, the Commission explains. In Europe, however, corporate bonds represent only 4% of the total financing of European businesses, compared to 11% in the United States, the report stresses.
The experts have made 22 recommendations, responding to six aims: - making issuance easier for companies; - increasing access and options for investors; - ensuring the efficiency of intermediation and trading activities; - fostering the development of new forms of trading and improving the post-trade environment; - ensuring an appropriate level of information and transparency; - improving supervisory and policy framework.
The experts' main concern is the fact that in several member states, corporate bonds are regulated in the same way as equity. The experts therefore call upon the European and national authorities to adapt the regulatory approaches to the various characteristics and functioning of these markets. They also recommend increasing supervisory convergence and streamlining legislative overlaps and inconsistencies.
The experts also consider that there is an urgent need to develop a consolidated database for corporate bonds, to help investors to make more enlightened choices.
Finally, there are several recommendations aiming to make it easier for companies to issue bonds, for instance by giving the national development banks the necessary mandate in order to help SMEs to issue these bonds.
The recommendations will be discussed at a public hearing in Brussels on Friday 24 November, but there will also be a public consultation in early 2018, to gather the opinions of a broader public. They will feed into the work to be carried out by the Commission, which intends to present communication in autumn 2018 on European actions to improve the functioning of the corporate bonds markets. The recommendations may be consulted at: http://bit.ly/2mLuBpP . (Original version in French by Marion Fontana)