While the European Commission's High Level Forum on the Capital Markets Union (CMU) delivered its interim report at the end of February (see EUROPE 12430/18), on Monday 2 March the European Task Force on Initial Public Offering (IPO) presented its recommendations for the future of the CMU.
Often seen as an effective way to raise capital, an IPO is a process whereby, for the first time, a company offers publicly listed shares to the public.
Established in 2014, the IPO Task Force had already made initial recommendations in 2015 but, alarmed by the drop in IPOs in the EU, Accountancy Europe, the CFA Institute, FESE and the EBRD have taken the initiative to relaunch the Task Force in 2019 to determine what steps can be taken to reverse this trend. It is currently chaired by MEP Caroline Nagtegaal (Renew Europe, Netherlands) and is composed of business representatives and independent experts.
The report aims to "guide the European Commission's work on the Capital Markets Union", which should present a new action plan after the summer of 2020, explained Johan Barros, Head of Financial Services at Accountancy Europe.
"It contains recommendations to create a strong and resilient European framework for withholding taxes that would promote cross-border investment. It also contains important recommendations to expand the financing opportunities available to European SMEs", he said.
In particular, the report recommends improving IPO Ecosystems by creating a more flexible regulatory environment for SMEs. It further suggests increasing the eligibility threshold to €1 billion of market capitalisation for SME growth markets.
The task force is also in favour of a regulatory framework that promotes technological innovation and in particular clarifies the application of the existing financial regulations to cryptoassets.
Finally, it calls on the European Commission to develop a vision of long-term sustainable finance that is proportionate to the size of companies and ensures a level playing field between public and private procurement.
See report: https://bit.ly/2TsZ1u5 (Original version in French by Marion Fontana)