14 September 2016

Completing the Capital Markets Union – Commission accelerates reform

Today's Communication sets out the steps needed to make sure the CMU has a tangible impact on the ground as soon as possible. The Commission calls on the European Parliament and the Council to rapidly finalise the first wave of proposed measures and will accelerate the delivery of the next set of actions. The CMU Action Plan launched a year ago set out actions to put in place the building blocks for the CMU by 2019 at the latest. [...]

Finalising the first CMU measures

The swift implementation of the securitisation package has the potential to quickly generate additional funding in the real economy: the Council has already reached an agreement on Simple, Transparent and Standardised (STS) securitisation and progress should now be made urgently in the European Parliament. STS securitisations will free up capacity on banks’ balance sheets and provide investment opportunities for investors. If EU securitisations could be revived – safely – to pre-crisis levels, it could fuel the economy with EUR 100 billion and boost financial stability. 

The Commission will do its utmost to support the co-legislators in finding an agreement on the modernisation of the Prospectus rules by the end of the year. This will increase access to capital markets, in particular for smaller companies.

The Commission also calls on the European Parliament and the Council to finalise the proposal to strengthen venture capital markets and social investments by the end of 2016. This will boost investment into venture capital and social projects and make it easier for investors to fund small and medium-sized innovative companies. In addition, the Commission intends to take forward a programme to support the development of national and regional capital markets in the Member States.

Accelerating the next phase of CMU

The Commission will now rapidly take forward the next phase of other key CMU actions. Differences in insolvency regimes present a long standing barrier to the development of capital markets in the EU. The Commission will present shortly a proposal on business restructuring and insolvency to speed up recovery of assets and give companies a second chance if they fail the first time around.  

We will knock down tax barriers that are hampering the development of capital markets. We will encourage Member States to remove withholding tax barriers and encourage best tax practices in promoting venture capital, such as increasing equity financing over debt. This will encourage equity investments and benefit financial stability as companies with a stronger capital base would be less vulnerable to shocks. The Commission intends to issue a proposal on the debt-equity bias in November, in the context of its proposal on the CCCTB, and calls on the Council to adopt that measure as rapidly as possible.  The Commission will also amend insurance and banking legislation by the end of the year, to further unlock private investment in infrastructure and SMEs.

Developing fresh CMU priorities

The Commission will develop further priorities. It will support the development of personal pensions markets and other retail financial services, so as to encourage Europeans to put their savings to better use.

[...]The Commission will work to develop a co-ordinated policy approach that supports the development of FinTech in an appropriate regulatory environment. 

[...]The Commission will consider, in close consultation with the European Parliament and the Council, the further steps in relation to the supervisory framework that are necessary to reap the full potential of CMU.

The Commission will continue to monitor developments and identify further actions that are necessary to develop the CMU in the context of the 2017 CMU mid-term review that will soon be launched. [...]

Full press release

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