As outlined in a Feature Piece in Edition 15 of this SCM Briefing, the European Commission published a detailed Green Paper on "Building A Capital Markets Union" (CMU) in February 2015, which was supplemented by two Consultation Documents on developing an EU framework for Simple, Transparent and Standardised (STS) securitisation, and on a Review of the Prospectus Directive. The Commission then held a Public Hearing on CMU in Brussels on 8 June 2015, during which the EU Commissioner for Financial Stability, Financial Services and Capital Markets, Jonathan Hill, gave a speech which further outlined the next steps in developing the CMU. Following close of the consultation(s) on 13 May 2015 (to which the Commission received over 700 responses, and over 120 to the STS securitisation paper alone, including from industry associations, regulatory bodies and a wide range of market participants), the Commission plans to publish a CMU Action Plan in September 2015, with several "early actions" to be released within a few weeks of the Action Plan, as follows:
- Securitisation: following broad market support for the Commission's STS securitisation proposals, a "comprehensive package" (establishing a framework for securitisation products that are simple and transparent) will be released alongside "updated calibrations" for Solvency II and the Capital Requirements Regulation as part of a new legislative proposal that will also provide an opportunity to improve the way existing due diligence and disclosure rules currently operate;
- Solvency II: "infrastructure" as an asset class will be incorporated into the Directive (as investments in specialist infrastructure funds should receive favourable capital treatment) and revised calibrations will be proposed (via amendments to the Solvency II Delegated Acts); and
- Prospectus Directive: concrete, "radical" proposals for a revision of the Prospectus Directive will be issued in the autumn and will be "fast-tracked" to bring about a lighter-touch burden on issuers which are already listed on a regulated market, and to take a more joined-up approach to information that is already published under other rules.
Efforts will also be made to review the venture capital legislation, take into account national differences in the treatment of withholding tax, undertake further work on legislation for pension funds, issue a Green Paper on access to retail financial services, and further promote supervisory convergence while tackling cross-border barriers to investing. We will provide a further update with details once the Commission's CMU Action Plan is released in September.