On September 14, the European Commission (Commission) published a communication (Communication) in relation to the Commission’s Capital Markets Union (CMU) Action Plan. The Communication is addressed to the European (EU) Parliament, EU Council, EU Central Bank and the EU Economic and Social Committee and the Committee of the Regions, and calls for reforms under the CMU Action Plan to be accelerated.
As mentioned in previous updates, the Commission first launched the CMU Action Plan on September 30, 2015. The CMU Action Plan aims to facilitate the development of a single market for capital in the European Union, by supporting cross-border risk sharing, identifying and removing cross-border barriers to investment, and diversifying alternative sources of funding available for investors. In April 2016, the Commission published its first status report on work under the CMU Action Plan, detailing work achieved to date as well as future planned initiatives.
The latest Communication published by the Commission calls for the first phase of the CMU Action Plan to be implemented as soon as possible. The Commission notes that settling and implementing: 1) proposals for an EU framework for simple, transparent and standardized securitization will quickly generate additional funding and free up bank balance sheets; 2) reforms to modernize EU prospectus rules will bolster access to capital markets for smaller entities; 3) proposals to revise the Regulation on EU venture capital funds and the Regulation on EU social entrepreneurship funds will increase investor access to small and medium-sized companies; and 4) proposals for a Regulation to establish the structural reform support program will assist to launch projects to develop national capital markets at the start of 2017.
In addition, the Communication calls for the next phase of work under the CMU Action Plan with respect to national insolvency regimes and taxation to be accelerated, and for the next steps and priorities of the CMU Action Plan to be developed (including in relation to work to remove barriers to cross-border distribution of investment funds, and also, barriers in the post-trading environment), among others. The Communication also contains an annex detailing updates on the status of actions contained in the CMU Action Plan (which follows updates provided on work achieved to date in the first status report published in April 2016).
The Commission’s CMU Action Plan is available here.
A copy of the Communication is available here.