Shearman & Sterling LLP | FinReg | European Commission Sets out Capital Markets Union Action Plan
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  • European Commission Sets out Capital Markets Union Action Plan

    The European Commission has published a Communication to EU bodies on its Capital Markets Union Action Plan. The CMU is an EU initiative which aims to enhance and further integrate the capital markets of EU Member States. An action plan to develop the initiative was first adopted in 2015 and has been commented upon and updated since then. The Commission's Communication sets out the latest Action Plan, and is accompanied by a Q&A. It follows the recommendations of the High-Level Forum on the CMU, which proposed 17 key recommendations for the CMU, and the Commission's Roadmap on the CMU which set out details of the Commission's proposed Action Plan for comments by interested parties.

    There are three key pillars to the Commission's latest CMU Action Plan, together with 16 proposed measures to help achieve those key objectives:
    1. Pillar 1 – Support a green, digital, inclusive and resilient economic recovery by making financing more accessible to European companies. Measures to achieve this include making companies more visible to cross-border investors, supporting access to public markets, supporting vehicles for long-term investment and encouraging more long-term and equity financing from institutional investors.
    2. Pillar 2 – Make the EU a safer place for individuals to save and invest long-term. Measures to achieve this include improving EU citizens' financial literacy, building retail investors' trust in capital markets and supporting EU citizens in their retirement. 
    3. Pillar 3 – Integrate national capital markets into a genuine single market. Measures to achieve this include alleviating the tax associated burden in cross-border investment, making the outcome of cross-border investment more predictable with respect to insolvency proceedings, facilitating shareholder engagement and developing cross-border settlement services.

    The Commission also notes that the coronavirus pandemic has made the consolidation of the Capital Markets Union even more urgent, given the role banks will play in providing financing to sustain the recovery of the EU economy.

    The Commission has simultaneously published Communications on its Digital Finance Strategy and Retail Payments Strategy for the coming years.

    View the Commission's new Action Plan and Q&A on the CMU.

    View details of the High Level Forum's recommendations on the CMU

    View details of the Commission's Roadmap on the CMU.

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    TOPICS: COVID-19Securities