On 8 June 2017, the Commission published its mid-term review of the 2015 Capital Markets Union ("CMU") action plan. The review states that approximately two-thirds of the actions anticipated by the plan have been delivered since its inception. The Commission is now reframing the action plan in response to the results of the recent consultation (which it launched in January 2017 and which was covered in the April 2017 edition of this newsletter) and to other challenges in the market, including the UK's anticipated departure from the single market. The Commission has identified a number of new priority actions, which are:

  • to strengthen the powers of ESMA;
  • to deliver a more proportionate regulatory system for small and medium sized enterprises listing on public markets;
  • to strengthen the EU's leading role in pioneering sustainable investment;
  • to support cross-border investment; and
  • to support the development of local capital market ecosystems. These actions are additional to those already identified still outstanding in the action plan.
  • The responses to the Commission's consultation, which fed into the mid-term review, identified a number of specific challenges faced by the CMU, including:
  • the requirement for more risk finance to support the innovation and growth of start-up and scale-up firms;
  • the small size of public equity and debt markets in some member states relative to other developed economies;
  • the relative cost and complexity of accessing public markets, especially for small and medium sized companies;
  • a general contraction on the amount of new lending to EU business by EU banks since the financial crisis;
  • inadequate investment by insurance companies and pension funds in risk capital, equity and infrastructure;
  • low engagement on the part of retail investors with capital markets; and
  • long-standing obstacles preventing EU cross-border investment. In the Commission's view, it will have made sufficient progress on achieving these measures so as to lay the foundations for a true CMU by 2019. The full text of the Commission's review is available at:
  • https://ec.europa.eu/info/sites/info/files/communication-cmu-mid-term-review-june2017_en.pdf

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