Commission Proposes New Measures to Boost Europe's Capital Markets

                                                                                                  25.11.2021

The European Commission ("Commission”) has adopted a package of measures to improve the ability of companies to raise capital across the EU and ensure that Europeans get the best deals for their savings and investments. One year on from the 2020 Capital Markets Union Action Plan, the Commission is delivering on its commitments, proposing measures to boost European capital markets. This will help Europe's economic recovery from the COVID-19 crisis, as well as the digital and green transitions. In addition, the Commission has put forward a Communication setting out the actions it will take next year to spur the market.

The adopted legislative proposals:

  • The European Single Access Point (“ESAP”)
  • Review of the European Long-Term Investment Funds (“ELTIFs”) Regulation
  • Review of the Alternative Investment Fund Managers Directive (“AIFMD”)
  • Review of the Markets in Financial Instruments Regulation (“MiFIR”)

Building on the actions announced in the 2020 Capital Markets Union (“CMU”) Action Plan, the Commission will follow up in 2022 with more CMU actions, including a proposal on listing, an open finance framework, an initiative on corporate insolvency and a financial literacy framework.

 

The CMU Communication – a look forward to 2022

The Communication ‘Delivering one year after the Action Plan' looks at progress on the September 2020 CMU Action Plan and provides an overview of today's proposals. All of these proposals are designed to contribute to achieving the objectives of the CMU. Progress on other CMU actions continues, paving the way for further ambitious deliverables. The Communication looks ahead to 2022 and sets out the legislative proposals and other initiatives that can be expected:

  1. A European Single Access Point (ESAP) for Financial and Non-Financial Information

In order to make sound investment decisions, investors in capital markets need information about the companies they are interested in, ideally in a digital format. Companies are required to publish financial and sustainability-related information under EU law. But today, access to this information is scattered across Member States and is not very digitally useable. The ESAP will improve this situation, by giving easy digital access to companies' financial and sustainability-related information, as well as on investment products.

  1. European Long-Term Investment Fund (ELTIF) framework review

ELTIFs have a crucial role to play by providing a dedicated investment product to mobilise capital for the financing of long-term projects such as transport infrastructure, sustainable energy generation or distribution, or social infrastructure (such as housing for older people or hospitals).

  1. Alternative Investment Fund Managers Directive (AIFMD) review

The Commission is reviewing the application and the scope of the AIFMD, as foreseen in article 69 of this Directive. While the review shows that in principle the AIFMD framework works well, some targeted changes were needed to better integrate the market for alternative investment funds, ensure investor protection and better monitor risks to financial stability posed by AIF.

  1. Review of the Markets in Financial Instruments Regulation (MiFIR) (consolidated tape) and Markets in Financial Instruments Directive (MiFID)

The aim of the review is to remove the main obstacles to the creation of a consolidated tape, enhance transparency and increase competitiveness of EU markets in the global landscape. The main objective is to introduce an EU-wide consolidated tape for shares, bonds, exchange-traded funds (ETFs) and derivatives.

The introduction of a consolidated tape will eliminate the obstacles that currently prevent a consolidated view of  information across the EU. While the Commission recognises that large orders should benefit from exemptions to the general transparency framework, this is much less the case for small orders. That is why the proposal also aims to ensure that small orders are always transparent, regardless of whether they are executed on a multilateral platform or via investment banks. Finally, the review will introduce measures to increase the competitiveness of EU market players in the global markets, by fine-tuning the derivative trading obligation and the share trading obligation, and by removing the open access obligation. Better information on prices for financial investments in shares, ETFs and bonds makes the Union more attractive for international investors.

 

You can reach the further information via the links below:

https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_6252

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6251

 

Kind Regards,

Zumbul Attorneys at Law

info@zumbul.av.tr