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Capital Markets Union

(CMU)

Background The CMU Action Plan of September 2015 was built around the following key 1. Adopting and promoting a capital market that offers saving products to serve citizens’
principles: needs and that allocates capital to value creating investments in the real, innovating and
sustainable economy.
The European Union defines the CMU • Creating more opportunities for investors; 2. Building/strengthening an integrated, competitive, deep and liquid European Capital
as “ways of reducing fragmentation • Connecting financing to the real economy; Market, to maintain the EU as one of the top 2 financial centres of the world.
• Fostering a stronger and more resilient financial system;
in financial markets, diversifying
• Deepening financial integration and increasing competition. Also in October 2019 the European Commission launched the concept of a High Level Forum
financing sources, strengthening cross on capital markets union which is to propose targeted policy recommendations for future CMU

border capital flows and improving The Action Plan contained a list of actions and (non-) legislative initiatives, actions, to ensure that citizens and businesses can access capital markets across the EU on
such as on personal pensions or sustainable finance. Indeed, many current equal terms and irrespective of their geographical location.
access to finance for businesses,
legislative proposals, for example, the PEPP Regulation, the proposals on
particularly SMEs”. A Green Paper
sustainable finance or the ESAs review are main building blocks of the CMU.
was published in February 2015 in In March 2020 the CMU High-Level Forum published its interim report, stating that the following

this respect, followed by an Action The 2017 CMU Mid-Term Review set out priority actions and legislative measures (among others) could be envisaged to complete the CMU:
proposals on which the Commission wanted to move quickly (for instance,
Plan in September 2015. The follow-
the review of the prudential regime for investment firms and the PEPP - To steer citizens towards long-term investment products,
up work consisted of a Mid-Term proposal) and the 2018 Communication (“Completing the Capital Markets - To facilitate access to high-quality advice,
Review in 2017, a Communication to Union by 2019 - time to accelerate delivery), contained amongst others - To improve access to simple and transparent investment products,
further Action Plans on Sustainable Finance and Fintech. - To improve access to trustworthy financial advice, including genuinely independent
accelerate delivery in March 2018 and
advice.
a progress report in March 2019. With
In March 2019, the Commission published a Communication on the CMU:
regard to CMU, BIPAR stressed the “Progress on building a single market for capital for a strong economic and On 10 June 2020, the HLF published its final report. It makes (among many other
need for the EU to focus on initiatives monetary union”. This 2019 Progress Report takes stock of the completion of recommendations and as expected) recommendations to complete the CMU with regard
the building blocks of the CMU, stating that the Commission has now tabled to fostering retail investment. Examples of the recommendations made for this topic to the
that reduce administrative burden for
all envisaged legislative proposals and stressing the need for the European Commission include:
(small) firms. BIPAR also stated that, Parliament and the Council to accelerate work on the pending proposals
to remain competitive and attractive, to ensure their completion by the end of the legislative cycle. Finally, the - to examine consistency of IDD IBIPs rules with MiFID rules such as ban on commission
Commission adds that legislation alone will not deliver the CMU. Member for independent advice for IBIPs;
the EU must avoid overregulation,
States, national authorities and private stakeholders all play a vital role in - to examine the role of inducements for the adequacy of advice,
that there is a need for stability and
building the CMU. Future action will need to reflect the impact on capital - to examine how transparency of inducements can be further improved;
supervision must be tailored for the markets of the UK’s departure from the EU and other short or medium- - to introduce in IDD and MiFID certificates to prove training;
sector. Currently a High Level Forum term economic and societal challenges (such as climate and technological - to introduce a pan-European quality mark (label) for European financial advisors to be
developments). used on voluntary basis;
on capital markets union is preparing
- to review asap the PRIIPs Regulation;
targeted policy recommendations for In May 2019, the French, German and Dutch finance ministers signed a joint - to analyse and assess all relevant disclosure rules in place
future CMU actions. The Commission plan, calling for more integrated capital markets in Europe. They point at
climate and technological change, as well as Brexit, making the need for a The report contains 17 recommendations in total on various issues. The Commission also
is expected to issue a new CMU action
well-designed capital market for the EU to become an urgent strategic issue. launched a consultation on the report, which runs until 30 June and to which BIPAR will respond.
Plan by Q4 2020.
In October 2019, the 3 finance Ministers presented the report of this “Next
Capital Markets Union” high-level working group at the Eurogroup meeting. Next steps
The Group suggests amongst others a new name for CMU: “Savings and
Sustainable Investment Union” and invites political leaders to focus on two In its 2019 Progress Report, the European Commission calls on the European Council to
EU major objectives: renew its commitment to the CMU and endorse these efforts for its next Strategic Agenda.

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