Capital Markets Union

February 2017

European Commission

Commission launches public consultation on CMU mid-term review – 20 January

The European Commission has launched a public consultation on its planned CMU mid-term review, set to be published on 7 June. The consultation is accompanied by a consultation document, which contains a list of measures that the Commission is already undertaking in the area of CMU. The consultation asks stakeholders to indicate what additional measures – on top of the ones already mentioned in the consultation document – the Commission should take in order to further foster capital market integration in the EU. The consultation will feed directly into the mid-term review, and provides an opportunity for stakeholders to express their views as to what additional action the Commission should undertake. The deadline for the consultation is 17 March – meaning a mere two months’ consultation period as opposed to the usual three. The Commission explains this notably by the fact that a more comprehensive CMU consultation already took place prior to the publication of the CMU Action Plan in September 2015.

Speech of Vice-President Dombrovskis at the Finanzmarktklausur 2017 in Berlin – 26 January

The Commission Vice-President Valdis Dombrovskis has held a speech at the Finanzmarktklausur 2017 in Berlin. In his speech, Vice-President Dombrovskis re-iterates that the CMU remains a core priority of the European Commission. He, moreover, states that the CMU project is entering its second stage, marked by the launch of the public consultation on the CMU mid-term review (see article above). Green finance is a new emerging priority under the CMU banner; the Commission will build on existing initiatives in the green bond market and its potential to finance resource efficient investments, and determine what is needed to make it more attractive for private capital in order to throw its weight behind sustainable investments. In the area of financial technology, the Commission will seek a balance between financial innovation and robust investor protection.


European Parliament

ECON Committee hearing with Maltese Minister of Finance – 25 January

The Minister of Finance of Malta, Edward Scicluna, has attended a hearing of the ECON Committee on the priorities of the upcoming Maltese Presidency. During the hearing, a number of MEPs criticised Malta for its tax regime that is allegedly too lax for multinationals, effectively calling the country a ‘tax haven’. Moreover, during the hearing the Minister re-iterated the commitment of the Maltese Presidency to advance the CMU agenda and emphasized the project’s significance for the EU economy (see article below for further details on the plans of the Maltese Presidency).

ECON Committee vote on prospectus compromise – 25 January

The ECON Committee of the European Parliament has voted on a compromise text of the European Commission’s proposal for a Prospectus Regulation. The compromise text is the result of negotiations conducted between the European Parliament and Member States in December 2016. It introduced a number of changes to the original text, for example:

  • SME prospectuses (“EU Growth Prospectus”):
    • No more Q&A format
    • Available for SMEs, mid-caps admitted to an SME Growth market or small issuances by non-listed companies
    • Details of disclosure requirements to be worked on by ESMA at level 2
  • The EU prospectus will only be mandatory from €8 millionin capital raised (almost double the previous €5 million threshold)
    • For offerings below that threshold, issuers can raise capital according to local market rules issued by growth markets – the purpose being to support the growth of local or regional stock small company exchanges
  • Alleviated corporate bond prospectusfor admission to wholesale debt markets
    • Previously, the alleviated debt prospectus was only available for debt issued in denominations of at least €100 000, which made it difficult for many investors to invest in corporate debt
  • Frequent participants on capital markets will now have a frequent issuer regime that will halve approval times from 10 days to 5
  • No more paper prospectuses will be required, except if an investor explicitly requests one
  • A new European online prospectus database will be operated free of charge by the European Securities and Markets Authority (ESMA)

In terms of next steps, the text will be voted on in the European Parliament Plenary. ESMA will subsequently work on level 2 technical standards to implement the political guidance received. This will, in all likelihood, include public hearings as well as a public stakeholder consultation around June 2017.

European Parliament report on fintech – 27 January

The European Parliament’s draft report on financial technology (FinTech) has been published. It has been drafted by the MEP Cora van Nieuwenhuizen (ALDE/NLD). The report sets out the main opportunities and challenges stemming from FinTech, and puts forward some recommendations on an appropriate regulatory approach for the sector. Of particular interest, the report calls on the Commission to prepare a FinTech Action Plan to notably boost the CMU and to provide for a “competitive financial system, financial stability and consumer and investor protection”. The report, moreover, emphasises that the supervision of FinTech should be based on the principles of applying the same rules on all entities providing particular services regardless of the type of legal entity, application of technology neutrality across legislation, and a risk-based approach based on proportionality and materiality. Finally, the report highlights the potential of FinTech in increasing access to capital – especially for SMEs – through cross-border financial services, alternative lending and investment channels such as crowdfunding and peer-to-peer lending. In terms of next steps, the ECON Committee is scheduled to vote on the report on 10 April. The report follows the own-initiative procedure, so it does not legally bind either the Commission or Member States to a particular course of action.



Programme of the Maltese Presidency – 9 January

The Maltese Presidency has published a more detailed Work Programme outlining its priorities for the next six months to come. With regard to the CMU, the Presidency will focus on reaching a compromise on securitisation, and to engage with the European Parliament on venture capital with particular focus on widening limits on investment and who can set up venture capital funds. Promoting access to equity finance for SMEs will also be close to the new Presidency’s heart. In the area of insolvency, initial discussions between Member States have already taken place, and the Maltese Presidency remains committed to taking the work forward (see article below).

Maltese Presidency to push on with insolvency – 27 January

EU Justice Ministers have met informally in Malta to discuss, notably, the European Commission’s proposal for a business insolvency Directive. The Maltese Presidency if expected to prioritise the file, following pressure from both the European Parliament and the Commission. It is expected that the Council’s work will focus on early intervention, where Member States are more willing to proceed with minimum requirements, whilst avoid touching on actual insolvency and, in particular, liquidation.



“France becomes second country to issue green bonds” – 3 January

According to Euractiv, France has become the second country in the EU to issue green bonds, after Poland. Poland launched €750 worth of state bonds in order to finance its transition to a more ecological economy. Luxembourg is currently planning a similar move. At the same time, the European Commission is concerned that different national approaches may lead to unwelcome fragmentation, and is therefore considering the possibility of developing common objective criteria to identify projects receiving funding fulfil certain ecological benchmarks.

“Germany calls for global standards on FinTech regulation” – 25 January

According to Politico (article only available to Politico Pro subscribers), Felix Hufeld – the Chair of the German Federal Financial Supervisory Authority – has called for the establishment of global standards to regulate new financial market actors and technology. He is afraid, in particular, that a myriad of national approaches to fintech will lead to a “regulatory race to the bottom”, and therefore urges for regulators and supervisors from across the world to develop common international standards. Mr. Hufeld reminded, however, that caution is needed in order to ensure that new rules and standards do not hamper innovation of the markets. An appropriate balance is needed.


Other News

Accountancy Europe publishes briefing paper on business insolvency – 9 January

Accountancy Europe has published a briefing paper on business insolvency as a response to the European Commission’s proposal on 22 November last year. The paper provides an overview of the accountancy profession’s involvement in business insolvency proceedings in Europe, and puts forward a set of recommendations to improve the status quo. These include involving practitioners with specialised expertise, reducing the length of insolvency proceedings, improving awareness on available help, and encouraging management’s role in financial distress.

EESC publishes its opinion on venture capital proposals – 12 January

The European Economic and Social Committee (EESC) has published its opinion on the Commission proposal to revamp EU venture capital rules: the European Venture Capital Fund (EuVECA) and European Social Entrepreneurship (EuSEF) Fund regulations (for further details on the Commission proposal, please see Accountancy Europe’s CMU Policy Update from July 2016). Of particular interest, the EESC welcomes the proposed regulation as a necessity to ensure that interpretations across Member States are coherent and consistent, calls for the current “very restrictive” access criteria to be significantly reduced, to increase the involvement of non-institutional investors, and for the creation of an environment under which the financing objectives of social investment funds can develop. The EESC opinion is non-binding and does not commit the Commission, Member States or the European Parliament to any particular action.

AFME report: EU capital markets in the retreat – 23 January

The Association for Financial Markets in Europe (AFME) has published new data on equity primary markets and trading across the 28 EU Member States and Switzerland. The data, published in a report, appears to demonstrate that EU capital markets are in the retreat rather than building up – despite the European Commission’s best efforts. For example, in 2016 delistings surpassed the number of new listings with a decrease of listed companies from 11,537 in 2015 to 11,295 in 2016. Equity underwriting, for its part, saw a 39% decrease in comparison to 2015, whilst equity main markets and MTFs saw a decrease of 9,4% in traded value in comparison to 2015.

New paper on the impact of the UK on CMU – 25 January

A new paper – jointly published by the University of Sheffield, Policy Network and the Foundation for European Progressive Studies – analyses the impact of the UK on the integration of financial markets in the EU. Looking at key legislative files and projects, such as the CMU, the paper argues that the UK has played a variety of different roles on the EU negotiation tables, including those of a ‘foot-dragger’, ‘fence-sitter’ and ‘pace-setter’. The authors, moreover, maintain that UK’s influencing actions were primarily motivated by its domestic political and economic considerations, and in particular the interests of its own finance industry.



  • 07/02/2017, 15th European Financial Services Conference, Forum Europe, Brussels. Source
  • 08/02/2017, Removing Information Barriers to Investment in SMEs, CEPS, Brussels. Source
  • 23/02/2017, Capital Markets Summit, Politico, Paris. Source
  • 20/06/2017, CMU Review, Financial Future, Brussels. Source