FEE CMU Policy Update

September 2016

European Commission

Commission roadmap on personal pensions framework – 8 September

The European Commission has published its roadmap for the establishment of a EU personal pensions framework. As a reminder, the Commission launched earlier in July a public consultation on the topic (please see FEE CMU Policy Update from July for further details). The roadmap does not contain new substantive information per se, but provides further details on the Commission’s approach towards a EU personal pensions framework.

The Commission states in the roadmap that it will at the feasibility of a EU initiative from tax, social and labour law, and contract law perspectives. On top of the public consultation, the Commission will organise a public hearing on 24 October which will bring together individuals to share their experiences with personal pensions and their interest in saving for retirement, as well as gather the views of professionals on their interest for “simple, affordable and transparent personal pension products”. As an additional step, the Commission will launch an external feasibility study on the taxation aspects and implementation. This will involve, amongst other things, mapping national regimes and practices.

In terms of policy options, the Commission is considering the following:

  • Baseline scenario – no EU action, thus leaving personal pensions under national competence;
  • Personal pension account – the establishment at the EU-level of a personal pension account similar to the Individual Retirement Account (IRA) in the US;
  • Personal pension product – would be developed on the basis of “common and flexible features” such as transparency and disclosure requirements, investment options, accumulation and de-accumulation phases, distribution models, consumer contractual rights, etc.
  • Harmonisation of national personal pensions regimes – in terms of prudential supervision, potential providers, maximum costs, contract law, distribution models, etc. Tax requirements would remain a Member State competence;
  • Code of Conduct – voluntary set of rules that providers could follow and to help encourage financial education of individuals.

On the basis of its ongoing public consultation, the public hearing as well as the feasibility study, the Commission will opt for one of the above mentioned approaches. No specific timeline has been established, but the Commission will present its possible proposal during 2017, whatever form it may take.

Speech by Vice-President Valdis Dombrovskis at the Eurofi Financial Forum 2016, Bratislava – 8 September

The Commission Vice-President Valdis Dombrovskis has held a speech for the occasion of the Eurofi Financcial Forum 2016 in Bratislava. In his speech, Dombrovskis emphasises the need to continue capital markets integration even after Brexit and argues that the possibility of “Britain exiting the single market just makes the case for CMU stronger and more urgent”. He therefore calls for accelerated speed for the reforms – a prominent theme in the CMU Communication that the Commission launched on 14 September (see article below for further details). The next priorities for the Commission are creating an enabling environment for a EU personal pensions framework, improving the distribution of investment funds, addressing the debt-equity bias, simplifying the reclamation of withholding taxes, supporting green finance, and assessing the possibility of reducing the number of reporting requirements for companies, including a project on data standardisation to improve reporting with new technology. Finally, by the end of 2016 the Commission will announce follow-up to the call for evidence exercise that took place last winter.

President Juncker delivers State of the Union speech – 14 September

The Commission President Jean-Claude Juncker has delivered the annual State of the Union speech at the European Parliament. As the title suggests, the purpose of the speech is to provide a high-level overview of the main challenges, risks, opportunities and priorities of the EU over the past year and for the subsequent one. Of particular interest, President Juncker highlighted in his speech the urgent priority of progressing with the CMU project. He sees in the CMU, in particular, a potential tool for ensuring that innovative start-ups across the EU have access to a variety of funding options ranging from business angels to venture capital and market financing.

Commission publishes new CMU Communication – 14 September

The European Commission has published a new CMU Communication titled Accelerating Reform. The Communication does not announce new major initiatives but rather – and as the name implies – attempts to harness further political momentum to speed up the implementation of the various measures and objectives announced in the CMU Action Plan last year. Certain areas for further work are identified, including sustainable finance, technology (FinTech), further removing cross-border barriers, and bringing about more efficient and coordinated supervision.

The Communication marks the transition from Commissioner Hill’s CMU leadership to that of Vice-President Dombrovskis. The dominating theme is the need to accelerate the speed of delivering the first batch of measures, and quickly moving on to further areas of work. The Communication also leaves the door open for stakeholders to inspire the Commission on additional measures that might facilitate the formation of a true CMU in the EU.


European Parliament

European Parliament approves its position on prospectus reform and votes on SME financing – 15 September

The European Parliament has approved its negotiating position on the Commission’s proposed Prospectus Regulation. The approved European Parliament’s prospectus report and the positions it contains will now be negotiated on with the Member States in the ‘trilogues’. From the perspective of the EU Growth Prospectus and the reduced disclosure regime for SMEs, no major changes were introduced (see FEE CMU Policy Update from July for further details). In terms of next steps, the Commission has stated that it is aiming for a compromise on the prospectus regime by the end of the year, whilst the European Securities and Markets Authority (ESMA) will have to work on the technical details of the proposal, including the lighter disclosure regime for SMEs.

In parallel, the European Parliament also adopted its own-initiative report on SME access to finance in the CMU context (for further details on the report, please see FEE CMU Policy Update from February). The report recognises the need for a more diverse financing landscape for SMEs, but emphasises the conventionally important role of bank financing. Moreover, the report takes stock of the myriad of SME categories and the often very different funding needs between these. Finally, the report ‘looks forward to’ the outcome of the ongoing Commission efforts to assess the case for specific accounting standards for SMEs. As a reminder, the report is non-binding from a legal perspective, but establishes the European Parliament’s thinking and approach on the topics covered.



ESAs publish report on main risks to the EU financial system – 7 September

The three European Supervisory Authorities (ESAs) have published a report on the main risks faced by the EU financial system. The report expresses concern over the long-term impact of the current ‘low growth and low yields’ economic environment to the financial service industry. Another danger identified in the report is the low profitability of financial institutions. And finally, the broader financial system is becoming increasingly inter-connected, raising the risks of more systemic risks. For each of the challenges, the report puts forward recommendations that should help address them.



17/10/2016, Delivering a green Capital Markets Union, Bruegel, Brussels.

08/11/2016, Cross-border distribution of funds, Financial Future, Brussels.

09/11/2016, 2016 ECMI Annual Conference – Towards the right policy mix for a thriving European capital market, ECMI/CEPS, Brussels.

06/12/2016, CMU stocktake, Financial Future, Brussels.

07/12/2016, FEE 30 years’ anniversary, Federation of European Accountants (FEE), Brussels.