Annexes to COM(2015)468 - Action Plan on Building a Capital Markets Union - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2015)468 - Action Plan on Building a Capital Markets Union. |
|---|---|
| document | COM(2015)468  |
| date | September 30, 2015 |
7. Next steps and monitoring
This Action Plan set out the priority actions needed to encourage investment in all Member States and across the EU, and better link savings with growth. The preparation of the proposed actions will be subject to appropriate consultation and impact assessment of the range of options for achieving the objectives.
The successful adoption and implementation of these actions will require a sustained and concerted effort. This is a project for all 28 Member States and the Commission will work closely with them and the European Parliament to take forward these proposals.
To build early momentum, concrete proposals are being announced today and others will soon follow. First actions include a comprehensive package on securitisation with updated calibrations for CRR, the definition of infrastructure and revised calibrations for Solvency II, and a proposal to review the Prospectus Directive. In other areas, further consultation with interested parties may be needed. In parallel, the Commission will facilitate discussions with Member States on items such as tax and insolvency to enable progress to be reached over the medium to long term.
The success of the CMU will also depend on market participants. Financial intermediaries must play their part in restoring the trust of their clients and building confidence in capital markets in Europe. This Action Plan includes market-led initiatives and the Commission urges the relevant parties to prioritise progress in these areas.
Furthermore, the Commission will continue to work to identify the main inefficiencies and barriers to deeper capital markets in Europe and work out how best to overcome them, whilst retaining a strong focus on investor protection and market supervision.
In addition to annual reports, the Commission will prepare a comprehensive stock-take in 2017 as a basis for deciding on any additional measures that may be required.
The Commission will report regularly to the European Parliament and Member States on progress.
Annex 1: List of actions and indicative timeline
| Financing for innovation, start-ups and non-listed companies | ||
| Support venture capital and equity financing | Proposal for pan-European venture capital fund-of-funds and multi-country funds | Q2 2016 |
| Revise EuVECA and EuSEF legislation | Q3 2016 | |
| Study on tax incentives for venture capital and business angels | 2017 | |
| Overcome information barriers to SME investment | Strengthen feedback given by banks declining SME credit applications | Q2 2016 |
| Map out existing local or national support and advisory capacities across the EU to promote best practices | 2017 | |
| Investigate how to develop or support pan-European information systems | 2017 | |
| Promote innovative forms of corporate financing | Report on crowdfunding | Q1 2016 |
| Develop a coordinated approach to loan origination by funds and assess the case for a future EU framework | Q4 2016 | |
| Making it easier for companies to enter and raise capital on public markets | ||
| Strengthen access to public markets | Proposal to modernise the Prospectus Directive | Q4 2015 |
| Review regulatory barriers to SME admission on public markets and SME Growth Markets | 2017 | |
| Review EU corporate bond markets, focusing on how market liquidity can be improved | 2017 | |
| Support equity financing | Address the debt-equity bias, as part of the legislative proposal on Common Consolidated Corporate Tax Base | Q4 2016 |
| Investing for long term, infrastructure and sustainable investment | ||
| Support infrastructure investment | Adjust Solvency II calibrations for insurers' investment in infrastructure and European Long Term Investment Funds | Q3 2015 |
| Review of the CRR for banks, making changes on infrastructure calibrations, if appropriate | Ongoing | |
| Ensure consistency of EU financial services rulebook | Call for evidence on the cumulative impact of the financial reform | Q3 2015 |
| Fostering retail and institutional investment | ||
| Increase choice and competition for retail | Green Paper on retail financial services and insurance | Q4 2015 |
| Help retail investors to get a better deal | EU retail investment product markets assessment | 2018 |
| Support saving for retirement | Assessment of the case for a policy framework to establish European personal pensions | Q4 2016 |
| Expand opportunities for institutional investors and fund managers | Assessment of the prudential treatment of private equity and privately placed debt in Solvency II | 2018 |
| Consultation on the main barriers to the cross-border distribution of investment funds | Q2 2016 | |
| Leveraging banking capacity to support the wider economy | ||
| Strengthen local financing networks | Explore the possibility for all Member States to authorise credit unions outside the EU's capital requirements rules for banks | Ongoing |
| Build EU securitisation markets | Proposal on simple, transparent and standardised (STS) securitisations and revision of the capital calibrations for banks | Q3 2015 |
| Support bank financing of the wider economy | Consultation on an EU-wide framework for covered bonds and similar structures for SME loans | Q3 2015 |
| Facilitating cross-border investing | ||
| Remove national barriers to cross-border investment | Report on national barriers to the free movement of capital | Q4 2016 |
| Improve market infrastructure for cross-border investing | Targeted action on securities ownership rules and third-party effects of assignment of claims | 2017 |
| Review progress in removing remaining Giovannini barriers | 2017 | |
| Foster convergence of insolvency proceedings | Legislative initiative on business insolvency, addressing the most important barriers to the free flow of capital | Q4 2016 |
| Remove cross-border tax barriers | Best practice and code of conduct for relief-at-source from withholding taxes procedures | 2017 |
| Study on discriminatory tax obstacles to cross-border investment by pension funds and life insurers | 2017 | |
| Strengthen supervisory convergence and capital market capacity building | Strategy on supervisory convergence to improve the functioning of the single market for capital | Ongoing |
| White Paper on ESAs' funding and governance | Q2 2016 | |
| Develop a strategy for providing technical assistance to Member States to support capital markets' capacity | Q3 2016 | |
| Enhance capacity to preserve financial stability | Review of the EU macroprudential framework | 2017 |
(1) PRIMES, 2030 Impact Assessment.
(2) European Parliament resolution on Building a Capital Markets Union (2015/2634(RSP)).
(3) Council of the EU conclusions on a Capital Markets Union of 19 June.
(4) European Commission (2014), Annual Report on European SMEs: A Partial and Fragile Recovery, p. 24.
(5) Estimation based on data from 22 EU Member States in 2014. Source: Crowdsurfer Ltd and Ernst & Young LLP, "Crowdfunding: Mapping EU markets and events study", 2015.
(6) If the crowdfunding platform is authorised as an investment firm and complies with the relevant MiFID requirements.
(7) European Securities and Markets Authority, Opinion and Advice on investment-based crowdfunding, ESMA/2014/1378 and ESMA/1560, 18.12.2014; Opinion of the European Banking Authority on lending-based crowdfunding, EBA/Op/2015/03, 26.03.2015.
(8) Not all of business angel investment is directly measurable. Some estimates consider that total angel investment might be greater than venture capital investment in some European countries with well-developed angel markets - see OECD (2011), Financing High-Growth Firms: The Role of Angel Investors.
(9) Source: EBAN Statistics Compendium 2014. Data is available for 21 Member States.
(10) Evidence from 15 OECD countries for 2001-11 shows that young businesses play a crucial role in employment creation. Young firms systematically create more jobs than they shed. In particular, young firms with fewer than 50 employees represent around 11% of employment and generally account for more than 33% of total job creation in the business sector, while their share in job losses is around 17%. (Source: OECD (2013), Science, Technology and Industry Scoreboard).
(11) Source: European Private Equity & Venture Capital Association.
(12) Regulation (EU) No 345/2013.
(13) Regulation (EU) No 346/2013.
(14) The Commission's State Aid guidelines for risk finance clarify conditions under which Member States can set up schemes promoting venture capital, 2014/C 19/04.
(15) As mandated by the latest Capital Requirements Regulation, Article 431 (4).
(16) Examples include Aktiespararna (Sweden), Médiateur du Credit (France), Better Business Finance (UK), Investomierz (Poland), Industrie- und Handelskammern (Germany), amongst others.
(17) See European Financial Stability and Integration Report, April 2015, Chapter 7.
(18) Source: AIMA, Financing the Economy: The role of alternative asset managers in the non-bank lending environment, May 2015.
(19) Regulation on European Long-term Investment Funds, PE-CONS 97/14, 20.03.2015.
(20) 52% of the private placement deals, excluding those in the German Schuldscheine market, are listed. Source: S&P First European Private Placement League Table, 2015.
(21) Source: S&P
(22) In February 2015, ICMA published the Pan-European Corporate Private Placement Guide. This Guide promotes the use of standardised documentation produced by the Loan Market Association (governed by English law) and the Euro-PP Working Group (governed by French law). This initiative focuses solely on corporate debt.
(23) For example, the German insurance industry, has developed a simple regime, acknowledged by BaFiN, that allows insurers to easily calculate a predefined set of financial indicators to assess creditworthiness, as well as to assess compliance with the capital requirements for private placement investments.
(24) An SME dedicated Multilateral Trading Facility (MTF) of the London Stock Exchange.
(25) Improving the market performance of business information regarding SMEs, ECSIP Consortium 2013.
(26) In 2009, family businesses made up more than 60 % of all European companies. Source: European Commission, Final Report of Expert Group – overview of Family-Business Relevant Issues: Research, Networks, Policy Measures and Existing Studies .
(27) EU IPO Report issued by the European IPO Task Force (European Issuers, EVCA and FESE), 23 March 2015.
(28) Demarigny Report, An EU-listing Small Business Act, March 2010.
(29) A recent Oxera study shows that the average cost for investors seeking information on an investment is USD 58 in the US versus EUR 430 in the EU.
(30) As part of the Commission's REFIT programme for simplification and regulatory burden reduction.
(31) See Commission study: http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=7562&lang=en&title=Improving-the-market-performance-of-business-information-services-regarding-listed-SMEs
(32) For example, the consultation response of APG stated that 50% of SMEs listed on Euronext Amsterdam, Brussels, Paris and Lisbon do not benefit from any financial research and 16% have only one analyst covering them.
(33) Source: Bloomberg
(34) Managers authorised under AIFMD and domiciled in the EU can run these funds to invest in long term, illiquid or hard-to-sell assets such as infrastructure projects and SMEs that need stable financing for a number of years. In return, these assets are likely to pay an 'illiquidity premium', that is higher or more stable returns which make up for investors' inability to get their money before a predetermined date.
(35) Regulation (EU) No 575/2013
(36) Directive 2013/36/EU .
(37) See EIB working paper, 2013/02, Private Infrastructure Finance and Investment in Europe, page 11.
(38) A global study of default and recovery rates between 1983 and 2012 by Moody's shows that the 10-year cumulative default rate for the infrastructure sector is 6.6%. This is lower than for project finance bank loans. In addition, the recovery rate on defaulting infrastructure loans is also high (up to 80%).
(39) For example in 2013, the total EU-28 public infrastructure investment was EUR 450 billion. Of this amount, public investments accounted for 90% and private investments (including public-private partnerships) accounted for roughly 10%, EIB Working Paper 2013/02, page 7.
(40) For example: see Oliver Wyman (2012) report, The real financial crisis: why financial intermediation is failing ; IPO Task Force report, Rebuilding IPOs in Europe, 23 March 2015.
(41) OEE, IODS (2012): Who owns the European economy? Evolution of the ownership of EU listed companies between 1970 and 2012 .
(42) In 2013 only 35% of retail investors trusted investment services' providers to respect consumer protection rules. European Commission (2013), Market Monitoring Survey, 2010-2013.
(43) Directive 2014/91/EU; Regulation (EU) No 1286/2014; Directive 2014/65/EU; Insurance Distribution Directive (IDD), 10747/15; Directive 2009/138/EC and the Commission proposal for a Regulation on reporting and transparency of securities financing transactions (SFTR), COM/2014/040 final.
(44) The 2015 Pension Adequacy Report: current and future income adequacy in old age in the EU, forthcoming.
(45) An overview of the current market and regulatory framework is provided in EIOPA's consultation paper on the creation of a standardised pan-European personal pension product of 3/7/2015.
(46) Source: Final Report: Who owns the European economy? Evolution of the ownership of EU-Listed companies between 1970 and 2012, by Observatoire de l'Epargne Européenne and Insead OEE Data Services, August 2013
(47) http://ec.europa.eu/finance/consultations/2015/long-term-finance/docs/consultation-document_en.pdf
(48) At the height of the crisis, the worst-performing EU securitisation products rated AAA defaulted in 0.1% of the cases. In comparison, their US equivalent defaulted 16% of the times. Riskier (BBB-rated) EU securitisation also performed very well, with worst-performing classes defaulting in 0.2% of the cases at the height of the crisis. The default rate of BBB-rated US securities reached instead 62%. Source: EBA.
(49) Where the original creditor transfers a debt claim to someone else.
(50) Regulation (EU) No 648/2012.
(51) Regulation (EU) No 909/2014.
(52) http://ec.europa.eu/internal_market/financial-markets/docs/clearing/second_giovannini_report_en.pdf
(53) C(2014) 1500 final, 12.3.2014.
(54) Evaluation of the implementation of the Recommendation on a new approach to business failure and insolvency (http://ec.europa.eu/justice/civil/commercial/insolvency/index_en.htm)
(55) Speech of V. Constâncio, Vice President of the ECB.
(56) As set out in the SFTR, following the outcome of the work performed by relevant international fora and with the assistance of ESMA, EBA and the ESRB, the Commission will report to the European Parliament and the Council in 2017 on progress in international efforts to mitigate the risks associated with SFTs, including on the FSB recommendations for haircuts on non-centrally cleared SFTs and their appropriateness for European markets.