With a package of legislative proposals, the European Commission is taking the next step towards the so-called European capital market union. Easier access to financial data and better protection against risks, among other things, should encourage investors to invest in companies and projects in other EU countries as well.
According to European Commissioner Mairead McGuinness (Capital Market), this is extra necessary for the economic recovery from the corona crisis. “Capital markets play a vital role, alongside banks, in financing the economy.” Moreover, billions of euros will be needed in the coming years for the transition to a green and digital economy and the Member States cannot afford that money alone. A joint capital market also makes companies less dependent on banks for a loan.
Despite the fact that agreements on the free movement of capital in the EU have been in place for decades, in practice there is a patchwork of national regulations and therefore obstacles. Savers and investors find it difficult to estimate risks across borders, experience has shown. In order to gain a better understanding of this, the Committee proposes to set up a central European ‘desk’ with financial company data and information about investment products.
The EU day-to-day board also wants to expand access to the electronic system that provides near-real-time trading data on shares, bonds and derivatives on European exchanges such as Euronext. This so-called Consolidated Tape System (CTS) is now only accessible to a handful of professional investors. According to the committee, it gives investors a better insight into prices and other conditions in the financial markets. The European investment guideline MiFID (Markets in Financial Instruments Directive) must be amended for this.
In addition, the committee wants to revise the EU scheme for long-term investment funds (ELTIFs) to facilitate long-term investments in, for example, energy, transport or the construction of hospitals. For example, the investment threshold for private investors of at least 10,000 euros will be removed.
Both the Member States and the European Parliament must approve the proposals.
European Commission takes next step towards Capital Markets Union
Source link European Commission takes next step towards Capital Markets Union