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Completing the Capital Markets Union

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The Commission is taking further steps to drive forward the Capital Markets Union (CMU), a pivotal project of the Juncker Commission to boost jobs and growth in Europe.

After almost two years since the launch of the CMU Action Plan, the Commission is presenting today a number of important new initiatives to ensure that this reform programme remains fit for purpose.

The CMU is a key pillar of the Commission’s Investment Plan for Europe, the so-called Juncker Plan. Through a mix of regulatory and non-regulatory reforms, this project seeks to better connect savings to investments. It aims to strengthen Europe’s financial system by providing alternative sources of financing and more opportunities for consumers and institutional investors. For companies, especially SMEs and start-ups, the CMU means accessing more funding opportunities, such as venture capital and crowdfunding. The rebooted CMU puts a strong focus on sustainable and green financing: as the financial sector begins to help sustainability-conscious investors to choose suitable projects and companies, the Commission is determined to lead global work on supporting these developments.

European Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said:

The CMU remains at the heart of our efforts to boost European investment and create jobs and growth. As we face the departure of the largest EU financial centre, we are committed to stepping up our efforts to further strengthen and integrate the EU capital markets. This review makes clear the scale of the challenge and we count on the support of the European Parliament and Member States to rise to it.”

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth and Investment, said:

“The Commission has worked hard to give decisive impetus to the CMU. In just twenty months, we have delivered two-thirds of our initial commitments and other important actions are in the pipeline. We are now expanding our scope to meet new challenges such as funding sustainable investment and harnessing the potential of FinTech. The new measures presented here today renew and reinforce the Commission’s commitment and set us on an irreversible path towards the CMU.”

The Mid-Term Review reports on the good progress made so far in implementing the 2015 Action Plan, with around two-thirds of the 33 actions delivered in twenty months. Just recently, co-legislators agreed in principle on two major proposals. The secularization package will free up capacity on banks’ balance sheets and generate additional funding for households and fast growing companies. The venture capital funds reform will facilitate investment in small and medium-sized innovative companies. Moreover, last year we agreed on the new Prospectus regime that will allow easier access to public markets especially for SMEs. However, for the CMU to succeed, the full and constant support of the European Parliament, Member States and all market participants is paramount.

The Mid-Term Review also sets the timeline for the new actions that will be unveiled in the coming months. These will include a pan-European personal pension product to help people finance their retirement. Furthermore, the Commission will continue its work on enhancing the supervisory framework for integrated capital markets, increasing the proportionality of the rules for listed SMEs and investment firms, harnessing the potential of FinTech and promoting sustainable investment.

Alongside the CMU Mid-Term Review, the Commission is also unveiling measures to encourage long-term investment through a review of prudential calibration for investments in infrastructure corporates. We propose reducing the amount of capital that insurance companies need to hold when they invest in infrastructure corporates. These targeted changes to the Solvency II Delegated Regulation will further support investment in infrastructure.


The CMU Mid-term review sets out nine new priority actions:

  1. strengthen the powers of European Securities and Markets Authority to promote the effectiveness of consistent supervision across the EU and beyond;
  2. deliver a more proportionate regulatory environment for SME listing on public markets;
  3. review the prudential treatment of investment firms;
  4. assess the case for an EU licensing and passporting framework for FinTech activities;
  5. present measures to support secondary markets for non-performing loans (NPLs) and explore legislative initiatives to strengthen the ability of secured creditors to recover value from secured loans to corporates and entrepreneurs;
  6. ensure follow-up to the recommendations of the High Level Expert Group on Sustainable Finance;
  7. facilitate the cross-border distribution and supervision of Undertakings for Collective Investments in Transferable Securities (UCITS) and alternative investment funds (AIFs);
  8. provide guidance on existing EU rules for the treatment of cross-border EU investments and an adequate framework for the amicable resolution of investment disputes;
  9. propose a comprehensive EU strategy to explore measures to support local and regional capital market development.

In addition, the Commission will advance on outstanding actions under the 2015 Action Plan. In particular, the Commission will put forward:

  1.  A legislative proposal on a pan-European personal pension product to help people finance their retirement;
  2. A legislative proposal for an EU-framework on covered bonds to help banks finance their lending activity;
  3. A legislative proposal on securities law to increase legal certainty on securities ownership in the cross-border context.

Additional information

The CMU seeks to strengthen the flow of private capital to growing businesses, infrastructure investment, energy transition and other projects to underpin sustainable growth. Removing obstacles to the free flow of capital across borders will strengthen Economic and Monetary Union by supporting economic convergence and helping to cushion economic shocks in the euro area and beyond, making the European economy more resilient. Stronger capital markets, better connected to productive investment, will create better investment opportunities for pension funds and institutional and retail investors saving for the long-term and retirement.

In January 2017, the Commission launched a consultation on the CMU mid-term review, creating an opportunity for stakeholders to provide targeted input to complement and advance actions put forward in the CMU Action Plan. On 30 September 2015, the Commission adopted an Action Plan on Building a Capital Markets Union (CMU). The Action Plan sets out a programme of actions which aim to establish the building blocks of an integrated capital market in the European Union by 2019.

The Action Plan is built around the following key principles:

  • Connecting financing to the real economy by developing non-bank funding sources
  • Creating more opportunities for investors
  • Fostering a stronger and more resilient financial system
  • Deepening financial integration and increasing competition.


Source: EC

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