Capital Markets Union

Following on the 2020 Capital Markets Union Action Plan, the European Commission has adopted a number of measures to better connect EU companies with investors. The proposals are aimed to:

  • improve the ability of companies to raise capital across the EU;
  • broaden investment opportunities for retail investors;
  • further integrate EU capital markets;
  • facilitate Europe’s recovery from the COVID-19 crisis; and
  • support digital and green transitions.

The EC’s measures consist of the following:

  1. The European Single Access Point (ESAP): a cornerstone of the EU’s Digital Finance Strategy, it will give companies more visibility towards investors, opening up more sources of financing.
  • Review of the European Long-Term Investment Funds (ELTIFs) Regulation: the revisions will make it easier for retail investors to invest in ELTIFs, in particular by removing the minimum €10,000 investment threshold, while ensuring strong investor protection.
  • Review of the Alternative Investment Fund Managers Directive (AIFMD): revisions will comprise of harmonising rules relating to loan funds, facilitating lending to the real economy, as well as clarifying rules on delegation.
  • Review of the Markets in Financial Instruments Regulation (MiFIR): revisions will introduce a ‘European consolidated tape’ which will give investors access to near real-time trading data for stocks, bonds and derivatives across all trading venues in the EU, and promote the international competitiveness of EU trading venues by removing the open access rule.

The EC will follow up in 2022 with more Capital Market Union actions, including a proposal on listing, an open finance framework, an initiative on corporate insolvency and a financial literacy framework. In terms of a recent circular, the MFSA informed that it will be assessing the documentation and proposals, whilst inviting market participants to submit any comments or queries.

Our financial services team shall also continue to follow developments in relation to the above. Should you require further information or assistance, please do not hesitate to contact the financial services team at dfcs@dfadvocates.com .

Photo Credits: www.esm.europa.eu