The Commission adopted the first CMU action plan in 2015 (CMU I) which was later updated following a mid-term review in 2017.
The Commission published a new action plan for the CMU in September 2020 (CMU II) which was followed by a status report in November 2021.
The CMU is the EU’s plan to create a single market for capital across the EU. Efforts to put in place a single market for capital started already with the Treaty of Rome, but the objective has not yet been achieved. There is no single measure that will complete the CMU. The only way to progress is to move step by step, in all areas where barriers to the free movement of capital still exist.
The vision is that the CMU will bring value to all Europeans, wherever they live and work, so that citizens of smaller Member States will get the same access to financial services as those who live in larger more established financial centers.
The European Parliament and Member States agreed on 12 out of 13 legislative proposals proposed by the Commission, although not all of them in the exact form proposed by the Commission.
CMU II includes a list of 16 new actions set out to achieve three key objectives:
- support a green, digital, inclusive and resilient economic recovery by making financing more accessible to European companies,
- make the EU an even safer place for individuals to save and invest long-term,
- integrate national capital markets into a genuine single market.
Below is an overview of CMU II actions that are of most interest for the SSMA and its membership.
Action 1: Proposal to set up an EU-wide platform (European single access point) that provides investors with seamless access to financial and sustainability-related company information.
A legislative proposal was adopted by the Commission in November 2021.
Negotiations are ongoing in the Council and European Parliament. SSMA is engaging on the proposal and has published a position paper.
Action 2: Proposal to simplify the listing rules for public markets to promote and diversify small and innovative companies’ access to funding.
SSMA is engaging on this action and responded to the Commission consultation in February 2022. A legislative proposal is expected to be published in Q3 2022.
Action 4: Proposal to remove regulatory obstacles for insurance companies to invest long-term, provide for an appropriate prudential treatment of long-term SME equity investment by banks, and to assess possibilities of promoting market-making activities by banks and other financial firms.
The Solvency II package was adopted on 22 September 2021. Legislative proposals amending the Capital Requirements Regulation and Capital Requirements Directive were adopted in October 2021. Negotiations are ongoing in the Council and European Parliament. SSMA is engaged in the discussions with special focus on the ability to carry out market making activities.
Action 7: Feasibility assessment for the development of a European financial competence framework and the possibility of introducing a requirement for Member States to promote learning measures supporting financial education, in particular in relation to responsible and long-term investing.
The Commission, in partnership with the OECD and its International Network on Financial Education, published a new financial competence framework for adults in January 2022. Work is continuing on a framework for young people and the uptake of the framework for adults by Member States and stakeholders through working groups.
SSMA is engaged in the action on financial education and is a member of the Swedish Network on Financial Education and supporter of Ung Privatekonomi, providing financial education to students in Swedish Upper Secondary Schools.
Action 8: Assessment of applicable rules on inducements and disclosure and, where necessary, proposals to amend the existing legal framework for retail investors to receive fair advice and clear and comparable product information. Proposal on how to reduce information overload for experienced retail investors, subject to appropriate safeguards. Consideration of ways to improve the level of professional qualifications for advisors in the EU including assessment of the feasibility of setting up a pan-EU label for financial advisors.
The Commission consulted on the Retail Investment Strategy in 2021 and is expected to present a study on this topic in Q1 2022. The study is expected to be followed by a legislative proposal in Q4 2022.
SSMA is engaged on this topic and responded to the Commission Retain Investment Strategy consultation in August 2021. The Commission is expected to present a feasibility assessment on the introduction of a pan-EU label for financial advisers in Q1 2022. SSMA is engaged on this topic directly and through its subsidiary Swedsec Licensiering AB.
Action 10: Proposal for a common, standardised, EU-wide system for withholding tax relief at source to lower costs for cross-border investors and prevent tax fraud.
The Commission is consulting on this action and will present a legislative proposal in Q4 2022. SSME is engaged on this action and is responding to the Commission consultation.
Action 12: Consideration to introduce an EU definition of ‘shareholder’ and further clarifying and harmonising rules governing the interaction between investors, intermediaries and issuers. Examining possible national barriers to the use of new digital technologies in this area.
The Commission assessment will be completed as part of the implementation of the Shareholders Rights Directive II in Q3 2023. SSMA is engaged on this topic.
Action 13: Consideration of amending rules to improve the cross-border provision of settlement services in the EU.
The Commission has consulted and published a report, and a legislative proposal is expected to be published in Q1 2022. SSMA is engaged on this topic and has responded to the Commission consultation.
Action 14: Proposal to create an effective and comprehensive post-trade consolidated tape for equity and equity-like financial instruments.
The Commission published a legislative proposal on MiFIR in November 2021 including a proposal on the creation of a post-trade consolidated tape. SSMA is engaged on this action.
Action 16: Work towards an enhanced single rulebook for capital markets by assessment of the need for further harmonization of EU rules and monitoring progress towards supervisory convergence, taking into account the experiences of Wirecard.
The Commission will publish a report on potential improvements in the single rulebook for capital markets in Q1 2022. A consultation has also been carried out regarding the quality and enforcement of corporate reporting. SSMA is engaged in actions relating to supervision of capital markets in the EU.
CMU II also includes actions that are not in the focus the SSMA.
Action 3: Review of the legislative framework for European long-term investment funds (ELTIFs).
Action 5: Assessment of the merits and feasibility of introducing a requirement for banks to direct SMEs, whose credit application they have turned down, to providers of alternative funding.
Action 6: Review of the current regulatory framework for securitization.
Action 9: Facilitation of the monitoring of pension adequacy in Member States through the development of pension dashboards and development of best practices for setting up national tracking systems for individual Europeans. Launch of a study to analyze auto-enrolment practices and other practices to stimulate participation in occupational pension schemes, with a view to developing best practices for such systems across Member States.
Action 11: Legislative or non-legislative initiative for minimum harmonization or increased convergence in targeted areas of non-bank insolvency law to make the outcomes of insolvency proceedings more predictable. Exploration, together with the European Banking Authority, of possibilities to enhance data reporting in order to allow for a regular assessment of the effectiveness of national loan enforcement regimes.
Action 15: Proposal to strengthen the investment protection and facilitation framework in the EU.