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Capital Markets Union
On 30 September 2015, the European Commission launched its CMU Action Plan, which is intended to help build a true single market for capital across the 28 EU Member States. As part of the Juncker Commission priority to boost jobs, growth and investment across the EU, the CMU, a key pillar of the Investment Plan, aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe’s businesses and long-term projects. Alternative sources of finance, complementary to bank-financing – including capital markets, venture capital, crowdfunding and the asset management industry – are more widely used in other parts of the world, and should play a bigger role in providing financing to EU companies that struggle to get funding, especially SMEs and start-ups. Having more diversified sources of financing is good for investment and business but is also essential to financial stability, mitigating the impact of potential problems in the banking sector on companies and their access to finance.

The CMU is a medium-term project but with some important early initiatives (Annex 1 in the Action Plan provides a full list of actions and an indicative timeline). Accordingly, alongside the CMU Action Plan, the Commission has also unveiled a first set of measures to relaunch high-quality securitisation, and to promote long-term investment in infrastructure. In addition, the Commission has announced proposed changes to the Prospectus Directive, with a view to making it easier and less expensive for SMEs to raise capital; and the Commission consulted on Venture Capital Funds and on Covered Bonds (click here for the ICMA AMIC CBIC response regarding Covered Bonds). Furthermore, in line with the principles of Better Regulation, the Commission has also launched a call for evidence on the cumulative impact of financial legislation — to make sure that it is working as intended without (for example) overlapping reporting requirements or inconsistencies between the various laws (click here for ICMA's response).

The CMU Action Plan is built around the following key principles:
  • Creating more opportunities for investors: the CMU should help mobilise capital in Europe and channel it to companies, including SMEs, and infrastructure projects that need it to expand and create jobs.  It should give households better options to meet their retirement goals.
  • Connecting financing to the real economy: the CMU is a classic single market project for the benefit of all 28 EU Member States. Member States have a lot to gain from channeling capital and investment into their projects.
  • Fostering a stronger and more resilient financial system: Opening up a wider range of funding sources and more long-term investment, ensuring that EU citizens and companies are no longer as vulnerable to financial shocks as they were during the crisis.
  • Deepening financial integration and increasing competition: the CMU should lead to more cross-border risk-sharing and more liquid markets which will deepen financial integration, lower costs and increase European competitiveness.

30 June 2020
High-Level Forum Report on the Capital Markets Union: ICMA Feedback

12 June 2020
ICMA preliminary thoughts on the Report of the High Level Forum on the Capital Markets Union

29 July 2019
ICMA has prepared a short briefing paper on the importance of integrated capital markets and CMU. To access the briefing, click here.

10 March 2017

ICMA responded to the commission consultation on capital markets union mid-term review. To view the response, click here.

11 January 2016
Click here to read ICMA’s Paul Richards article on ‘Assessing Capital Markets Union’ from the ICMA Quarterly Report First Quarter 2016.

30 April 2015
ICMA has responded to the European Commission Green Paper: Building a Capital Markets Union. To view the response, click here.

Related topics

Pan European Private Placements

The Pan-European Private Placement Working Group (PEPP Working Group) led by ICMA has recently launched the Pan-European Corporate Private Placement Market Guide. The Guide sets out a voluntary framework for common market standards and best practices which are essential for the development of a Pan-European Private Placement market aimed at providing medium to long term finance to European mid-sized companies, in close alignment with the European Commission’s goal of bringing about a Capital Markets Union.

Infrastructure finanancing

ICMA and AFME have published the “Guide to infrastructure financing, bank loans, debt private placements and public bonds – smoothing the pathway for effective funding”. This is the first comprehensive and practical guide to help infrastructure issuers, sponsors and project companies more easily tap various types of funding, including bank, private placement and public project bond financing in Europe.

Prospectus Directive Review

A review of the Prospectus Directive (PD) was identified as a priority for early action in the Capital Markets Union project. The objective of the PD review is to reform and reshape the current prospectus regime in order to make it easier for companies to raise capital throughout the EU and to lower the associated costs, while maintaining effective levels of consumer and investor protection. Following a European Commission PD Consultation to which ICMA responded in May 2015, the European Commission published a proposed Proscpectus Regulation on 30 November 2015. ICMA is discussing the proposal with various regulators and stakeholders.

Securitisation consultation

A review of securitisation has been identified as another priority for early action in the Capital Markets Union project, and the European Commission launched a specific securitisation consultation on 18 February 2015. This consultation represents a first step towards a possible initiative on creating an EU framework for simple, transparent and standardised securitisation, with a view to improving the EU legal framework to create a sustainable market for high-quality securitisation. The ICMA and the ICMA’s AMIC responded to this consultation in accordance with the 13 May 2015 deadline.


Paul Richards
Managing Director, Head, Market Practice and Regulatory Policy
Direct line: +44 20 7213 0315