EUROPEAN UNION: ESMA Publishes Response to Capital Markets Union Green Paper

Thursday May 21 2015

The European Securities and Markets Authority (ESMA) has published its response to the European Commission’s Green Paper on Building a Capital Markets Union.

ESMA is fully supportive of the aims of the CMU to support deeper and more integrated capital markets encompassing all 28 Member States of the EU and is committed to working collaboratively with the European Commission to achieving this goal.

Increasing the role of the non-banking sector and diversifying sources of funding, will not only help in accessing the much needed capital for investments, it should also help in making a shift from debt to more equity funding.

To achieve the benefits mentioned above, an increased participation of investors will be essential and the level of confidence and trust of investors (and especially retail investors) in capital markets needs to grow. Therefore, all CMU initiatives, especially the ones that could give greater access to investors to capital markets, need to embed investor protection objectives to ensure the long term viability of a greater role of capital markets.

The response sets out how ESMA’s main objectives of enhancing investor protection and promoting stable and orderly financial markets, and its linked activities, can contribute to the CMU Further, the response contains specific proposals where improvements could be made in relation to access to credit information for SME’s and increasing cross-border retail participation in investment funds such as UCITS.

Click on the link above for further details.