The Investment Association responds to the European Commission's plans for capital markets union
In response to the European Commissions green paper setting out its plans for an EU Capital Markets Union (CMU), Richard Metcalfe, Director of Regulatory Affairs at The Investment Association, said:
“There is a big opportunity with CMU to bring the Single Market to retail investors and The Investment Association supports the Commission’s proposals insofar as they do that. Wholesale markets already have many measures for efficiency and risk reduction but the potential benefits of a ‘deep’, retail CMU are enormous, in terms of a virtuous cycle of investment driving growth, leading to better financial security for citizens over their lifetimes and a vibrant economy.
“Ideally, the EU will follow the logic of the UCITS legislation and ‘complete’ the Single Market in pan-European collective investment. That may require imagination, exploring how digital options could improve product availability and support investor decision-making. It certainly needs a consistent approach to investor protection, which does not currently operate to the same high standard for all investment products. It should also not ignore legal risks, including those inherent in cross-border chains of ownership.
“Of course, there are still issues in wholesale markets and The Investment Association intends to put forward proposals regarding the efficiency of the prospectus process as well as the role, and form, of private placements and securitisation. These will be important in ensuring that systemically benign finance can complement existing funding channels.”