The European Union presented its new plan to renovate the structure of its stock markets. It’s the third wave of reforms since the project was launched six years ago. The EU has been working on the creation of a capital markets union (CMU), which has been affected by the UK's departure after Brexit.
One of the most important avenues of work, proposed by the European Commission, is to make it easier to raise money for companies to recover from the financial impact of the pandemic and to achieve climate goals. Another consequence of Brexit is that Brussels now has a financial competitor on its doorstep.
EU financial services chief, Mairead McGuiness, said that “it’s important to develop our own capital markets”. Even though she said that she does not see herself “competing” with the United Kingdom, most of the proposals in the legislative package are aimed at strengthening the resilience of the EU's financial system. All proposals must be approved before becoming law.
The European Commission proposed to establish a record of stock and bond prices, as well as giving free information to the investors. When this is implemented, it will be a " decisive moment " for the CMU, said McGuinness.
The second proposal is to revise the regulation on long-term investment funds to promote their use. To achieve this goal, the institution suggested providing more flexibility for fund managers, introducing an “additional liquidity window”.
The European Commission announced that other capital markets initiatives, such as new corporate insolvency rules, a financial alphabetisation framework and new listing rules, will be presented in the course of 2022.