The European Commission (Commission) has published a communication on the mid-term review of the Capital Markets Union Action Plan (CMU Action Plan).

In its communication, the Commission notes that over the past 18 months, it has delivered more than half of the measures (20 out of 33) announced in the CMU Action Plan.

In terms of outstanding measures, the Commission will move forward with the three legislative proposals that are central to the creation of the CMU:

• a legislative proposal on a pan-European personal pension product by end of June 2017;
• a legislative proposal specifying conflict of laws rules for third party effects of transactions in securities and claims in Q4 2017; and
• a legislative proposal for an EU-framework for covered bonds in Q1 2018. In parallel, the Commission will explore the possibility of developing European Secured Notes as an instrument for small and medium-sized enterprise (SME) loans and infrastructure loans.

In addition, the Commission is also moving forward with its preparatory work on the following measures to implement the commitments in the original Action Plan:

• amendments to the Delegated Regulation supplementing Solvency II in 2018 to review the prudential treatment of private equity and privately placed debt, where prudentially justified, from a risk-based supervisory perspective;
• recommendation on private placements building on the experience of the well-functioning national regimes. The recommendation will be informed by the results of a study, to be published in Q4 2017;
• communication on a roadmap for removing barriers to post-trade market infrastructure in Q4 2017, building on the recommendations of the European Post Trade Forum;
• communication on corporate bond markets in Q4 2017, building on the recommendations of the Expert Group on Corporate Bond Market Liquidity; and
• code of conduct to simplify withholding tax procedures with a focus on refunds by end 2017.

In terms of new priority initiatives, the Commission intends to:

• propose in Q3 2017 amendments to the functioning of the European Supervisory Authorities to promote consistent supervision across the EU;
• explore through an impact assessment whether targeted amendments to relevant EU legislation could deliver a more proportionate regulatory environment to support SME listing on public markets, which could lead to targeted changes in sectoral legislation in Q2 2018;
• present a legislative proposal to review the prudential treatment of investment firms in Q4 2017;
• assess the case for an EU licensing and passporting framework for fintech activities in Q4 2017;
• present measures to support secondary markets for non-performing loans and launch an impact assessment with a view to considering a possible legislative initiative to strengthen the ability of secured creditors to recover value from secured loans to corporates and entrepreneurs in Q1 2018;
• decide by Q1 2018 at the latest on the follow-up to the recommendations of the High Level Expert Group on Sustainable Finance;
• launch an impact assessment with a view to considering a possible legislative proposal to facilitate the cross-border distribution and supervision of Undertakings for Collective Investment in Transferable Securities and alternative investment funds in Q1 2018;
• adopt an interpretative communication to provide guidance on existing EU rules for the treatment of cross border EU investments. The Commission also intends to launch an impact assessment with a view to setting out an adequate framework for the amicable resolution of investment disputes; and
• propose a comprehensive EU strategy on steps that can be taken at the EU level to support local and regional capital market development by Q2 2018.

The new initiatives presented in the communication will be integrated into the Commission’s 2018 work programme with a view to establishing the foundations of the CMU by 2019.

View European Commission mid-term review of CMU Action Plan: financial services aspects, 8 June 2017