In yesterday’s Financial Times, Jonathan Hill, the EU Commissioner for Financial Services, says he would have no problem being known as le Plombier in Brussels – or ‘the plumber’.
Earlier today he launched three different consultations ultimately aimed at stimulating EU growth by unclogging investment into European companies and infrastructure and building a single EU market for capital that relies less heavily on bank funding.
The first of this series is a consultation on broad policy objectives for a European Capital Markets Union, a flagship project Mr. Hill is in charge of linked to the Commission’s 315 billion Investment Plan for Europe.
It asks questions on EU market infrastructure and securities law (called the ‘piping’ which channels investment in the paper), differences in EU tax regimes that create obstacles to cross-border investments and the development of an integrated European covered bond market, to name but a few.
The second consultation launched today has the ambitious title of ‘an EU framework for simple, transparent and standardised securitisation’. It is a first step away from the post sub-prime crisis aversion to slicing and repackaging loans and one towards developing a framework for ‘high-quality’ securitisation that would stimulate lending to businesses and households.
Given that current rules on EU securitisation are determined by a large number of EU legal acts such as the Capital Requirements Regulation for banks, Solvency II for insurance and the different UCITS directives for mutual funds, it is not yet clear what the Commission’s concrete plans are once the consultation closes. Most likely is that it will propose a single legal instrument amending several pieces of legislation at the same time, known in Brussels as an ‘Omnibus’ directive.
The third consultation presented today is one on the EU prospectus Directive. The Directive, last amended in 2010, lays down rules on prospectuses that must be made available when securities are publically offered or admitted to trading on a regulated market in the EU.
The Commission is trying to identify how it can improve the Directive and asks views on when a prospectus is needed, the information a prospectus should contain and how prospectuses are approved. This including questions on an ‘equivalence regime’ for third-country prospectuses and the potential alignment of the prospectus sanctioning regime with that of the other EU directives such as MIFID II.
All consultations close on 13 May 2015, after which le Plombier will need to get out his toolkit and roll up his sleeves. There is some heavy plumbing ahead.