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Briefing

Understanding the EU Capital Markets Union

Contribute to the open consultation

The European Commission (EC) recently announced plans to explore creating more integrated and deeper capital markets across its 28 Member States. Targeting a 2019 launch, the Capital Markets Union (CMU) aims to streamline financial markets and allow businesses access to more diverse financing sources, regardless of geographic location within the EU. 

Grant Thornton wants to hear your feedback on the proposal and its impact on your business. Have your voice heard by sharing your views in our poll of dynamic organisations Grant Thornton works with.   

The EC's Capital Market Union objectives are to:

  • develop a more diversified financial system complementing bank financing with deep and developed capital markets
  • unlock the capital around Europe which is currently frozen and put it to work for the economy, giving savers more investment choices and offering businesses a greater choice of funding at lower costs
  • establish a genuine single capital market in the EU where investors are able to invest their funds without hindrance across borders and businesses can raise the required funds from a diverse range of sources, irrespective of their location.

The impact on dynamic businesses

Will the CMU positively impact the dynamic businesses that drive growth across the EU? The EC estimates today that the EU’s medium sized enterprises receive one fifth of the funding that their counterparts in the United States can access. Clearly the EC would like to eliminate the gap, allowing the growth engine of the EU to benefit from simpler, more ready access to capital with an intended benefit of stronger growth and jobs.

Reviewing the EC's priorities we think the following are particularly relevant for dynamic businesses.

  • Addressing the prospectus barrier

    Businesses frequently cite the challenges of obtaining the data and approvals required to complete a prospectus addressed to potential shareholders. A consultation will review how the prospectus regime can be improved to reduce barriers to the capital markets, with a specific goal to boost the take up of small and medium-sized enterprises (SME) growth markets.

  • Creating common approaches to credit scoring

    Today, more than 75% of owner-managed companies don’t have a credit score; in 2015 the EC will hold workshops on SME credit information to begin work on this topic and address the wide variation in credit data requirements.

  • Continuing to lay the groundwork for a robust European private placement market

    Mid-sized European companies raised more than €13 billion from US private placements in 2013 and more than €15 billion from Germany and France in 2013. Access to a comparable Europe-wide market could provide a valuable funding source for mid-sized businesses, but barriers exist. A market guide created by a group of industry leaders has addressed the first steps addressing the need for standardised processes, documentation, and creditworthiness information for issuers.

Have your say: participate in the open consultation  

To begin its work addressing the barriers to an effective CMU, the EC has launched a three month consultation period (ending 15 May 2015) with the release of its Green Paper.  As part of that process, Grant Thornton wants to hear your feedback on the proposal and its impact on your business. Please share your views in our poll, or you can share your thoughts directly with the EC via the CMU consultation website.