Crowdfunding: a Fundamental Issue for the EU Capital Markets Union

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Recently, several media including the Financial Times reported the content of a leaked discussion paper on EU capital markets union.

The document, co-written by EU financial services chief Jonathan Hill, sets out a timetable for the first time on a core policy of the European Commission to help revive the bloc’s flagging economy.

While setting an ambitious goal, that is to complete the capital markets union by 2019, the discussion paper also lists a number of actions that can more easily be achieved, such as driving high-quality securitization standards; relaxing capital requirements for insurers and banks investing in infrastructure; streamlining the prospectus requirements on companies raising capital; and aligning standards for covered bond and corporate debt markets.

On the longer term instead, the document  highlights the need to identify and overcome the issues preventing capital from flowing in the European region. With this regard, the discussion paper mentions crowdfunding as a way to improve cross-border investment and encourage private investment into businesses. This is following the ECs earlier communication linked to the long-term financing of the European Union and the opinion of ESMA late 2014.

Although the information comes from a leaked document and it has not been officially confirmed yet, ECN’s reaction to the news is positive: the organization, in fact, has been advocating since 2012 the harmonization of EU capital markets and in particular of crowdfunding schemes and it is proud of having started a constructive dialogue on the topic with the relevant European authorities.

Another point brought up in the document is the creation of a European pension regime which would work alongside the other twenty-eight national ones. This is also another important issue that ECN suggested in a letter submitted to the attention of President Juncker last November.

According to the press the official document should be unveiled next month. If the leaked information should be confirmed, ECN would see it as another important achievement towards the creation of a truly pan-European crowdfunding market. The path is still long and full of challenges and we won’t stop our efforts just yet.

 

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