09 June 2017
Reporter: Stephanie Palmer

European Commission hands more power to ESMA after CMU review

The European Commission is to hand the European Securities and Markets Association (ESMA) more powers in order to improve the effectiveness of the Capital Markets Union.

In its mid-term review of the CMU, launched in January, the commission set out a list of new priority actions, including to “strengthen the powers of ESMA to promote the effectiveness of consistent supervision across the EU and beyond”.

The CMU action plan was first published in September 2015, and laid out measures to strengthen the capital markets in order to make the economy more resilient. The union is intended to provide alternative sources of financing and more funding opportunities for institutional investors.

Further new priority actions include delivering a more “proportionate regulatory environment” for small and medium-sized enterprises listed on public markets; a review of the prudential treatment of investment firms; facilitating cross-border distribution of UCITS and alternative investment funds; and providing guidance on treatment of cross-border EU investments.

The EC will also “assess the case for an EU licensing and passporting framework” for activities related to financial technology.

European Commission vice-president Jyrki Katainen, said: "We are now expanding our scope to meet new challenges such as funding sustainable investment and harnessing the potential of fintech.”

“The new measures presented here today renew and reinforce the commission's commitment and set us on an irreversible path towards the CMU.”

European Commission vice-president Valdis Dombrovskis, who is responsible for financial stability, financial services and the CMU, added: “As we face the departure of the largest EU financial centre, we are committed to stepping up our efforts to further strengthen and integrate the EU capital markets. This review makes clear the scale of the challenge and we count on the support of the European Parliament and member states to rise to it.”

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