The plan aims to tackle investment shortages by increasing and diversifying the funding sources for Europe’s businesses and cross-border long-term infrastructure projects, by making it easier to access alternative sources of finance such as capital markets, venture capital, crowdfunding and the asset management industry.

Commissioner Jonathan Hill, responsible for financial stability, financial services and capital markets union said: ‘I want the CMU to help European businesses, and SMEs in particular, have a [access to] wider range of funding sources. I want it to give consumers more options for investing their money. I want to knock down barriers to make it easier for capital to flow freely across all 28 member states.’

In the first stage of creating the CMU, the European Commission is proposing changes to the regulatory framework for securitisation; new rules on Solvency II treatment of infrastructure projects; and a public consultation on venture capital to see whether changes to the rules around who is able to manage such funds and the level of minimum investment required will make this option more attractive to SMEs. There will also be a consultation on a pan-European framework for covered bonds.

In addition, the Commission has announced a consultation to gather feedback and gauge the cumulative impact and interaction of current financial rules, with the aim of identifying possible inconsistencies, incoherence and gaps in financial rules, as well as unnecessary regulatory burdens and factors negatively affecting long-term investment and growth.

Giles Williams, regulatory partner at KPMG, welcomed publication of the CMU action plan, saying it should deliver ‘clear benefits for businesses and investors’. 

‘Policy makers and the industry now need to work together to ensure that CMU delivers the benefits it seeks.  The financial services industry must seize the opportunity and play an active part,’ he said.

ACCA was also positive in its response to the plan’s proposals, saying they ‘generally go in the right direction’, but warning against hasty design or poor implementation.

Rosana Mirkovic, head of SME affairs at ACCA said: 'The role of other stakeholders, such as SME advisers, should have a stronger emphasis in the Commission’s plans. Not all demand for finance manifests itself through applications for bank credit and this should be carefully considered in future proposals.'

The consultation and details on the Call for evidence: EU regulatory framework for financial services, which closes on 6 Jaunary 2016, is available here

Further information on the CMU is available here

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