The Capital Markets Union (CMU) is a plan from the European Commission that aims to create deeper and more integrated capital markets in the 28 Member States of the EU. The CMU is a new frontier of the Europe´s single market. Its creation is a key element of the Investment Plan announced by the Juncker Comission in November 2014.
The CMU is one of the top ten priorities for the Commission and is a plan to improve for international investments in the EU and investments between countries in the EU. The investors shall be able to invest their funds without obstacles across borders and business shall be able to raise the required funds from a diverse range of sources, irrespective of their location. The Commission also wants a review of Esma, EBA and Eiopa to improve for cross-border investments without unnecessary national obstacles. The purpose from the Commission is to help the EU to attract investments from all over the world and become more competitive.
With the CMU, the Commission will explore ways of reducing fragmentation in financial markets, diversifying financing sources, strengthening cross border capital flows and improving access to finance business, especially for small and medium-sized enterprises (SMEs). The Commission wants to create rules for SMEs that shall be a standard in the CMU to help SMEs raise finance more easily. The CMU also include implementation of the European Long-term Investment Funds (ELITIF) regulation, high quality securisation, private placement and the review of the Prospectus Directive. The ELITIFs is a new form of fund vehicle that The Council adopted a regulation on the 20th of April 2015 and is expected to provide investors with virtue of asset classes that they will be allowed to invest in to provide long-term stable returns.
For securisation and prospectus directive the Commission has decides to launch specific consultations in conjunction with the Green Paper on the CMU. For securisation the plan is to create a new model different from the model that was created before the financial crisis in 2008.
The modelling of the CMU will be a long-term project and the plan is that the CMU will come into force in 2019.