MEPs called for simplified rules for SMEs, mid-caps and start-ups so that they can receive funding, in a non-binding resolution adopted on Thursday.
The Capital Markets Union (CMU) should be developed more quickly, MEPs say, arguing that this would allow companies deprived of funding to tap into financial markets and reduce their dependence on bank lending.
They take note of the Commission Communication of 24 September 2020 regarding the Capital Markets Union for people and business but insist on a stronger commitment to achieving real progress on issues such as supervision, taxation and insolvency laws, which still represent major obstacles to the true integration of EU capital markets.
To this end, MEPs proposed several targeted changes, aligning and simplifying the existing provisions concerning issues such as: capital requirements, reporting frameworks, or listing requirements for SMEs regarding Initial Public Offerings. They also call for the EU venture capital and private equity markets to be developed more quickly in order to increase transparency and reduce fragmentation. At the same time, the text stresses the need for adequate prudential rules to build the capacity of financial institutions to absorb losses.
The Commission should come forward with several legislative proposals, MEPs suggest, including a proposal on 'European Secured Notes' (ESNs), as a new dual-recourse funding instrument for banks. This could help improve access to financing for SMEs across the EU, or a European Single Access Point for financial and non-financial information in respect to listed and unlisted EU companies.
MEPs point out that the CMU requires a developed investor base with suitable investment options for retail investors paired with improved disclosure and the ability to compare key information. They call for a more horizontal, harmonised approach to consumer and investor protection in EU financial services legislation, adapted to the green and digital transitions, in order to ensure effective and consistent levels of protection for financial products and providers.
Finally, the adopted text highlights that the CMU should be a key contributor to the transition towards a sustainable, competitive and resilient economy, complementing public investment and in line with the EU Green Deal. The text also points out that Europe competes for capital in a global market, therefore efficient and resilient European capital markets are critical to protecting Europe’s economic sovereignty.
The resolution was adopted with 417 votes to 205 and 72 abstentions.