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For its 10th anniversary, EuropeanIssuers organised the Capital Markets Forum on the 4th and 5th of December in Brussels.
In his opening remarks, Mr. Luc Vansteenkiste, the Chairman, stated that "EuropeanIssuers has been representing the interests of publicly quoted companies from all sectors to the EU Institutions for the last decade. We believe in the importance of access to finance for companies, to allow them to grow, to fuel the economy and create wealth". Before moving forward, the Chairman reiterated the key priorities stating the “need to create a more balanced and flexible regulatory environment and make EU legislation more proportionate for small and mid-sized companies not only to retain but also attract companies to the market, ease constraints to attract investors by channelling more funds towards capital markets, incentivising investment in equity and creating a tax framework for savings and capital gains. To this end, barriers need to be removed to allow cross border investments. There is a need to streamline EU financial services regulation through flexible access to capital markets, the use of derivative instruments for risk management of non- financial companies and effective dialogue and communication between issuers and investors”.
An important take away from the discussion on the Future of EU Capital Markets Post-Brexit was the necessity to guarantee business continuity within European borders by upholding an equivalence regime and the need to restructure the currently outdated lending system in Europe.
Meanwhile, the panel addressing Capital Markets agreed that legislations and requirements must be streamlined and simplified to accommodate the needs of SMEs and improve their access to capital markets. The consensus was that regulatory harmonisation on its own is unlikely to be enough for market integration.
Following from this, the Revised Shareholder Rights Directive panel discussed the need to curb proxy advisors’ conflicts of interests, and to improve the quality of their recommendations, notably through better disclosure of information and transparency of their methodologies. The panel also discussed guidelines for remuneration. Moreover, the panel discussion leaned toward the digitalisation of shareholder votes and meetings to simplify electronic vote confirmation as well as increase engagement and participation. Nonetheless, the panel did highlight the legal barriers that digitalisation could cause at various national levels.
The last panel on the Future of Corporate Reporting highlighted the need to streamline and simplify financial and non-financial reporting requirements to make them useful for their users and for standardised definitions across various pieces of legislation.
Finally, in his closing remarks, Mr. Luc Vansteenkiste raised important points. He insisted that “In the area of corporate governance, soft law should be preferred to hard law as it provides numerous advantages. Indeed, not only is it progressive, adaptable and reactive by nature, it is also based on concerns reflected in ethical charters and corporate governance rules that consider social and environmental issues”. The Chairman then concluded by saying “Capital markets regulations need to be simplified if we want European markets to remain attractive for companies. In addition, they should be regarded in a proportionate manner so that small and mid-cap quoted companies are an asset class distinct from large, global companies”.
