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The Federation of European Securities Exchanges welcomes the publication of the European Commission’s ‘Action Plan on Building a Capital Markets Union’ which is a thoughtful, well-structured package, giving priority to strengthening the European economy and stimulating investment to create jobs and growth.
We strongly support the aim of the Action Plan to expand European public equity markets to fulfil the goals of the Capital Markets Union. CMU's non legislative and careful approach to policy is a real step forward. In FESE’s Blueprint paper, we already outlined the vision to reverse the debt to equity financing ratio. As an initiator of the European IPO Task Force, we have been calling for action on a European level to facilitate more enterprise financing through capital markets by proposals to reduce the barriers and costs companies face when seeking capital via public markets. In the IPO Taskforce Report it was highlighted that a positive environment for SME funding will only happen with many incremental and supportive changes, rather than sweeping legislative initiatives. It will be equally important to prevent contradictions to the goal of the CMU (such as the introduction of an FTT) and be much bolder with further steps to be added to the CMU agenda.
We echo the Commission’s promotion of greater equity finance for companies, we fully support the development of a policy agenda and we are committed and eager to contribute towards building a Capital Markets Union.
Rainer Riess, Director General said:
‘Efficient public markets are the pivotal stage in the funding escalator, where regulated markets provide companies with the access to capital. We are part of a local ecosystem, which is vital to the development of small and mid-cap financing. The markets we operate are open, accessible, public, transparent, democratic, well-regulated, and highly efficient. Europe needs to shift its focus strongly to equity financing and further improve funding choices for issuers and investment opportunities for investors in order to create jobs and growth.’
There are approximately 9,000 companies listed on FESE Members exchanges, including more than 1,400 listed on specialised markets that allow small and medium sized companies across Europe to access the capital markets, increasing choice for investors and issuers. With this background, we can offer the Commission further insight on how best to serve the funding needs of European companies.
In particular, FESE will focus on the following aspects outlined in the Action Plan:
- The implementation and functioning of the European SME Growth Market Regime.
- Review and analysing how the Prospectus Regime can benefit both companies and investors.
- Analysing what further steps can be taken to reduce costs and regulatory barriers for companies seeking capital and providing greater investment choice to investors.
- Contributing to the Commissions assessment of the cumulative impact of the financial reform on the investment environment.
