1. Introduction:
As of today, the Commission's priority is to strengthen Europe's economy and stimulate investment to
create jobs. To do so for the long term, the Commission will try to promote stronger capital markets, thus a
single Capital Market for all 28 countries via CMU. Such an Union will be supposed to strengthen the links
between savings and growth, provide more options for investors and savers and offer more funding choices
for businesses.
For instance, comparison with the United States shows that the growth potential for capital markets in Europe
remains very strong: if venture capital markets were as deep as in the US, more than EUR 90 billion would
have been available to finance companies between 2009 and 2014.
Provide more funding choices for Europe's businesses and SME (Small and Medium Enterprises)•
Ensure an appropriate regulatory environment•
Increase investment and choices for retail and institutional investors•
Enhance the capacity of banks to lend•
Bring down cross-border barriers and develop capital markets for all 28 members•
There is no single measure that will deliver a Capital Market Union; instead, the Commission will take
measures to progressively remove the barriers between businesses and investors. The main actions will be to:
The Path to Growth: Financing for Innovation, start-ups and non-listed companiesI.
Starting-up companies are critical to growth within Europe: SMEs represent two third of the
employment and 58% of added value. Nevertheless, funding channels for developing firms are
underdeveloped in Europe: more than 75% of their funding come from bank loans. A successful CMU will
broaden the range of financing options for them.
1.1 Financing the start-up phase
In recent years, to complement the bank-financing network, non-bank financing options have emerged
to finance SME, including business angels and crowdfunding. The Commission will have to assess
national regimes and best practice and monitor the evolution of the crowdfunding sector.
Europe also needs a stronger network of business angels, that is why the Commission will support cross-
border networking and capacity building for business angels, especially in Central and Eastern Europe.
1.2 The early expansion phase
Venture capital has a key part to play in supporting growth and offering entrepreneurs an option to
raise funding in Europe or overseas, as bank overdraft or short term loans are not enough to meet
the need of rapidly expanding firms with high growth opportunities but limited working capital. The
Commission will take forward a comprehensive package of measure to support venture capital and risk
capital financing in the EU. This will include amending the Regulation on European Venture Capital
Funds (EuVECA) and the Regulation on European Social Entrepreneurship Funds (EuSEF) legislations
and proposal for a range of pan-European venture capital funds-of-funds and multi-country funds,
supported by the EU budget to mobilize private capital. This comprehensive budget will also include the
promotion of best practices in tax incentives.
1.3 Supporting SMEs seeking finance
The Commission will take forward a comprehensive approach to overcome information barriers that
prevent SMEs and prospective investors from identifying funding or investment properties.
1.4 Loan originating funds
As the number of direct lending funds grew from 18 in 2012 to 40 today, there is an always more urgent
need for clarification of their treatment in the regulatory framework (EuVECA and European Long
Term Investment Funds (ELTIF)), to facilitate cross-border development while ensuring investor
protection as well as financial stability.
1.5 Private Placement
Due to the restricted number and type of investors, the regulatory requirements are not as heavy as the
Pages (source) :
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Date prévisionnelle de mise en œuvre :
Report on crowdfunding: Q1 2016
Study on tax incentives for venture capital
and business angels: 2017
Proposal for pan-European venture capital
funds-of-funds and multi-country funds:
Q2 2016
Revise EuVECA and EuSEF legislation: Q3
2016
Study on tax incentives for venture capital
and business angels: 2017
Strengthen feedbacks given by banks
declining SME credit application: Q2 2016
Map out local or national support to
promote best practices: 2017
Develop a coordinated approach to loan
origination by funds and assess the case
for a future EU framework: Q4 2016
Source: http://ec.europa.eu/finance/capital-markets-union/docs/building-cmu-action-plan_en.pdf (communication de la Commission Européenne au Parlement Européen au 30/09/2015)
European Commission Building CMU Action Plan
CMU Page 1

2. Term Investment Funds (ELTIF)), to facilitate cross-border development while ensuring investor
protection as well as financial stability.
1.5 Private Placement
Due to the restricted number and type of investors, the regulatory requirements are not as heavy as the
other funding channels. However, a greater volume of funds is raised by European companies in the US
than in Europe: the Commission will seek to promote them in the EU "through appropriate initiatives".
Making it Easier for Companies to Enter and Raise Capital on Public MarketsII.
Public markets are the main way for the transition of high-growth mid-sized companies to established global
players. Nevertheless, many SMEs consider that the listing cost outweighs the benefits of raising capital on
public markets. The Commission will therefore have to reduce these costs. To do so, the Prospectus Directive
will be revised to create a genuinely proportionate regime for SMEs. The Commission will also review the
regulatory barriers to SMEs for their admission on public market, and, through the implementation of
MiFID II, ensure that the requirements needed from SMEs will strike the right balance between providing
investors' protection and avoiding administrative burden. The Commission will also review the
functioning of corporate bond markets to increase their liquidity. Finally, via the Common Consolidate
Corporate Tax Base (CCCTB), the Commission will try to weaken the tax bias, encouraging more equity
investment.
Investing for the Long Term, Infrastructure and Sustainable InvestmentIII.
3.1 Improving the investment environment through the regulatory framework
To promote investment in infrastructure and sustainable investment, the Commission wishes to
revise calibrations in Solvency II in order to ensure that insurance companies are subject to a regulatory
treatment which better reflect the risks.
3.2 Supporting long-term and infrastructure financing
Since the crisis, a large investment gap - estimated at more than EUR 2 trillion until 2020 - is left.
Institutional and private investors can be an important source of funding; to kick start this process,
under the Investment Plan, the European Fund for Strategic Investment (EFSI) will mobilize EUR 315
billion.
3.3 Harnessing finance to deliver environmental sustainability
The Commission will continue to assess and support transparency and integrity in the development of
"green bonds" market to help investors benefit from a more long term and sustainable to investment
decisions.
3.4 Call for evidence on existing regulatory framework
In parallel with this Action Plan, the Commission is launching a comprehensive review to assess the
overall coherence of the financial regulation, as many pieces of legislation were adopted successively
within the past years.
Fostering Retail and Institutional InvestmentIV.
The CMU's aim is to put European savings to better use, improving the efficiency through which savers and
borrowers are matched: with increasing life expectancy and changing demographics, retail investors need to
save more to meet their retirement need while institutional investors dealing with low rates environment
cannot find sufficient investments to meet their commitments.
4.1 Retail investors
Today, retail investors have significant savings in bank accounts but are less involved in capital
market than in the past: direct European share ownership has dropped from 28% in 1975 to 10% since
2007. To encourage them to invest, the Commission will promote more transparency of long term retail
and pension products. A policy framework to establish a successful European market for personal
pensions also shall be assessed by the Commission.
Large intermediation fees are also a barrier to investment; that is why the Commission will seek to
increase the cost-effectiveness and examine how the regulatory framework should evolve to benefit the
new possibilities offered by online based services.
4.2 Institutional investors
Life insurance companies and pension funds' European share ownership dropped from 25% in
1992 to 8% in 2012. The Commission thinks that the EU should support institutional investors to allow
their exposure to long term assets and SMEs, if necessary by amending the Solvency II framework.
Investment funds are an increasingly important holder of EU shares and bonds. They will also benefit
from the elimination of unjustified barriers to their cross-border distribution.
Leveraging Banking Capacity to Support the Wider EconomyV.
Being lenders to a substantial part of the economy and intermediaries to capital markets, banks will play a
great role in the CMU.
The Commission will therefore review the regulation being applied to them to find the equilibrium between
managing risk and supporting growth. To support the financing of SMEs, the Commission will explore the
possibility for each Member to authorize credit unions operating outside of the EU's capital requirements for
banks.
Securitization is also another tool increasing the availability of credit while reducing the cost of funding.
In order to revive securitization without undoing the regulation addressing the risks of opaque and complex
securitization, the Commission will promote simple, transparent and secured (STS) products and provide
financial support to securitization operations.
Furthermore, an EU framework dealing with covered bonds would reduce disparities between the Members'
regulations, and, doing so, limit obstacles to market depth. This will also support SMEs loans.
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origination by funds and assess the case
for a future EU framework: Q4 2016
Review regulatory barriers to SME
admission on public markets: 2017
Review EU corporate bonds, focusing on
how the market liquidity could be
improved: 2017
Address the debt-equity bias as part of the
legislative proposal on CCCTB: Q4 2016
Adjust Solvency II calibrations for
insurers' investment: Q3 2015
Call for evidence on the cumulative impact
of the financial reform: Q3 2015
Green paper on retail financial services
and insurance: Q4 2015
EU retail investment product markets
assessment: 2018
Assessment for the case for a policy
framework to establish European
pensions: Q4 2016
Explore the possibility for all Members to
authorize credit unions outside the capital
requirements rules for banks: Ongoing
Proposal on STS securitizations and
revision for the capital calibrations for
banks: Q3 2015
Consultation on a EU-wide framework for
covered bonds and equivalents to SMEs:
Q3 2015
CMU Page 2

3. securitization, the Commission will promote simple, transparent and secured (STS) products and provide
financial support to securitization operations.
Furthermore, an EU framework dealing with covered bonds would reduce disparities between the Members'
regulations, and, doing so, limit obstacles to market depth. This will also support SMEs loans.
Facilitating cross- border investmentVI.
6.1 Legal certainty and market infrastructure for cross-border investing
Uncertainties concerning securities ownership in the context of cross border investments is a
brake to these operations and a source of economical frustration. The Commission will have to propose
uniform rule to determine which set of national rules applies to third party with legal certainty. The
resilience of cross-border settlements is also threaten by issues as pointed out by Giovannini report -
most of them derive from differences in national laws concerning private property or insolvency. The
Commission will review possible solutions to undertake these problems.
6.2 Removing national barriers to cross-border investments
Barriers may arise from legal or administrative rules and practices. For all of those which are not
addressed through other actions, the Commission will work separately with Member States.
Convergence of insolvency and restructuring proceedings between Members would make it easier to
assess credit risk for cross-border investments. Moreover, according to World Bank 2015, EU countries'
laws average is lesser than the OECD's. Therefore, and in view of the poor changes since its 2014
recommendation, the Commission will propose a legislative initiative on insolvency including
restructuring and second chance, to reduce the length and the cost of proceedings.
Taxes, and in particular withholding taxes and discriminatory taxes against cross-border
investment made by life insurance companies and pension funds, are viewed as a nuisance by the
Commission who will encourage relief-at-source tax to deal with the former and, where necessary,
initiate infringement procedures to deal with the latter.
Finally, the Commission has found around 200 bilateral treaties between Members which set varying
sets of treatment for cross-border investment. This is incompatible with the EU law and the definition of
single market: the Commission will take legal actions against such practices and explore whether
additional action to strengthen safeguards.
6.3 Promoting financial stability and supervisory convergence
By promoting more diverse funding channels, the Commission will help to increase the resilience of
the EU to financial shifts. In the continuity of reforms already in place (like EMIR or MiFID), the
Commission, alongside concerned boards, will conduct further analytical work and eventually make any
changes necessary to the macro-prudential framework. The Commission will also work on implementing
a strategy to strengthen supervisory convergence and identify areas where a more integrated approach
can improve the single market for capital.
6.4 Facilitating international investment
Given the nature of capital markets, the Commission will take account of the global context and ensure
that European Capital Market remains part of the international financial system. In addition, the
Commission will seek to establish cooperation frameworks with key third party countries. The
Commission will also work alongside the OECD in the context of its Codes of Liberalization of Capital
Movements.
Next Steps and MonitoringVII.
The successful adoption and implementation of this Capital Market Union will require a sustained and
concerted efforts by all 28 Members and the Commission will have to work with the European Parliament
to take forwards these proposals. The success of the CMU will also depend on market participants,
especially financial intermediaries that must restore the trust of their clients and build confidence in capital
markets in Europe.
The Commission will report regularly to the European Parliament and Member States on progress.
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Consultation on a EU-wide framework for
covered bonds and equivalents to SMEs:
Q3 2015
Targeted action on securities ownership
rules and third-party effects of assignment
of claims: 2017
Review progress in removing remaining
Giovannini barriers: 2017
Report on national barriers to the free
movement of capital: Q4 2016
Legislative initiative on business
insolvency, addressing the most important
barriers to the free flow of capital: Q4
2016
Best practices and code of conduct for
relief-at-source from withholding taxes
procedures: 2017
Study on discriminatory tax obstacles to
cross-border investment by pension funds
and life insurers: 2017
Strategy on supervisory convergence to
improve the functioning of the single
market for capital: Ongoing
Review of the EU macroprudential
framework: 2017
CMU Page 3

4. The Path to Growth: Financing for Innovation, start-ups and non-listed companiesI.
1.1 Financing the start-up phase
-assess national regimes and best practice and monitor the evolution of the crowdfunding sector
-stronger network of business angels: support cross-border networking and capacity building for business angels, especially in Central and Eastern Europe
1.2 The early expansion phase
amending the Regulation on European Venture Capital Funds (EuVECA) and the Regulation on European Social Entrepreneurship Fun ds (EuSEF)•
proposal for a range of pan-European venture capital funds-of-funds and multi-country funds•
-comprehensive package of measure to support venture capital and risk capital financing in the EU:
-promotion of best practices in tax incentives.
1.3 Supporting SMEs seeking finance
-overcome information barriers that prevent SMEs and prospective investors from identifying funding or investment properties.
1.4 Loan originating funds
-need for clarification of their treatment in the regulatory framework (EuVECA and European Long Term Investment Funds (ELTIF)).
1.5 Private Placement
-promote them in the EU "through appropriate initiatives".
Making it Easier for Companies to Enter and Raise Capital on Public MarketsII.
-creation of a genuinely proportionate regime for SMEs
-review the regulatory barriers to SMEs for their admission on public market
-with the implementation of MiFID II, ensure that the requirements both provide investors' protection and avoid administrative burden
-review the functioning of corporate bond markets to increase their liquidity
-via the Common Consolidate Corporate Tax Base (CCCTB), try to weaken the tax bias, encouraging more equity investment.
Investing for the Long Term, Infrastructure and Sustainable InvestmentIII.
3.1 Improving the investment environment through the regulatory framework
-revise calibrations in Solvency II to ensure that insurance companies are subject to a regulatory treatment which better reflect the risks
3.2 Supporting long-term and infrastructure financing
-under the Investment Plan, the European Fund for Strategic Investment (EFSI) will mobilize EUR 315 billion.
3.3 Harnessing finance to deliver environmental sustainability
-continue to assess and support transparency and integrity in the development of "green bonds" market.
3.4 Call for evidence on existing regulatory framework
-assess the overall coherence of the financial regulation, as many pieces of legislation were adopted successively within the past years.
Fostering Retail and Institutional InvestmentIV.
-put European savings to better use, improving the efficiency through which savers and borrowers are matched
4.1 Retail investors
-promote more transparency of long term retail and pension products
-a policy framework to establish a successful European market for personal pensions also shall be assessed by the Commission.
-seek to increase the cost-effectiveness
-examine how the regulatory framework should evolve to benefit the new possibilities offered by online based services.
4.2 Institutional investors
-support institutional investors to allow their exposure to long term assets and SMEs, if necessary by amending the Solvency II framework
-investment funds will also benefit from the elimination of unjustified barriers to their cross-border distribution.
Leveraging Banking Capacity to Support the Wider EconomyV.
-review the regulation being applied to them to find the equilibrium between managing risk and supporting growth.
-explore the possibility for each Member to authorize credit unions operating outside of the EU's capital requirements for banks.
-to revive securitization, promote simple, transparent and secured (STS) products and provide financial support to securitization operations.
-an EU framework dealing with covered bonds would reduce disparities between the Members' regulations, and, doing so, limit obstacles to market depth
Facilitating cross- border investmentVI.
6.1 Legal certainty and market infrastructure for cross-border investing
-uniform rule to determine which set of national rules applies to third party with legal certainty
-review possible solutions to undertake issues as pointed out by Giovannini report.
6.2 Removing national barriers to cross-border investments
-for administrative rules and practices which are not addressed through other actions, work separately with Member States
-propose a legislative initiative on insolvency including restructuring and second chance, to reduce the length and the cost o f proceedings
-encourage relief-at-source tax
-initiate infringement procedures to deal with discriminatory taxes against cross-border investment
-take legal actions against bilateral treaties between Members and explore whether additional action to strengthen safeguards.
6.3 Promoting financial stability and supervisory convergence
-conduct further analytical work and eventually make any changes necessary to the macro-prudential framework
-implementing a strategy to strengthen supervisory convergence and identify areas where a more integrated approach can improve the single market for capital.
6.4 Facilitating international investment
-ensure that European Capital Market remains part of the international financial system
-establish cooperation frameworks with key third party countries
-work alongside the OECD in the context of its Codes of Liberalization of Capital Movements
2015 / 2016 / 2017 / Not detailed
CMU Page 4