Capital Markets Union

Author:Mr Andrew Bates and Jeff Mackey
Profession:Dillon Eustace

The Investment Funds Perspective

In our May 2015 publication entitled "EU Capital Markets Union" (which can be accessed here), we outlined that the EU Commission had issued a consultation paper entitled "Building a Capital Markets Union". That consultation paper raised some broad proposals to a single market for capital within the EU. Following the end of the consultation process and its review of over 700 responses, the EU Commission on 30 September 2015 released a further paper entitled "Action Plan on Building a Capital Markets Union" (the "Action Plan"). The Action Plan can be accessed here.

Priority Actions

The Action Plan identifies the following priority actions that will be put in place to develop a Capital Markets Union by 2019:

providing more funding choices for Europe's businesses and SMEs; ensuring an appropriate regulatory environment for long term and sustainable investment and financing of Europe's infrastructure; increasing investment and choices for retail and institutional investors; enhancing the capacity of banks to lend; and bringing down cross-border barriers and developing capital markets for all EU Member States. Overview of Investment Fund Related Matters

The Action Plan, and the Capital Markets Union in general, will impact on the investment funds sector in numerous ways and, over the coming months, Dillon Eustace will provide you with some further detailed analysis of various proposals and the potential impact of these proposals as they relate to the investment funds sector.

However, some of the key matters to be aware of at this early stage include:

Venture Capital Funds: The EU Commission has recognised that venture capital has a key part to play in providing finance to start-ups and rapidly expanding businesses. The EU has already established an EU venture capital sector through the Regulation on European Venture Capital Funds (EuVECA) and the Regulation on European Social Entrepreneurship Fund (EuSEF). However, the EU Commission has identified limitations in respect of the EuVECA and EuSEF and will be seeking to address these limitations in addition to proposing a range of pan-European venture capital fund-of-funds and multi-country funds. As part of this package to support venture capital the EU Commission will also be reviewing best practices on tax incentives. The EU Commission has released a public consultation on venture capital which will run until 6 January, 2016. The consultation paper can be...

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