Capital Markets Union (CMU)

The Capital Markets Union (CMU) seeks to facilitate the development of a more broadly markets-based financial ecosystem within the European Union. To achieve these goals, the European Commission laid out its strategy in the 2020 CMU Action Plan which covers financing initiatives for start-up companies and non-listed companies, fostering long-term infrastructure and sustainable investment flows, and engendering greater retail investment. The completion of concrete initiatives, such as making long-term funds more attractive to retail investors (ELTIFs), the creation of the European Post Trade Forum (EPTF) to examine cross-border settlement, adapting fund regulation (AIFMD/UCITS), and setting up a European Single Access Point for company information, mark a step towards improving Europe’s investment environment.

As high-level political attention is once again turned towards developing Europe’s capital markets to ensure competitiveness, the incoming European Commission in 2024 will face new challenges in launching the next phase of the CMU.

As Europe looks to develop its capital markets capabilities, the role of securities lending is an important component within that process. A vibrant securities lending market supports efficient and transparent price discovery for investors in primary and secondary markets, and provides an important mechanism for transferring collateral around the financial system.

ISLA has been actively involved in dialogue with regulators and policy makers across Europe as the CMU agenda has developed, and we continue to work with member firms to get our voice heard on this important issue.