‘Capital Markets Union: ‘What’s in it for companies?’, roundtable hosted by the European Issuers, AFEP (French Association of Large Companies) and Deutsches Aktieninstitut, on Monday 28 November



Lé Quang Tran Van, Director for Financial Affairs, AFEP (French Association of Large Companies)


Michael Theurer, MEP (ALDE Group, Germany)
Niall Bohan, Head of Unit for the Capital Markets Union at the European Commission’s DG FISMA
Luc Vansteenkiste, Chairman of EuropeanIssuers
Martin Wilhelmi, Senior Legal Counsel in Allianz SE’s Legal and Compliance Department


The Capital Markets Union (CMU) project aims to stimulate the flow of capital throughout the European Union by making it easier for companies to raise finance in capital markets. The roundtable looked at the merits of having a CMU, at how companies should be dealt with in the CMU and the need to reduce excessive reporting requirements.

  • Capital Markets Union needed to help EU compete at the global level

  • Commission acknowledges need for “lighter touch regime” for mid-sized companies on the capital markets

  • Company prospectuses are an example of where reporting requirements can be eased


Niall Bohan, the Head of Unit responsible for the European Commission’s Capital Markets Union project, explained that the financial crisis had taken its toll on banks’ financial capacity and that there was a need for non-bank finance to ensure that long-term institutional money and surplus household savings can be reallocated to the real economy (e.g. into SMEs and energy infrastructure).


MEP Michael Theurer argued that the CMU was needed “to increase capital market finance in the EU vis a vis bank loans”. Currently around 30% of company finance is raised through capital markets and 70% through bank loans, the reverse of the situation in the US. He called for a review of financial legislation to encourage long-term investment, notably CRR and Solvency II, for a moratorium on banks’ prudential requirements and for swift progress on securitisation and insolvency.


Mr Bohan also acknowledged the need “to make the CMU relevant for a cohort of mid-sized companies”, that “smaller companies need a lighter touch regime”. He said that the Commission’s call for evidence on the regulatory framework on financial services recognised a need to do more on that.


“The EU needs the CMU to compete with countries like the US, China and Russia,” said Luc Vansteenkiste, the Chairman of EuropeanIssuers. He called for abandoning the public country by country reporting initiative, as it would not bring any benefit in terms of fight against tax avoidance but would endanger the competitiveness of EU companies. In terms of administrative burdens and reporting requirements, he felt that small and medium-sized quoted companies should be given separate treatment and that a single legal EU definition of who those companies are is needed for that purpose. He also argued that, in terms of the balance between investors and companies, “the focus has become too much on disclosure, while investor protection could be better achieved by financial education.” As an example, he mentioned company prospectuses that are costly but that no-one reads


Martin Wilhelmi, Senior Legal Counsel in Allianz SE’s Legal and Compliance Department, picked up on that point and said that company prospectuses are written for potential litigation cases, “are written for lawyers by lawyers and are not addressed to investors”. As an example, he cited a 900-page document issued by Commerzbank containing 300 pages of financial information that had already been disclosed on the company’s home page. He said the current review of the Prospectus should focus on essential information on risks and securities and deliver a more relevant summary.

The ongoing revision of the EU’s Prospectus Directive aims to make company prospectuses shorter and less heavy, although it is now being questioned whether it will deliver


On the issue of a possible Financial Transaction Tax being discussed by ten EU countries, Mr Vansteenkiste said that it is “not a level playing field if you pay taxes in one country and not in another”. “If there is a tax on transactions, it should be all or no countries but not ten out of 28 countries.”

Capital Markets Union discussion looks at companies and reporting requirements