Capital Markets Union: Towards Regulatory Harmonization and Supervisory Convergence

This chapter looks at recent initiatives in the context of the European Commission's flagship plans for a Capital Markets Union (CMU) designed to encourage a pan-European private placement market. In reality, private placements are mainly available as a funding tool for medium-sized and larger companies. Nonetheless, private placements are regarded by CMU's policymakers as an alternative source of long-term funding, which is simple enough for smaller corporates and small and medium-sized enterprises (SME), and with benefits that they might find attractive. The Commission's initial intention in the design of a CMU was to enable a greater use by SMEs of private placements.

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Initial Public Offerings in the CMU

10.1093/oso/9780198813392.003.0013 ◽

2018 ◽

Author(s):

Merritt B Fox

Keyword(s):

Information Asymmetry ◽

Initial Public Offerings ◽

Capital Markets ◽

Final Section ◽

Public Offerings ◽

Rating Agencies ◽

Capital Markets Union ◽

Preceding Discussion ◽

Directors And Officers

This chapter begins by considering the especially severe information-asymmetry problem that plagues primary offerings of truly new securities. It then examines market-based solutions for these problems, the shortcomings of exclusive reliance on such solutions, and the rationale for having a government-designed affirmative-disclosure regime, whereby an issuer making an offering is required to answer certain questions. It also addresses the question of whether this regime should be imposed on all issuers making such offerings or only those that volunteer to be subjected to it. The remainder of the chapter considers the rationale for mandating the imposition of liability on issuers, issuer directors and officers, underwriters, dealers, and experts such as accountants or rating agencies when there have been material misstatements or material omissions of what was required to be disclosed. The final section briefly applies the preceding discussion to the efforts, as part of the Capital Markets Union, to increase the opportunities for European SMEs raise funds through public offerings.

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The Role of Financial Innovation in EU Market Integration and the Capital Markets Union

10.1093/oso/9780198813392.003.0008 ◽

2018 ◽

Author(s):

Emilios Avgouleas

Keyword(s):

Capital Markets ◽

Risk Sharing ◽

Market Integration ◽

Financial Innovation ◽

The European Union ◽

Recent Developments ◽

Capital Markets Union ◽

Critical Overview ◽

The Eu

This chapter offers a critical overview of the issues that the European Union 27 (EU-27) will face in the context of making proper use of financial innovation to further market integration and risk sharing in the internal financial market, both key objectives of the drive to build a Capital Markets Union. Among these is the paradigm shift signalled by a technological revolution in the realm of finance and payments, which combines advanced data analytics and cloud computing (so-called FinTech). The chapter begins with a critical analysis of financial innovation and FinTech. It then traces the EU market integration efforts and explains the restrictive path of recent developments. It considers FinTech's potential to aid EU market integration and debates the merits of regulation dealing with financial innovation in the context of building a capital markets union in EU-27.

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Capital Markets Union after Brexit

10.1093/oso/9780198813392.003.0001 ◽

2018 ◽

Author(s):

Danny Busch ◽

Emilios Avgouleas ◽

Guido Ferrarini

Keyword(s):

Capital Markets ◽

Action Plan ◽

Economic Perspective ◽

Institutional Investment ◽

Fully Integrated ◽

Cross Border ◽

Better Regulation ◽

Capital Markets Union ◽

To Come ◽

General Aspects

In line with the European Commission's wish to create fully integrated European capital markets, its Capital Markets Union (CMU) Action Plan is intended to make it easier for providers and receivers of funds to come into contact with one another within Europe, especially across borders. This book discusses various aspects of CMU from a legal and/or economic perspective. The chapters are grouped in a thematic way, covering the following areas: (i) general aspects, (ii) Brexit, (iii) financing innovation, (iv) raising capital on the capital markets, (v) fostering retail and institutional investment, (vi) leveraging banking capacity to support the wider economy, and (vii) facilitating cross-border investing. This chapter outlines some general aspects of CMU that are not explicitly covered by the other chapters in this book: (1) the CMU objectives, (2) the EBU–CMU relationship, (3) regulatory burden, and (4) Better Regulation and the Call for Evidence.

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