EFAMA has released its policy recommendations to unlock private investment in Europe
The issues are well known – Europe needs to mobilise hundreds of billions of euros annually to finance the green and digital transitions, address inadequate pension funding, and strengthen its strategic autonomy in areas such as defence, technologies and supply of critical materials. However, capital markets across the EU remain too small and fragmented, which makes access to market-based finance more complicated for businesses.
To address this challenge, EFAMA has released a new publication detailing the policy priorities of the asset management sector for the next five years, entitled “Unlocking private investment to fund Europe’s triple transitions: towards an enabling regulatory framework”. Building on the in-depth expertise of its members, EFAMA make practical recommendations for developing deeper, more integrated and liquid capital markets in Europe. These recommendations focus around four main objectives.
Make competitiveness a central element of all EU policies
To remain competitive on the global stage, Europe needs to remain an attractive place to invest and do business. New EU regulations should be subject to a competitiveness check, unnecessary reporting requirements should be reduced, focus should be placed on supervision and enforcement of existing regulations, and anti-competitive behaviour in areas like market data should be addressed.
Encourage European savers to invest more and promote retirement saving
Turning more savers into first time investors is a necessary condition for deepening European capital markets. It is also essential for citizens to secure their financial well-being, particularly in retirement. Affordable and quality financial advice, regular financial health-checks, improved financial literacy, reform of occupational pension systems (through the implementation of auto-enrolment mechanisms) and tax incentives (for instance by establishing tax-exempt investment plans for individual retail investors) are all key elements.
Unlock the full potential of sustainable finance by streamlining existing EU regulations
We applaud the leadership role taken by the EU in sustainable finance. But work remains to be done to achieve the objective of financing the transition towards a more sustainable world. Investors need simpler, user-friendly investment disclosures, asset managers need access to reliable ESG data from corporates and third party providers, and various existing regulations should be streamlined to improve their overall consistency.
Promote efficient, stable and integrated European capital markets and support digital innovation
Increasing the efficiency of Europe’s capital markets is necessary to make them more attractive. Improving market transparency by delivering an effective, useful and reasonably priced consolidated tape, removing remaining tax barriers to cross-border investment and ensuring EU capital markets are well-integrated with global markets would all contribute towards this.
Sandro Pierri, EFAMA President and CEO of BNP Paribas Asset Management, commented: “Europe is facing many challenges right now, including the necessity for a green transition, a growing pension finance gap, unprecedented digital transformation and a shifting geo-political environment. Asset managers have a key financing role to play in that regard, as private financing will be an important part of the solution. To be effective however, we need an enabling regulatory environment and this EFAMA publication identifies many significant areas to focus on going forward.”
Tanguy van de Werve, Director General at EFAMA, commented: “The Capital Markets Union is something policymakers have been working on for many years. However, we will never reach the desired end point without the necessary political will. Now is the time for decisive action and leadership if we want to see the EU remain economically competitive on the global stage. This will require ‘top-down’ regulatory initiatives at the EU level, as well as ‘bottom-up’ measures at national level, to make our goals a reality.”
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Note to editors :
You can find the publication with our full priorities here.
For further information, please contact:
Hayley McEwen
Head of Communication & Membership Development
Tel: +32 2 548 26 52
Email: Hayley.McEwen@efama.org
