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EFAMA Response to EC Consultation: Capital Markets Union mid-term review 2017

Capital Markets Union
16 March 2017 | Policy position
Capital Markets Union
EFAMA Response to EC Consultation: Capital Markets Union mid-term review 2017

• EFAMA reiterates the European asset management industry’s strong support for the CMU project in all its dimensions. We welcome the range of initiatives, from the overarching aim of rebuilding confidence in financial markets by putting investors’ interests at the heart of the project, to the promotion of market-based financing of the economy, the development of a PEPP or the development of a comprehensive strategy on sustainable finance.


• Investor confidence is the number one premise for ensuring the success of the CMU project. Investors’ interest needs to be the heart and soul of any EU action. A key element of this continues to be financial education, which we firmly believe the European Commission as well as the ESAs need to promote further in parallel to regulation. We would like to mention the European Platform for Financial Education, recently created by a group of nine European organisations and associations, amongst which is EFAMA. The initiative aims to promote the need for financial education and to boost financial literacy in Europe.


• EFAMA also supported the ambitious parallel exercise of assessing the cumulative impact of financial regulation. Much remains to be done, and we welcome the Commission’s efforts to address the numerous unintended consequences. In itself, this work would sufficiently fill the agenda of EU policymakers for the future. • We firmly believe investment funds are a success story which can inspire a well-functioning EU Single Market in other areas. UCITS is a very good example of that. We would therefore encourage the European Commission to pave the way for further deepening the Single Market for investment funds. A key objective of the CMU should be to bring down remaining barriers for cross-border fund distribution. This is essential to provide a larger and more diversified choice of investment and saving opportunities for European citizens, increase competition in the markets, allow for further innovation and reduce the costs and fees.


• We reaffirm our strong support for the Commission’s continued efforts for improving the Single Market for retail financial services. It is essential for the European Union to provide retail investors with better access to the capital markets as this will create potential for citizens’ savings, which are currently under-exploited. With this in mind, we have taken note of the fact that the European Commission and the ESAs are currently undertaking studies on the distribution of retail investment products. We take note however of the fact that a new wave of EU legislation (MiFID II, PRIIPs and IDD), about to come into force in early 2018, will significantly enhance product disclosures and distribution rules for retail investment products. Parallel studies on disclosures conducted at a time when MiFID II/PRIIPs/IDD are not fully implemented or in force may fail to consider, or pre-empt in the best of cases, the effects of these new pieces of legislation.


• EFAMA welcomes the Commission’s plans for a legislative proposal on personal pensions across the EU. We remain strongly convinced that European households and savers need to be encouraged to save more for retirement. EFAMA has for long advocated for the creation of a PanEuropean Personal Pension product (PEPP). In our view, the PEPP would be the appropriate policy tool to create a true single market for personal pensions, and would contribute to growth and investment within a CMU. For EU citizens, this would ensure delivery of cost-efficient, simple and portable personal pensions. And providers would be able to provide similar products within a wide range of Member States, which should lead to economies of scale, lower costs and increased competition.


• EFAMA is also very supportive of the CMU’s focus on sustainable finance. With citizens and companies increasingly feeling a responsibility to take part in addressing environmental, social and governance (‘ESG’) challenges in their investments, asset managers, as the linchpin between investor’s savings and the real economy, have a crucial role to play in providing the tools and advice for selecting responsible investments. In this regard, we would highlight the importance of pursuing a sustainable finance agenda focused on a balance of the three E, S and G pillars.


• EFAMA’s response to the CMU Mid-Term Review consultation aims to be a reminder of the asset management views on the many initiatives under the CMU umbrella. Much remains to be done to achieve the ambitious objectives of the CMU, and EFAMA will stand ready to support the various workstreams. Asset managers want to continue playing a part in the changing landscape of a more capital market based economy. We stand ready to continue the open and constructive dialogue with EU institutions to achieve a successful Capital Markets Union.

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