Ian Sayers, Chief Executive, Association of Investment Companies, said: "The Commission's action plan for building a Capital Markets Union (CMU) is a positive step towards providing a stable alternative to bank financing for the real economy.
"The Action Plan highlights a number of issues that the AIC identified in its response to the Green Paper such as encouraging investment in SMEs and long-term infrastructure projects, as well as streamlining the regulatory framework for financial services to remove overlaps and avoid inconsistencies. Investment companies allow retail and institutional investors to access a variety of asset classes, including both SMEs and long-term infrastructure projects. Any work done to reduce costs whilst providing appropriate regulatory oversight should be welcomed and encouraged by the sector and investors alike.
"There is significant work to be done to realise the aims of the Commission. The industry should be encouraged by the Commission's willingness to support market-led initiatives where appropriate. Ensuring that best practice reflects the aims of the CMU will give confidence to investors and avoid unnecessary layers of regulation."
Other areas of the Action Plan welcomed by the AIC include:
Modernising the Prospectus Directive. The Commission's Action Plan indicates that its review of the Prospectus Directive will be comprehensive, an encouraging first step in achieving the aims of the CMU. The review has the potential to help reduce regulatory barriers to accessing capital investment.
Reducing barriers to cross-border distribution and investment. The Commission has advised that it will 'work with Member States to identify and dismantle' barriers to cross-border activity. This could increase the take up of investment companies by investors across the EU, although addressing cultural differences may take some time in practice.