The capital markets union (CMU) project was a top priority for the von der Leyen Commission, which in 2019 set up an expert group, the High-Level Forum (HLF) on the CMU. Deutsche Börse Group was part of this expert group. The Forum developed 17 specific sets of action that are considered as “game changers” in achieving fully functioning and integrated capital market, with an overall focus on re-equitisation. Reflecting the need to develop deep, liquid, and globally competitive European capital markets that would allow Europe to finance its policy goals, in 2024 the Eurogroup agreed upon a roadmap on the future of European capital markets. Key measures highlighted in the roadmap are, amongst others, reduction of the regulatory burden, convergence of national corporate insolvency frameworks, harmonisation of listing requirements, better integrated market infrastructures, and supervisory convergence.

Creating a fully integrated capital markets will feature high on the agenda for the next European legislative term (2024-29). In April 2024, the Letta Report on the future of the Single Market was presented to the EU leaders at the EU summit. It created a strong momentum for CMU through harmonised national insolvency frameworks and corporate tax law, relaunching the European securitisation market” and attracting long-term investment or saving products for pension funds. Deutsche Börse Group contributed to Letta’s Report through direct consultations and contributions in several industry associations and continues to actively promote the CMU agenda through thought leadership and innovation.

Deutsche Börse Group genuinely supports actions and ideas aiming at creating an efficient and high-quality European ecosystem that fosters sustainable economic growth. The need to progress with creating truly unified capital markets  has become particularly urgent with the departure of the UK, Europe’s largest financial center, and exacerbated financing needs for digital and green transitions, especially in the wake of the COVID-19 pandemic Moreover, there is an increased importance of fostering globally competitive European structures in the light of shifting global balances capable of attracting third-country market participants and supporting domestic market participants in meeting their needs.

To this end, we welcome an increased focus on re-equitisation and recommendations in regard to the functioning of primary markets, for example on alleviations of listing requirements in order to make public equity financing a more attractive option for smaller companies. It will be essential to increase access to capital markets by removing remaining barriers that further hinder market integration, e.g., fiscal disincentives to equity financing (withholding tax, insolvency procedures). Moreover, it will be necessary to put the right incentives into place, e.g., creating a private public fund for IPOs as proposed by the European Commission as well as promoting the availability of SME research.

However, well-functioning secondary financial markets (for trading) are just as important as primary markets (for issuing) and constitute a necessary prerequisite to the successful development of the CMU. The robust and transparent price formation processes of exchanges are key to attract liquidity and ensure that shares raised on primary markets can continue to be traded and attract investors in the first place. Therefore, DBG strongly believes that measures for a simplified market structure aligning requirements across trading venues and a well-calibrated transparency regime under MiFID II/MiFIR will be an integral part of completing the CMU to fully support efficient, liquid, and resilient capital markets.

For further information on Deutsche Börse Group’s positioning on the matter, find our statements and position papers under Publications.