The European Commission today unveiled a new Capital Markets Union (CMU) “action plan”, with better pensions adequacy monitoring and “seamless” investor access to financial and sustainability-related company data among the targets of a range of measures the Commission has said it will take.

The Commission said dismantling remaining barriers to a genuine single market for capital was not a goal in itself but essential to achieving overarching policy objectives.

“The coronavirus crisis has injected real urgency into our work to create a Capital Markets Union,” said Valdis Dombrovskis, an executive vice-president at the Commission.

“The strength of our economic recovery will depend crucially on how well our capital markets function and whether people and businesses can access the investment opportunities and market financing they need. We need to generate massive investments to make the EU economy more sustainable, digital, inclusive and resilient.”

The action plan proposed 16 measures, some legislative and some not and some already proposed in July. In its press release, the Commission drew attention to six of them:

  • Establishing an EU-wide platform (European Single Access Point) to provide investors “with seamless access to financial and sustainability-related company information”;
  • Supporting insurers and banks to invest more in EU businesses;
  • Strengthening investment protection to support more cross-border investment in the EU;
  • Facilitating monitoring of pension adequacy across Europe;
  • Making insolvency rules more harmonised or convergent; and
  • Pushing for progress in supervisory convergence and consistent application of the single rulebook for financial markets in the EU.

In pledging to create a single access point on company data, including sustainability-related information, the Commission looks like it is responding to a key ask of investors that has come to the fore in the context of the implementation of the Commission’s sustainable finance action plan.

“The Commission will tackle the lack of accessible and comparable company data for investors”

The European Commission

The Commission considers the data platform as one of several measures “to support a green, digital, inclusive and resilient economic recovery by making finance more accessible to companies”.

“The Commission will tackle the lack of accessible and comparable company data for investors,” it said, adding that fragmented access to scattered company information contributed to dissuading cross-border and global investment and in particular put smaller national capital markets at a disadvantage.

It said the information to be covered under the platform “should reflect the needs of investors and the interests of a broader range of users”.

“Therefore,” it added, “this should also improve the availability and accessibility of sustainability-related data, steer more investments towards sustainable activities and contribute to meeting the objectives of the European Green Deal.”

Pension matters

On pensions, the Commission said it would facilitate the monitoring of pension adequacy in member states through the development of pension dashboards, and develop best practices for the set-up of national tracking systems for individual Europeans.

It also said it would launch a study to analyse auto-enrolment practices and may analyse other practices to stimulate participation in workplace pension schemes, although it has already got the ball rolling on the auto-enrolment study.

“People should be encouraged to supplement public pensions with life-long saving and investment, including through more active participation in occupational pension schemes,” the Commission said.

“This will enable them to benefit from more adequate retirement income and make it possible to finance the long-term growth of the real economy, as well as its green and digital transition.”

“Auto-enrolment has been very successful in certain jurisdictions, but it’s good to consider other approaches to, like collective agreements”

Matti Leppälä, general secretary of PensionsEurope

Matti Leppälä, general secretary of PensionsEurope, said the pension action items seemed to show the Commission taking less of a regulatory and more of a best practices-focussed approach to pensions, and that he welcomed this.

He also welcomed the prospect of the Commission studying other practices besides auto-enrolment to boost occupational pensions coverage.

“Auto-enrolment has been very successful in certain jurisdictions, but it’s good to consider other approaches too, like collective agreements,” he said.

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