MFA Recommends Enhancements to EU Capital Markets

MFA provided the European Commission (EC) with five key policies to enhance European Union (EU) capital markets for investors, businesses, and savers in a letter. Strengthening EU capital markets and the role of alternative asset managers will contribute to the bloc’s economic growth and competitiveness objectives.

“The EU can foster stronger capital markets by embracing alternative asset managers, which will drive economic growth, support long-term investment, and benefit all Europeans,” said Bryan Corbett, MFA President and CEO. “These five policies recommended by MFA will enhance economic competitiveness, address the fragmentation of EU capital markets, and build a stronger European Savings and Investments Union. This will help the EU reach its economic growth objectives.”

The five MFA policy recommendations to enhance the attractiveness and efficiency of the EU capital markets include:

1. Developing Europe’s role in a global asset management industry – Ensuring EU institutional investors, including pension funds and charitable foundations, have access to alternative asset managers around the world will enable them to have a diversified and globally balanced portfolio.

2. Re-opening Europe’s securitisation market prudently – Reviving securitisation markets in Europe will unlock financing for European businesses and greater diversification options for investors.

3. Targeted recalibration the short selling rules – Adjusting the regulatory framework for short selling will foster more dynamic European markets and improve the investor experience.

4. Enhanced transparency to deliver more efficient markets – Implementing well-functioning consolidated tapes for various asset classes, making the pricing of market data more transparent, and establishing a framework that supports cross-border trading will increase capital flows in the EU.

5. Safeguard the contribution of alternative asset managers – Applying a one-size-fits-all, bank-like regulatory framework on the nonbank financial intermediation (NBFI) ecosystem ignores the diversity of the sector and hinders Europe’s access to this growing source of capital. Alternative asset managers are well-regulated and do not in themselves present financial stability risk.

Read the full letter here.

Source: MFA