Sat. Aug 13th, 2022

Brussels, 7 July 2022

The Commission has today published two reports on the Capital Markets Union (CMU): one on improving the quality of financial advice and another on directing SMEs to alternative funding providers. These reports are part and parcel of the Commission’s 2020 CMU Action Plan and are based on external consultations with stakeholders.

The first assessment has examined an important issue for retail investment in the EU, notable possible improvements to the quality of financial advice. It specifically looked into the feasibility of setting up a pan-EU label for financial advisors. The assessment concludes that, despite some requirements introduced at EU level, the level of qualifications of financial advisors largely continues to differ across Member States. Nevertheless, the report does not recommend a pan-EU label as its successful uptake is not guaranteed, while administrative costs linked to its set-up and running are likely to be high. The report proposes that the future Retail Investment Strategy looks into alternative possibilities to strengthen EU rules for advisors.

The second assessment examined how to direct small and medium-sized enterprises (SMEs) to alternative funding providers. It considered a possible EU-wide SME referral scheme, where banks declining credit to an SME would be required to re-direct it to providers of alternative funding. The assessment concludes that a potential referral scheme, building on the European Single Access Point (ESAP) proposal currently under negotiation, would be the most promising avenue. The Commission will wait for the outcome of the ESAP negotiations before considering next steps. The aim of the CMU is to get money – investments and savings – flowing across the EU so that it can benefit consumers, investors and companies, regardless of where they are located.

For more details on the two assessments, see Actions 5 and 8 of the CMU Action Plan here: Capital markets union 2020 action plan: A capital markets union for people and businesses | European Commission (europa.eu).