EU seeks to compete with London with Capital Markets Union

The European Commission is working on the next phase in creating a capital markets union (CMU) to help companies raise more funds by issuing stocks and bonds as the economy recovers from COVID-19, Reuters reports.

A “consolidated tape” that knits together upwards of 20 trading platforms across Europe is a longstanding ambition to replicate the efficiencies of the U.S. stock market.

It would give investors a snapshot of prices at which each stock is traded. Some stocks are traded on multiple platforms, making it harder to see if investors are getting the best deal.

“The Commission will propose the necessary legislative changes to support the establishment of an effective and comprehensive post-trade consolidated tape for equity and equity-like financial instruments by Q4 2021,” the European Commission briefing document seen by Reuters said.

The need to bolster the capital market has been made more urgent by the departure of Britain, Europe’s biggest financial centre, from the EU.

The “vast majority of member states” are still “strongly opposed” to centralising more supervisory powers in the bloc, the document said.

“We could emphasise the need to develop a single rule book that would seek the alignment of rules and limit national supervisory discretion in the post-Brexit and multi-entry EU,” the document said.

The European Commission is expected to set out its proposals to bolster CMU on September 23rd.

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