On 19 March, the European Commission (EC) published its strategy for the Savings and Investments Union (SIU), which outlined the EC’s priorities around capital markets and competitiveness. 

The EC stated that completing the SIU is critical to achieve strategic priorities around security and defence, sustainable prosperity and economic competitiveness.  The key policy priorities outlined by the EC in this SIU strategy included:

• Further developing the asset management sector, including addressing fragmentation and unnecessary and duplicative regulatory burdens.  The EC added that:
  • The EU’s investment fund sector is prudentially sound and strong;
  • National barriers, divergent practices and gold-plating, increase costs for the EU funds market and hinder their time to market;
  • It will set up in Q2 2025 a channel for market participants to report national barriers within the single market, and in Q4 2025 it will propose legislation to remove the remaining barriers both at the EU and national levels to the distribution of EU-authorised funds across the EU single market.

• Harmonising supervision, emphasising convergence of national practices and not necessarily seeking a single supervisor.  The EC will:
  • In Q4 2025, introduce measures to strengthen supervisory convergence tools and make them more effective, as well as publish proposals to achieve more unified supervision of capital markets, including by transferring certain tasks to the EU level.

• Encouraging retail participation in capital markets, highlighting the need to improve financial literacy.  The EC also emphasised that:
  • the access to savings and investments accounts across the EU must be improved.  Measures will be adopted by Q3 2025;
  • the Retail Investment Strategy (RIS) should avoid further fragmentation and regulatory burden.  The EC will not hesitate to withdraw the RIS if it fails to meet the stated objectives;

• Securitisation, highlighting the need to simplify the framework. The EC added that:
  • industry-led and member state initiatives, including the creation of platforms, can enhance standardisation and strengthen the securitisation ecosystem;
  • the European Investment Bank could contribute to the development of the EU securitisation market; 
  • in Q2 2025 it will make proposals on securitisation focusing on simplifying due diligence and transparency, and adjusting prudential requirements for banks and insurers

• Developing the Supplementary Pensions Sector, including a revision by Q4 2025 of the existing frameworks for Institutions for Occupational Retirement Provision (IORPs) and the Pan-European Personal Pension Product (PEPP).

• Promoting investments in ‘certain’ alternative asset classes, focusing only on venture capital, private equity and infrastructure.  The EC adds that:
  • there should be no undue regulatory barriers for such institutional investors; 
  • the prudential treatment of exposures to patient capital should be clarified.

• Facilitating investment exits and secondary private capital markets.

• Reducing administrative barriers and differences in national taxation that undermine cross-border investments.

The EC will publish a SIU mid-term review by Q2 2027. This will give a state of play on overall progress and reflect input received.

For further information please contact Guillermo Perez Molina ([email protected]).