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Steven Maijoor, ESMA Chair, delivered a speech to the NAPF Investment Conference in Edinburgh.
“What is needed to achieve a strong and integrated EU capital market to increase capital availability and support economic growth? With a five year time-horizon in mind, choices will need to be made. In my view there are four main building blocks of a Capital Market Union which are all interlinked and on all of which we need to progress:
Let me go back to the topic of CMU and increasing the efficiency of capital markets. Despite good progress, there are still many areas where differences in rules hamper the development of an integrated EU capital market. One such area is SMEs. Capital market instruments like equity and bonds have remained a costly tool for smaller companies. This is the result of many factors such as the limited availability of credit information, different insolvency rules across EU Member States, and different disclosure requirements, including accounting standards.
We cannot remove all barriers for SMEs. We need to focus on those areas where we can expect the biggest impact. For example, the introduction of IFRS has had a very positive impact on companies listed on regulated markets. With that in mind we should consider moving to a common accounting language for SMEs that would like to grow and get a broader investor base. That language should be based on IFRS but not as extensive as the standard set of IFRS.”