On 24 July the European Commission adopted a Capital Markets Recovery Package as part of the Commission's overall coronavirus recovery strategy. The Package proposes targeted changes which will encourage greater investment in the economy, allow for rapid re-capitalization of companies and increase banks' capacity to finance the recovery. The Package includes the following proposals:
- Prospectus Regulation: introduction of a temporary short form 'EU Recovery Prospectus.' This easily digestible prospectus (a maximum of 30 pages) would enable companies with a track record in the public market to quickly raise capital.
- Securitisation Regulation & Capital Requirements Regulation: extension of the STS framework to on-balance sheet synthetic securitisation and removal of regulatory restraints to the securitisation of non-performing exposures.
- MiFID II: amendments to lessen administratively burdensome communication requirements (particularly with respect to professional clients) and changes to derivatives rules where underlying value is a commodity.
It is now for the European Parliament and the Council to approve the Package. After the Package is adopted and has entered into force, the changes to the Prospectus Regulation and Securitisation Framework will apply directly in Member States. The MiFID II amendments will need to be transposed by national law.
The package contains targeted adjustments to the Prospectus Regulation, MiFID II and securitisation rules. All of the amendments are at the heart of the Capital Markets Union project aimed at better integrating national capital markets and ensuring equal access to investments and funding opportunities across the EU.