The European Securities and Markets Authority (“ESMA”), the International Swaps and Derivatives Association (“ISDA”) and FIA Europe have published their responses to the European Commission’s Green Paper on Building a Capital Markets Union (“CMU”).

Whilst supporting the aim of building deeper and more integrated capital markets across all of the EU, ESMA’s response stressed how its main objectives of enhancing investor protection and promoting stable and orderly financial markets can contribute to the CMU. The response contains specific proposals for improved access to credit information for SMEs and increasing cross-border retail participation in investment funds such as UCITS. ISDA and FIA Europe’s joint response highlights the crucial role derivatives play in capital markets and those derivative reforms in Europe governing clearing, margining and trading activities should be calibrated to a standard that also facilitates the efficient functioning of derivatives markets, without damaging liquidity.