In late January the European Commission began a mid-term review of its CMU action plan. The aim was to take stock of legislative initiatives undertaken since 2015 and gather feedback from stakeholders on positive aspects and possible improvements to the plan.

AMAFI, which had taken part in the previous CMU consultations (cf. AMAFI / 15-28), was keen to provide further input to the discussions, particularly now that they are taking place against the remarkable backdrop of the UK’s forthcoming departure from the European Union (EU). With this in mind, AMAFI put forward some general observations (AMAFI / 17-24):

• In-depth discussions are needed on Brexit's consequences for the EU-27 financial system. Any talks must now be organised around the fact that Europe’s main financial centre will soon be outside the Union. Accordingly, it seems reasonable to take the time to properly measure the challenges and consider potential solutions.
• The EU-27 must have the means to ensure its financial autonomy and security. This will entail looking closely at a number of questions, including the location of central counterparties and market platforms, and access to the data needed to follow and understand market developments.
• Where necessary, effective convergence of national supervisory practices should be ensured. Targeted strengthening of ESMA’s role and powers could help with this.
• Europe must adopt a policy for the treatment of third countries and the equivalence framework.
• Now, more than ever, top priority must be given to capital and hence to equity markets, which are alone in providing risk finance for business development.
• Finally, steps must be taken to apply the proportionality principle effectively and improve implementation of key legislation with a major bearing on the establishment of CMU.