Today’s communication of the European Commission, “Savings and Investments Union – a Strategy to Foster Citizens Wealth and Economic Competitiveness in the EU” is a major step towards finally developing deeper, more integrated capital markets that the European Union absolutely needs. Achieving the goals of the SIU will help improve citizens’ financial well-being, meet the financing needs of EU companies and improve their competitiveness. As a result, the EU will be in a stronger position to address the challenges it faces (green, digital, demographic transitions and defence investments) and preserve its strategic autonomy in an increasingly uncertain world. 

The Savings and Investments Union Strategy presented by the Commission is a powerful call for urgent action to all stakeholders involved, both at EU and national levels. It draws an ambitious - yet credible and specific - pathway to build efficient EU Capital Markets. It rightly prioritises mobilising retail savings more effectively, and underlines the need for EU authorities/policymakers to be guided by simplification, burden reduction and digitalisation.

Vincent Ingham, EFAMA Director of Regulatory Policy, commented: “What makes this Savings and Investments Union Strategy particularly promising is that it is more targeted than previous CMU Action Plans and laser-focused on the key drivers of success, chief of which are the development of supplementary pensions and the need to achieve greater retail participation in capital markets, as EFAMA advocated for many years. Critically, the Strategy also stresses the shared responsibility of Member States in delivering on these objectives.” 

Tanguy van de Werve, EFAMA Director General, commented: “The European Commission has rightly identified the growth of pension assets as a key priority. This focus is essential for addressing the increasing pension gap and improving access to finance, not least for companies that rely on private markets for funding. Additionally, the European Commission rightly emphasises the importance of tax incentives. The challenge now is how to motivate member states to offer these incentives. Unfortunately, the ongoing stalemate regarding DEBRA does not inspire confidence. This situation needs to change.”

More specifically, EFAMA sees the following elements of the Commission’s Communication as particularly important for a successful SIU Strategy:

1. Citizens and Savings 

Retail participation in capital markets 

• The acknowledgment that greater financial literacy is essential to develop a retail investment culture within the EU (and the commitment to adopt a Financial Literacy Strategy in 2025). 

• The focus on adequate tax incentives as a key driver of long-term retail savings and investments. 

• The encouragement for Member States to establish Investment Savings Accounts that are easy to use (with digital interfaces) and give access to a wide range of products (in particular investment funds), while offering preferential tax rates and simplified tax processes.

In addition, EFAMA also calls for a substantial simplification of the investors’ journey. Too many investors are discouraged from investing by lengthy onboarding processes and excessive disclosures which currently make investing overly complex. The Retail Investment Strategy, in its current form, does exactly the opposite by introducing new complexities, regulatory burdens, and an excessive focus on costs. Therefore, it needs to be drastically simplified by the co-legislators. 

Promoting retirement savings 

• The development of supplementary pensions at national level by encouraging Member States to develop pension-tracking systems (to create visibility on future pension payouts) and auto-enrolment in occupational pension schemes. This is the single most efficient way of achieving scale in retail investments and deeper capital markets while contributing to addressing the pensions time bomb. 

• The review of the Pan-European Personal Pension Product (PEPP) Regulation to address its shortcomings and the review of the IORP Directive to improve the capacity of pension funds to direct households’ savings into productive and innovative investment.

2. Investments and Financing 

• The promotion of equity investments by institutional investors through a more favorable prudential treatment of long-term equity investments and removing the Debt-Equity bias in tax systems (DEBRA). 

• The removal of remaining tax barriers to EU cross-border investments, e.g. by facilitating withholding tax reclaims (FASTER). 

• The proposal to revitalise Securitisation Markets in Europe by reviewing due-diligence requirements.

3. Integration and Scale 

• The objective of addressing barriers preventing trading and post-trading infrastructures in the EU from exploiting the benefits of a frictionless single market. 

• The commitment to remove remaining barriers (including gold-plating) to the cross-border distribution of EU-authorised funds across the EU.

While greater market integration may be beneficial, the creation of ‘market scale’ (e.g. through mergers) should not be an objective in itself. The ultimate objective should be to maintain competitive dynamics in our markets while eliminating national obstacles and promoting interoperability. 

It is also essential to tackle regulatory barriers and rent-seeking behaviors in infrastructure services that contribute to persistent market fragmentation and higher costs for all users.

4. Efficient and harmonised supervision 

• The call for ESA’s and NCA’s to make full use of their existing powers to strengthen supervisory convergence. 

While EFAMA strongly supports greater supervisory convergence and facilitating the exchange of supervisory data among supervisory and prudential regulators, we are not in favor of granting direct supervisory powers to ESMA over large asset managers. This would do nothing to increase retail participation in capital markets and would be detrimental in terms of time to market, agility and adaptability for national authorities. Given that this is a politically divisive issue, we also fear this may become an unwelcome distraction and divert resources from actions that can really make an impact. 

- ENDS -

Note to editors : 

Read our high-level position on SIU here and our policy priorities paper here. 

For further information, please contact: 

Hayley McEwen 

Head of Communication & Membership Development