Nasdaq OMX: Cap Markets Union needs disruptive technology
A whitepaper by market operator Nasdaq OMX has warned that disruptive technology needs to be encouraged if Europe’s proposed Capital Markets Union (CMU) is to prove effective.
The paper notes that the current proposals place an emphasis on larger institutions investing and growing their product and service offerings, which the firm argues do not necessarily improve the capital markets themselves.
“Instead, the Action Plan should focus on increasing transparency, making the capital markets more accessible to smaller businesses, incentivising long-term private investment in listed equities, encouraging the development and use of disruptive technology and ultimately creating jobs,” the paper notes.
With a long-term plan to strengthen Europe’s economy by moving funding away from bank loans and toward the capital markets, the European Commission ought to be encouraging smaller firms to list and increasing the capacity of those businesses to access capital by new and innovative means, argues the market operator.
It also cites the capacity of the public to support crowdfunding – even without any prospect of a return – as evidence that Europeans are ready to support investments.
“More needs to be done to inspire confidence and enhance trust in the financial markets, and importantly whet investors’ appetite for growth companies,” the market operator writes. “Immediate action should be centred on incentivising an equity-based culture, leveraging technology to remove barriers, reducing entry costs and reconciling laws and regulations that conflict with CMU objectives.”
Reported by Dan Barnes