“Given the crucial role played by scaling-up SMEs in creating growth and jobs, it is essential to ensure that all the right incentives are in place for these companies to grow. After key proposals targeted at SMEs, including on crowdfunding and venture capital finance, we now further ease SMEs’ access to public markets.”

Jyrki Katainen
Jyrki KatainenVice-President responsible for Jobs, Growth, Investment and Competitiveness

 “Today, Europe’s capital markets are fragmented, and in some cases not very developed. For example, in 2015, the size of stock markets to GDP in Europe was only about 1/3 of that in the US. This illustrates the potential for European companies to make more use of public markets.”
Keynote speech for ESMA Conference 2017

Valdis Dombrovskis
Valdis DombrovskisVice-President for the Euro and Social Dialogue, Financial Stability, Financial Services and Capital Markets Union

“We should stimulate covered bond markets as a stable and cheap source of funding for credit institutions. In return, banks should be able to better finance the real economy.”

Valdis Dombrovskis
Valdis DombrovskisVice-President for the Euro and Social Dialogue, Financial Stability, Financial Services and Capital Markets Union

The primary market is the part of the capital market that focuses on the issuing of new securities and on long-term capital formation. Companies, governments or public sector institutions can issue bonds on financial markets to rasie capital. This is a traditional source of financing for non-financial companies.

Companies can also raise capital by offering their stock to the public for the first time in an initial public offering (IPO). Banks play a key role in advising companies on their IPOs and providing underwriting services, by acting as a broker between the issuing company and the investing community to help the issuing company sell its initial allocation of shares.

Once the initial sale of stock is completed on the primary market, further trading of this stock takes place on the secondary market.

Making it easier for companies to enter and raise capital on public markets is a key element of the European Commission’s Capital Markets Union (CMU) project. Integrated, efficient and resilient corporate bond markets are seen as a vital and core pillar of a successful CMU. Accordingly, the Commission has undertaken several initiatives as part of this drive, including revision of the Prospectus Directive, a review of the regulatory barriers to SME admission on public markets and SME growth markets, and undertaking a review of EU corporate bond markets, focusing on market liquidity.

The PMWG is responsible for all topics related to Primary securities markets and securities listing. Its aim is to assist its members to coordinate views on relevant legislation and to achieve a better environment for listing for financial market participants through best practice and regulation.

The work of the Primary Markets WG is currently being reoriented under a new Chairman.

Useful links, resources & contacts
EBF POSITIONS
EBF Adviser
Simon Pettinger

Simon Pettinger

Policy Adviser - Financing Growth

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