Response to the Capital Markets Union Mid-Term Review

The Federation of European Securities Exchanges (FESE) welcomes the opportunity to contribute to the Capital Markets Union (CMU) Mid-Term Review, a key initiative to deepen and integrate Europe’s capital markets

In our response, we underscore the importance of addressing regulatory disparities that risk undermining the global competitiveness of EU capital markets. A central concern is the divergence in margin standards for exchange-traded derivatives between the EU and other jurisdictions, notably the United States. These inconsistencies risk driving market participants away from EU markets in favour of lower-cost jurisdictions, creating opportunities for regulatory arbitrage. We therefore urge the Commission to defer any increase in margin requirements under EMIR until meaningful progress is made toward international harmonization.

We communicate the need to support the long-term competitiveness of European exchanges. This includes measures to promote a diverse funding ecosystem accessible to companies of all sizes, to counter the decline of smaller market intermediaries such as brokers and analysts, and to lower listing barriers through reforms such as the Prospectus Regulation. In addition, we call for the removal of tax-based disincentives that currently favour debt over equity financing, and reiterates its opposition to the Financial Transaction Tax (FTT), which it views as detrimental to market liquidity and economic efficiency.