By Toby Fildes
17 Dec 2020
The shock of coronavirus has changed markets and society forever. Toby Fildes picks out the key themes that will emerge from that upheaval in 2021. As 2020 has reminded everyone, the unexpected will happen but markets can cope.
At the end of every year there is always an urge to look back at the highlights and look forward to the opportunities a new year brings. Only this year, most will want to forget 2020.
The coronavirus has upended life as we know it. It’s been exhausting, stressful, difficult the most challenging year of our professional and perhaps personal lives. The preference to look forward is therefore greater than ever market participants are united in their hope for better, more normal days ahead.
By Jasper Cox
17 Dec 2020
In tumultuous times, the EU’s Capital Markets Union project continues to plod on. As it it is limited by member states not harmonising certain laws, this is not all the European Commission’s fault, but that hasn’t stopped criticism that the executive body has underdelivered. Jasper Cox reports.
The year 2020 may be looked back on as a transformational one for fiscal co-operation in the EU, with countries going further than would have seemed possible before the coronavirus crisis to pool resources and fund the recovery. Beyond rhetoric, there was no such breakthrough in the Capital Markets Union project, however.
Surveys and Reports
Regulatory Developments
United Kingdom: HM Treasury consultation on new special administration regime for payment institutions and electronic money institutions
On 3 December 2020 HM Treasury (HMT) issued a consultation on proposed insolvency changes for payment institutions (PIs) and electronic money institutions (EMIs), including a bespoke special administration regime (SAR). HMT notes the shortcomings of the current insolvency regime and is making these proposals ahead of the conclusion of the Payments Landscape Review to protect consumers in the event of the insolvency of PIs and EMIs.
The proposed SAR is intended to have the following key features:
An explicit objective on the special administrator to return customer funds as soon as reasonably practicable.
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BETTER FINANCE: Ensure A Level Playing Field For ELTIFs To Take Off Date
16/12/2020
With merely 22 active funds, of which just a handful are marketed and distributed to individual, non-professional (“retail”) investors, the EU Long-Term Investment Funds (ELTIF) market is still struggling to develop more than five years after the adoption of its Regulation.[1] The uptake of ELTIFs by investors is hampered by similar but more attractive domestic labels, a lack of public promotion, a shortage of “affluent” investors and more stringent investment rules compared to other funds of the same type.
A research and policy report by BETTER FINANCE into the underdeveloped EU market for long-term investment funds set out to identify what deterred investors from pooling capital into this safe, long-term investment vehicle. The report gathers views from BETTER FINANCE’s members and evidence from desk research on what hampered the development of the ELTIF market and what can be