EU Savings and Investments Union – Commission publishes its strategy

On 19 March 2025, the European Commission published a Communication, setting out its strategy for the Savings and Investments Union (SIU).

The Communication was accompanied by a Factsheet, a webpage, a set of Q&As and a press release.

What is the SIU?

The SIU is a broad set of EU-wide initiatives, which are intended to both

• foster the development of capital and banking markets and

• improve links between savings and investments to enable EU companies to meet their capital needs and to increase returns for EU citizens on their long-term savings.

It builds on initiatives already undertaken relating to the CMU and the Banking Union (BU).

The Commission's considers that the EU increasingly needs significant amounts of capital to finance its broader policy goals. As a result, there is also a need to build and deepen capital markets, particularly as a source of risk capital.

In the view of the Commission, completing the SIU is critical to achieving strategic priorities around security and defence, sustainable prosperity and economic competitiveness. 

The Commission will publish a mid-term review of the SIU by Q2 2027, giving a state of play on overall progress and reflecting input received from stakeholders on the initial proposals.

What does the Communication contain?

In its Communication, the Commission sets out details of a range of policy measures, affecting various dimensions of the EU's financial system, grouped under the four - sometimes overlapping -  categories examined below.

(The Communication also contains sections on Competitiveness and Integration of the Banking Sector and Outreach and Engagement, neither of which are considered in this note.)

A. Citizens and savings

The Commission's key proposals are that:

• retail savers they must be encouraged and incentivised to hold more of their savings in capital-market instruments

• experience shows the potential for savings and investments accounts to boost retail participation in capital markets, especially where accounts are matched with appropriate incentives

• retail investors must be treated fairly and offered adequate choice when accessing investment products

• financial literacy levels must be raised in order to develop a retail investment culture within the EU

• retail investors should be given opportunities to support strategic projects by co-investing alongside public entities.

To achieve these policy aims, the Commission intends to

• adopt measures by Q3 2025 to create a European blueprint for savings and investments accounts or products based on existing best practice, accompanied by a recommendation on the tax treatment of savings and investments accounts

• facilitate agreement between the European Parliament and Council on the Retail Investment Strategy. That said, the Commission "will not hesitate to withdraw the proposal if the negotiations fail to meet the intended objectives of the Strategy".

• adopt, by Q3 2025 a financial literacy strategy to raise awareness and increase participation in capital markets and create a more "investment savvy" culture.

B. Investments and financing

The Commission's proposals include reforms to the bank and insurance prudential framework to stimulate equity investments by institutional investors and an upgrade of the European Venture Capital Funds (EuVECA) Regulation to make the EuVECA label more attractive

In addition, the Communication notes that

• the EU needs a larger pool of capital to support investments in the European economy and lower financing costs for European businesses

• institutional investors play an essential role in the EU's financial system but tend to be less active in markets for equity and venture capital, private equity and infrastructure

• the rules applying to venture and growth capital funds must be flexible and proportionate, at both EU and national level

• successful EU and national programmes supporting the development of venture and growth capital should be further developed

• one major reason often cited by investors for the underdevelopment of venture and growth capital funds in the EU is the lack of suitable exit options

• differences in national taxation procedures can create administrative burden and barriers to cross-border investment

• securitisation can boost investment by allowing banks to transfer risks to those that are able to bear them and so free up their capital for additional lending to households and businesses, including SMEs.

To achieve these policy aims, the Commission intends to

• take measures by Q4 2025 to stimulate equity investments by institutional investors and insurers, by specifying in the Solvency II delegated act the eligibility criteria for the favourable prudential treatment of long-term investments in equity and by giving guidance on the use of the favourable prudential treatment for investments under legislative programmes

• by Q3 2026, review and upgrade the EuVECA Regulation to make this label more attractive, including by widening the scope of investable assets and strategies

• take action to remove differences in national taxation procedures creating administrative burden and barriers to cross-border investment and also support Member States' actions for this purpose

• ensure that EU listing rules are simple and that burdens are minimised, to increase liquidity and the supply of capital to listed companies in order to make EU public markets more attractive

• put forward, by Q3 2026, measures to support exits by investors in private companies, possibly through multilateral intermittent trading of private company shares.

• make proposals in Q2 2025 on securitisation, focusing on simplifying due diligence and transparency, and adjusting prudential requirements for banks and insurers.

C. Integration and scale

The Commission's proposals in this area include reforms to address barriers to more integrated trading and post-trading infrastructures and measures to remove barriers to the distribution of EU-authorised funds

The Commission notes that

• fragmentation in EU capital markets, be it regulatory, supervisory or political, needs to be removed to allow for market-driven consolidation

• although there has been some progress in reducing them, barriers still prevent the EU trading and post-trading infrastructures from exploiting the benefits of a truly frictionless single market.

Looking at the further development of the asset management sector, the Communication states that

• even though the EU's investment sector is prudentially sound and strong, much remains to be done

• the core issue is fragmentation and unnecessary regulatory burdens - asset managers operating as a group structure across multiple Member States are subject to unnecessary barriers and costs because they have to allocate similar resources to each of their entities and are subject to multiple rules. This results in an unnecessary duplication of burdens and a drag on their competitiveness and agility

• while the current regulatory framework provides a passport allowing EU-authorised funds to be freely distributed across the EU, such funds do not always enjoy the full benefits in practice

• national barriers, divergent practices and gold-plating, increase costs for the EU funds market and hinder their time to market compared to other jurisdictions. This leads to EU citizens seeing reduced investment opportunities and increased fees.

To achieve these policy aims, the Commission intends to

• set up, in Q2 2025, a dedicated channel for all market participants to report on encountered barriers within the single market and to step up enforcement action to accelerate their removal.

• put forward, in Q4 2025, legislative proposals to further remove barriers to cross-border activity, modernise the legislative framework to recognise new technologies and financial developments and to ensure better quality of execution and price formation on EU trading venues

• propose legislation, in Q4 2025, to remove remaining barriers to the distribution of EU-authorised funds across the EU as well as measures to reduce operational barriers affecting cross border groups with a view to simplifying operations of asset managers

• assess, by Q4 2026, the need for, and consider a potential review of, the Shareholders Rights Directive to make it easier for investors, intermediaries and issuers to operate across Member States.

D.   Efficient supervision in the single market

One objective of the SIU is harmonised supervision where all financial market operators receive the same supervisory treatment irrespective of their location across the Union.

The Commission proposes measures to strengthen supervisory convergence tools and to achieve more unified supervision of capital markets.

As there are limits to the use of convergence tools and circumstances where transfer of direct supervision at EU level is, in the opinion of the Commission, already appropriate, these measures may include transferring certain tasks from National Competent Authorities to the EU level.

To achieve these policy aims, the Commission intends to

• call on the European Supervisory Authorities and NCAs to "make full use of currently available tools and implement the simplification agenda as outlined in the Simplification Communication"

• propose, in Q4 2025, measures to strengthen supervisory convergence tools, and make them more effective

• make proposals - again, in Q4 2025 - to achieve more unified supervision of capital markets, including by transferring certain tasks to the EU level.