The European Commission’s savings and investments union (SIU) strategy,  on 19 March 2025, outlined a comprehensive framework for developing deeper and more integrated capital markets within the European Union. The commission stressed that achieving the strategy’s goals would enhance citizens’ financial wellbeing, support the financing needs of EU companies and boost their competitiveness. This, in turn, would position the EU to tackle challenges such as the green and digital transitions, demographic shifts and defence investments, while safeguarding its strategic autonomy.

Vincent Ingham, director of regulatory policy at the European Fund and Asset Management Association (Efama), in a on the same evening, noted that the strategy’s strength lay in its targeted approach, setting it apart from previous capital markets union action plans. He emphasised two key priorities: the development of supplementary pensions and the need to increase retail participation in capital markets. Efama had long advocated for these measures and the strategy reinforced the shared responsibility of member states in achieving these objectives.

Tanguy van de Werve, Efama’s director general, stated that the commission had correctly identified pension asset growth as a key priority. He stressed that this focus was critical for addressing the widening pension gap and improving access to finance, particularly for companies dependent on private markets. The commission also underscored the importance of tax incentives in encouraging savings and investments. However, van de Werve expressed concerns over the ongoing deadlock regarding the debt-equity bias reduction allowance (Debra), warning that this impasse undermined confidence and needed urgent resolution.

Retail participation in capital markets

The commission acknowledged that financial literacy played a crucial role in fostering a retail investment culture in the EU. It committed to adopting a financial literacy strategy in 2025 to improve citizens’ understanding of investment opportunities. Additionally, it emphasised the importance of tax incentives as a key driver of long-term retail savings and investments.

To encourage retail participation, the commission urged member states to establish investment savings accounts (ISAs). These accounts should be easy to use, incorporate digital interfaces and provide access to a broad range of products, particularly investment funds. They should also offer preferential tax rates and simplified tax processes to make them more attractive to investors.

Efama argued that the investment process should be substantially simplified. It stated that complex onboarding procedures and excessive disclosures discouraged investors and that the current Retail Investment Strategy exacerbated these issues by introducing additional regulatory burdens and focusing excessively on costs. Efama urged co-legislators to simplify the strategy to make investing more accessible.

Promoting retirement savings

The commission proposed measures to encourage the development of supplementary pensions at the national level. It called on member states to implement pension-tracking systems to provide visibility on future pension payouts and to introduce auto-enrolment in occupational pension schemes. Efama viewed auto-enrolment as the most effective method of increasing retail investment scale, deepening capital markets and addressing pension challenges.

The commission also announced plans to review the pan-European personal pension product (Pepp) regulation to address its shortcomings. Additionally, it intended to assess the institutions for occupational retirement provision (IORP) directive to improve the ability of pension funds to channel household savings into productive and innovative investments.

Investments and financing

The strategy included measures to promote equity investments by institutional investors. The commission proposed more favourable prudential treatment for long-term equity investments and reiterated the need to remove the debt-equity bias in tax systems through Debra.

Cross-border investment barriers remained a challenge, and the commission aimed to address this by facilitating withholding tax reclaims through the Faster initiative. Additionally, it proposed revitalising securitisation markets in Europe by reviewing due-diligence requirements.

Integration and market scale

The commission committed to tackling obstacles that prevented EU trading and post-trading infrastructures from benefiting from a frictionless single market. It pledged to remove remaining barriers, including gold-plating, to the cross-border distribution of EU-authorised funds.

While acknowledging the benefits of greater market integration, Efama cautioned against prioritising market scale through mergers. It argued that the primary objective should be to maintain competitive market dynamics while eliminating national barriers and promoting interoperability. Efama also emphasised the need to address regulatory barriers and rent-seeking behaviours in infrastructure services, which contributed to market fragmentation and higher costs for investors.

Efficient and harmonised supervision

The strategy called on European supervisory authorities (ESAs) and national competent authorities (NCAs) to make full use of their existing powers to strengthen supervisory convergence. Efama supported this initiative and welcomed efforts to improve the exchange of supervisory data among regulatory bodies.

However, Efama opposed granting the European Securities and Markets Authority (Esma) direct supervisory powers over large asset managers. It argued that such a move would not increase retail participation in capital markets and would instead reduce agility, delay time to market and limit adaptability for national regulators. Efama warned that this politically divisive issue could divert attention from more impactful actions.

The SIU strategy set out an ambitious roadmap for improving capital markets in the EU, Efama said. However, its success would depend on the commitment of member states to implement key reforms, particularly in the areas of tax incentives, pension savings and cross-border investment.