CFA Institute launches blueprint for EU’s 2024-2029 legislative period: A comprehensive roadmap to enhance capital markets, technology, business conduct, sustainability, and pension reform

CFA Institute, the global association of investment professionals, today announced the release of its "Blueprint for the 2024-2029 Legislative Period in the EU."

This timely report outlines a detailed action plan to address the challenges and opportunities facing the EU’s financial sector over the next five years, with a focus on building resilient capital markets, responsible fintech, high standards of business conduct, sustainable finance, and better functioning pension systems.

Josina Kamerling, Head, Regulatory Outreach, EMEA, at CFA Institute, commented: “Building on the success of our 2019 blueprint, we collaborated with CFA Societies across the EU and Switzerland to gather a diverse range of viewpoints on regulatory priorities, opportunities, and challenges from their local markets. Our EU and national blueprints serve as a guide for policymakers and industry professionals alike, urging a collaborative approach to address regulatory challenges and opportunities in capital markets, technology, business conduct, and sustainability. This comprehensive document seeks to align interests and create a resilient, innovative, and investor-centric future for the EU financial markets."

Reflecting both EU-wide and national perspectives, the Blueprint emphasizes the need for tailored, yet cohesive, solutions that encourage growth, innovation, and investor confidence across the region. Crucially, it calls for EU legislators to consider the diverse national concerns and market dynamics when designing policies at a pan-European level.

The Blueprint’s key recommendations are aimed at driving forward reforms across several vital areas:

Resiliency of Capital Markets

The report advocates for ambitious reforms across the banking, asset management, and insurance sectors to foster deeper integration and mobilize private capital effectively. The high costs of accessing public markets and fragmented market structures have stunted growth and complex disclosure rules pose barriers to new issuers. To enhance market participation, the Blueprint calls for simplified regulations, harmonized insolvency proceedings, and support for small and medium-sized enterprises (SMEs) through clearer definitions and targeted policies. Addressing these challenges will be critical to deepening capital markets and improving retail investor engagement.

Technology and Fintech Regulation

  AI is transforming finance, bringing both promise and risk. The report identifies the complexity and opacity of AI models, data privacy, and the shortage of skilled finance-technology professionals as significant challenges. It underscores the importance of balanced regulation, such as the EU's AI Act, to fuel innovation while ensuring ethical standards and transparency. The Blueprint highlights Spain’s AI Sandbox as an example of responsible AI experimentation, advocating for similar approaches across the EU to enhance risk management, analytics, and investor protection. The ethical debate around AI is also addressed in the previously published CFA Institute report - Ethics and Artificial Intelligence in Investment Management: A Framework for Professionals

Business Conduct and Investor Protection

 With the EU facing low levels of financial literacy and inconsistent standards of advice, a need exists for harmonized certification for financial advisors and a unified approach to classifying professional investors. The Blueprint suggests mandatory certification requirements and greater investor education at both academic and professional levels to improve overall financial competency. These reforms are necessary to ensure consistent standards, protect investors, and facilitate cross-border financial services.

Sustainability and ESG Integration

  Sustainability is a key focus, with significant challenges around ESG data reliability, regulatory complexity, and the need for ethical technology use in investment management. The Sustainable Finance Disclosure Regulation (SFDR) has led to confusion, highlighting the necessity for clearer language and simplified requirements. The Blueprint advocates for improved ESG integration through transparent corporate sustainability reporting and better alignment with governance practices. It also calls for protecting minority shareholder rights amidst legislative proposals that could undermine principles like “one-share-one-vote.”

Pensions and Private Investment

The slow uptake of the Pan-European Personal Pension Product (PEPP) reveals the challenges of complex regulations, diverse tax treatments, and limited incentives. To encourage broader adoption, the Blueprint emphasizes harmonizing tax regimes, simplifying the product structure, and doing more to explain the benefits of PEPPs to investors. Pension reforms should focus on sustainable systems that encourage private savings, gender equity, and alignment of retirement ages with life expectancy to ensure long-term viability.

The Blueprint highlights the importance of creating balanced, transparent regulations that encourage innovation without compromising investor protection. Collaboration among policymakers, industry leaders, and educators is deemed essential to drive the reforms that will make the EU’s financial sector more robust, transparent, and prepared for the future.

The document’s detailed analysis of individual EU and national perspectives offers a pathway for collaboration between policymakers, financial professionals, and investors to work towards a transparent, resilient, and inclusive financial market environment.

For more information and to access the full report, please visit CFA Institute Research & Policy Centre.