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Speech by the CMVM Chair, Gabriela Figueiredo Dias, at the CMVM Annual Conference ‘Investing in the Recovery: The Role of the Capital Markets’


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CMVM Annual Conference

8 October 2020

Gabriela Figueiredo Dias

Chair of the CMVM Management Board

Let me start by welcoming the Secretary of State for Finance, who is honouring us with his presence today and all the participants, both in-person or online. Thank you all for your interest in the CMVM’s 2020 annual conference.

This year’s CMVM Annual Conference is part of the celebration of the World Investor Week, promoted by IOSCO and coordinated in Portugal by the CMVM.

The investor protection that this World Week aims to promote, as well as the current particularly demanding macroeconomic and financial context, are precisely the background for our discussion today and the raison d’être of our meeting’s topic: ‘Investing in the Recovery: The Role of the Capital Markets.’

The Covid-19 pandemic caused an external shock of historical proportions on the real economy and, consequently, on the global financial markets, producing a generalised devaluation of all asset classes, and a period of intense volatility and high uncertainty for our societies.

In recent months, we have seen a partial recovery in some markets, including equity and asset management, as well as significant reductions in private debt cost. The successful intervention of central banks and governments contributed decisively to this evolution.

The worst was avoided but there is no place for complacency.

The recovery and apparent tranquillity are taking place in a context wherein the fundamentals of the economy are showing disturbing signs: in its latest forecasts, Banco de Portugal anticipates for this year, a 8.1% GDP drop and a 7.5% unemployment rate. According to the same forecasts, it will take two years to regain 2019’s product level and, in 2022, we will still have more unemployment than last year.

As the economic shock spreads more intensely, other warning signals will be expected. Private and public indebtedness will increase, as will the number of bankruptcies and defaults, creating new burdens on the financial system, particularly on the most fragile entities and with less financial autonomy.

Therefore, there is a clear expectation that a moment will come when the dissociation identified between the behaviour of the markets and of the real economy will be corrected and the risk premiums of companies will rise globally. There is a very true risk of a significant worsening of financing conditions through borrowed capital, and particularly, through the banking system.

In this context, the capital markets will play an even more pressing role as an alternative source of financing and they should take on a focal role in the recovery, particularly for channelling household savings into the economy, offering families investment opportunities with higher returns and contributing to the recapitalisation of companies, allowing them to have a balanced, diversified and more resilient capital structure.


For the national market to fully take on this role, an integrated approach to its various dimensions is essential, and must be coherent between the various instruments to support economic recovery at national and European level, especially the Portuguese recovery and resilience plan, and initiatives proposed by the European Commission for relaunching the Capital Markets Union (CMU). We therefore appreciatively received the Government’s announcement to create a task force for addressing the recent OECD recommendations on enhancing the national capital markets.

The OECD’s contribution is valuable not only due to its depth, detail and scope, but also its motivation when diagnosing the market potential of some Portuguese companies. Currently, there are over 400 substantially- sized unlisted non-financial companies, 67 of which have assets that exceed the average value of the assets of listed companies, therefore with a first line access to market financing. Besides these, one has a high and predominant number of smaller companies, which we envisage will be expanding, and which cannot be omitted from a project that stimulates the capital markets.

Without going into detail concerning these recommendations, there are several areas that, from the CMVM’s perspective, deserve urgent consideration. We are already intervening concerning some of these; as to the others, we would welcome a rigorous intervention with the interested parties.

I would highlight the following:

  • Regulatory streamlining and modernisation with a view to eliminating lop-sided burden, including the revision of the Securities Code, for which we have already submitted a proposal; the ongoing revision to the General Framework for Collective Investment Undertakings; the planned revision of the Commercial Companies Code and, finally, the revision of a set of CMVM regulations which is being finalised. As examples of the results of these works, I would mention a closer proximity to the solutions provided for in European law, already known to investors operating in that space; the elimination of additional requirements (goldplating) that burden the national market agents compared to their competitors; the expansion of flexible voting structures, which include loyalty shares and plural voting, responding to the concerns of controlling and founding shareholders vis-à-vis shareholder-investors guided predominantly by purely financial interests; the streamlining of supervision and which is reflected in an expected reduction of more than 30% of reporting duties to the CMVM; or the already accomplished major reduction in the response times in granting authorisations and approval of prospectuses.
  • Creating a platform that brings together the various stakeholders for exchange of information on possible obstacles and opportunities in accessing the market, which additionally, is in line with the reinforcement of the interaction with supervised entities and the entities that represent them, that the CMVM has been practicing in a structured and systematic way.
  • Possible tax adjustment measures, such as equitable treatment between debt and equity or the granting of long-term savings and investment incentives.
  • Creating adequate crowdfunding instruments for SMEs, allowing for example, the more intensive use of investment funds and group bonds, or even the securitisation of their assets, which, with a public warranty, may allow these companies access to the capital markets at lower costs, and more attractive ratings for the issuance of securitised instruments.
  • Lastly, the desirability of measures aimed at mitigating market failures that limit their efficiency, with particularly negative effects on small and medium-sized companies, which include incentives for research and financial analysis, credit risk ratings or mechanisms that ensure liquidity, namely through market making instruments by specialised operators.

Clearly, any national approach cannot disregard the European strategy to boost the capital markets in the union which is embodied in the European Commission’s action plan for the CMU, released on 4 September.

Among the 16 measures presented in this new plan, and without being exhaustive, I believe that four of them deserve to be highlighted due to their transformative potential:

  • the proposal for creating an EU-wide platform (single European access point) that provides investors with reliable and continuous access to financial and sustainability information on companies;
  • revising the regulatory framework for European Long-Term Investment Funds (ELTIFs) and, overall, creating appropriate investment instruments to meet the needs of retail investors at the time of their retirement;
  • several changes to the regulatory landscape of prospectuses and market abuse aimed at making SMEs’ access to the market more attractive; and
  • lastly, the development of investment product comparison tools, including the costs involved.

From the CMVM’s perspective, we have identified, as a vital means for dynamism and success of the capital markets union, placing it at the service of SMEs and more broadly, of a European single market, greater supervisory concentration and convergence at the European level; providing simpler and safer products for offering more transparent and fair cost structures and, thus, greater return for investors; and an absolute focus on ethics, professionalism and governance of financial intermediaries.


Ladies and gentlemen,

It is essential to prevent the post-Covid recovery from being mainly financed with debt and to pave the way for the markets to play a decisive role in recapitalising companies and allocating savings, by ensuring families, a fairer distribution of the recovery benefits; and promoting more balanced and efficient financing structures for companies.

Among the proposals debated here today, there is a prerequisite that we must not lose sight of, since our success depends on it: I mean placing the legitimate interests of investors as the focal point of the measures to be adopted at national and European levels.

Without confident, safe and protected investors, there will be no balanced market or financing for our economies.

Portugal and Europe therefore need to ensure that markets and more products are safe and sustainable, in order to meet the trends and preferences shown by investors in recent years; strict transparency and proportionality of the costs associated with each investment; and to increase the requirement standards of regulators, but above all, of society in general, regarding the models of good governance practices, the ethical principles embedded in management and business models, and the suitability and independence of managers, thereby reconstructing the confidence that the violent financial events of the past two decades, have battered dramatically.

This is the path we have sought to follow at the CMVM, and which will continue the 2021, with four highlighted initiatives:

  • The drawing-up a non-financial information guide for reporting on company policies regarding sustainability, unburdening the regulatory effort required of them and allowing investors to better understand and adapt to their investment preferences.
  • The gradual deepening of supervision on investment fund costs and commissions, seeking to make them more transparent and fairer.
  • The supervision of asset valuation criteria and practices and of liquidity of investment funds, with a view to ensuring some control and monitoring of the effects of the pandemic on the market, investors and financial stability.
  • The continued focus on rigorous assessment of governance models and practices, ethical standards and suitability requirements of supervised entities, with the CMVM recently issuing guidelines on these aspects.

Portugal needs a strategic plan for the capital markets, and this must be incorporated in the national resilience and recovery strategy that is being designed. This strategic plan, integrating all relevant sectors and managers, cannot disregard the investor at its focus point, aiming at generating confidence, creating opportunities for families and the productive channelling of their savings to the economy and our companies, for a better Portugal.

Investors, the market and the national economy can expect the CMVM’s total commitment to the challenge that lies ahead.

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Regulator Information

Abbreviation: CMVM
Jurisdiction: Portugal

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