Today, the Commission is proposing changes that include both the AIFM and UCITS Directives, which are the main pillars of the legislative framework for investment funds.
Facilitating cross-border distribution of investment funds in Europe and seeking further ways to deepen the Single Market for investment funds is a goal that EFAMA welcomes. As shown by the important rise of cross-border funds in Europe over the last decade, investment funds are probably one of the best examples to date of a generally well-functioning EU single market in the area of financial services. Yet there is significant room for improvement and further efforts need to be made in order to tackle remaining barriers for the cross-border distribution of investment funds.
However, EFAMA does not believe that adding further regulatory requirements via a legislative review at this stage is the most appropriate means to address existing hurdles to the cross-border distribution of funds. Instead of adding new rules to the existing complex structure, EFAMA considers that the main priority should be to further consolidate and clarify the existing rules and processes. This would also be in line with the CMU goal of allowing professional and retail investors having access to a larger and more diversified choice of investment opportunities.
Peter De Proft, EFAMA Director General, commented: “The main barriers to the cross-border distribution of funds, as identified by asset managers and investors, are the lack of clarity and transparency of existing rules, along with additional layers of regulatory requirements imposed at national level. [Today’s] proposal unfortunately adds yet a new layer of rules. EFAMA would strongly support practical solutions at the level of ESMA. These will enhance supervisory convergence and legal certainty on the basis of a common understanding among national regulators and can be developed and implemented within a much shorter period of time than a legislative proposal.”
The European asset management industry has been discussing with the European Commission and European and national regulators over the last two years on ways to appropriately tackle those barriers and has proposed a concrete list of actions to be taken in the short and the longer term, which can be effective in further integrating the EU Single Market for investment funds.
EFAMA looks forward to continuing the discussion during the legislative phase.