In a bid to facilitate cross-border distribution of investment funds in Europe, the European Commission has this proposed a legislative review of both the AIFM and UCITS Directives, the main pillars of the legislative framework for investment funds.
The European Fund and Asset Management Association (EFAMA) says it welcomes efforts to deepen the Single Market for investment funds in the EU, and while it believes there is significant room for improvement and further efforts need to be made in order to tackle the remaining barriers for cross-border distribution, it does not believe adding additional regulatory requirements is the best way to proceed at the present time.
Instead of adding new rules to the existing complex structure, EFAMA says 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 to have access to a larger and more diversified choice of investment opportunities.
Peter De Proft (pictured), EFAMA Director General, says: “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. The EC 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 in discussion 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 it believes can be effective in further integrating the EU Single Market for investment funds. EFAMA says it is looking forward to continuing that discussion during the legislative phase.
