On Monday, the European Commission announced that it had taken a “major step” towards the development of a Capital Markets Union (CMU) by promoting alternative sources of financing and removing barriers to cross-border investments.
The Commission said that the proposals will boost the cross-border market for investment funds, promote the EU market for covered bonds and ensure greater certainty for investors around cross-border transactions of securities and claims.
The changes, however, would impact both the alternative investment fund manager (AIFM) and Ucits directives, Efama warned.
Although it welcomes the initiative to facilitate cross-border distribution in Europe, Efama does not believe that adding additional regulatory requirements is the best way to achieve this.
Won’t address existing hurdles
The Association stated that it “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, said: “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’s] proposal unfortunately adds yet a new layer of rules. Efama would strongly support practical solutions at the level of [the European Securities and Markets Authority]. 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.”
‘Exceptional year’
The Efama statement was made the same day the Association declared 2017 to have been “an exceptional year for the European investment fund industry”.
Twelve European countries reported net asset growth greater than 10%, with total net assets of Ucits and AIFs surpassing the €15trn (£10.7bn, $14.8bn) mark at year-end.
During the fourth quarter of 2017, net assets of Ucits increased by 12% to €9.7bn, while AIF net assets rose 7% to €5.9bn.
