In June last year, the European Commission published legislation setting out a draft framework which would establish a long term investment vehicle which would invest in projects in Europe and provide a “safe” income for institutional investors, such as pension funds.
Last week, the European Parliament took its first vote on the legislation after receiving the legislation for a fist reading in mid-March.
The vote, and an additional report from the European Parliament, was praise by the European Fund and Asset Management Association, the European Private Equity and Venture Capital Association and the Federation of European Securities Exchanges.
In particular, the organisations welcomed the “additional flexibility” in the proposals, specifically the:
- Inclusion of listed small and medium-sized enterprises up to €1bn market capitalisation in the scope of eligible investments
- Additional flexibility for professional investors and enhanced status for semi-professional investors
- Maintenance of the “retail passport” for ELTIFs
Peter De Proft, director general, EFAMA said: “EFAMA welcomes the adoption of the European Parliament report. It represents a vital first step towards building an EU label that could be an important source of financing of growth in the EU in the future.
“However, further steps are needed in order to ensure market success for the new product. We hope that discussions in the Council and the upcoming trilogues will ensure a more balanced and better-designed structure of ELTIFs, with the aim of matching investors’ needs and facilitating long term investment in the EU. If ELTIFs are to be successful, both of those objectives have to be fully respected.
