On Monday, the committee adopted the uniform rules on the authorisation, investment policies and operating conditions for European long-term investment funds (ELTIFs) with 43 votes to 3.
The Economic and Monetary Committee adopted new rules
for long-term investment to facilitate the flow of funds towards the
real economy, including green and digital priority areas.
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Michiel Hoogeveen
(ECR, NL) the lead MEP said: “While the legislative framework for
European long-term investment funds (ELTIFs) was adopted in 2015, so far
their market remains small. This is despite ELTIFs’ potential to
provide retail investors access to assets such as infrastructure
projects, real estate and SMEs through a safe, well-diversified and
well-managed product that is subject to appropriate regulatory oversight
and investor protection safeguards.
The Parliament position voted in ECON
today aims at accelerating the uptake of ELTIFs and thus ensuring more
financing of long-term projects throughout the Union. To make the ELTIF
industry more vibrant, the Parliament negotiating team defends bold and
ambitious improvements to the ELTIF framework, which should enable more
investments in for example technology and sustainable projects, increase
participation of retail investors, and grant fund managers more
flexibility in setting up ELTIFs.”
Protecting Investors
All ELTIFs marketed in the EU have to be
authorised. In addition to this, MEPs want the European Securities and
Markets Authority ESMA
to keep and update quarterly a central public register of authorised
ELTIFs with updated links to their annual reports and where available,
the Key Information Document, so that investors can analyse and compare existing ELTIFs.
While MEPs agreed to make it easier for
ELTIFs to borrow cash in foreign currencies, they decided that ELTIFs
marketed to retail investors should be permitted to borrow cash
amounting to up to 70% of the net asset value (NAV) of the ELTIF (for
professional investors it should be extended to 100%). Retail investors
should also be protected from being charged unjustified additional costs
and given a clear written alert informing them that investing an amount
exceeding 10% of their financial instrument portfolio in ELTIFs could
constitute excessive risk taking in case an ELTIF is considered
unsuitable for a retail investor.
Finally, MEPs propose removing existing
tax barriers and introducing tax incentives, in order to ensure an
adequate level playing field across the EU that paves the way for a
truly cross-border market for ELTIFs....
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