21 November 2005

ECON Hearing on Asset Management

The EP Economic and Monetary Affairs Committee held a exchange of views with experts on the Green Paper on Asset Management. Mr Klinz, rapporteur in charge in charge for preparing the Parliaments’ position pointed out the weaknesses of the current directive as for example the difficulties of cross-border operations, a complicated registration procedure and possible contradictions between the UCITS and the MiFID Directive. The rapporteur therefore asked the experts which steps they think should be undertaken to improve the current Directive. As the UCITS Directive is not ruled under Lamfalussy, Parliament was particularly interested in the question if experts want this to make a Lamfalussy conform directive.

Neil Bohan, speaking for the European Commission, referred to the Green Paper and the 120 responses received on it. Main priorities identified included the simplification of the notification procedure for passporting funds. Concerns have been expressed regarding the splitting of supervision between different jurisdictions. A home country approach might therefore be useful. A revision of the current directive should also include a simplified prospectus.

Mr Bohan stated that all issues currently under discussion, e.g. cross-boarder issues, pooling, eligible assets, can be handled without changing the Directive to Lamfalussy conformity. The existing EU legislative framework can therefore be further developed to deal with some of the main structural challenges. Mr Bohan also stated that a White Paper will be issued in 2006.

Carlo Biancheri, representing CESR, said that the UCITS framework has served relatively well though there are problems and missed opportunities, on which CESR and the Commission are working to get the framework functioning better.

CESR agrees with the Commission that lots of improvements can be achieved within the current framework. However, there are big expectations among the European asset management industry on the changes and improvements needed. CESR is of the view that there are limits set by the current UCITS Directive that can not be overcome by the work of CESR alone at level 3.

CESR believes that the sector of investment management would significantly benefit from adjusting the UCITS Directive to the Lamfalussy process. Therefore, if and when it proves necessary to amend the UCITS Directive, adaptation to the Lamfalussy procedure would be required.

Mr Paelinck, representing “Eurosharholders” said that his organisation “is fully in favor of European Commission’s attitude towards easy cross-border commercialization of unit trusts but we would like to prevent possible misuse or so called “transfers” of “single passport” attributions to related financial instruments that the investors might consider to be “part of the single passport” attribution”.

Level 3 Committee for the Securities and Asset Management Industries
www.cesr-eu.org',WIDTH, 300, SHADOW, true, FADEIN, 300, FADEOUT, 300, STICKY, 1,DURATION,3500)" onmouseout="UnTip()");">CESR 211105.doc ' target='_blank'> Contribution CESR
Contribution Euroshareholders

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