EFAMA firmly supports the European Commission’s proposal to revise the European Long-Term Investment Fund (ELTIF) Regulation.
The revised
framework has the potential to transform ELTIF into a product of choice
for European investors and to become a cornerstone of the Capital
Markets Union.
The draft proposal broadens the scope of the current eligible asset universe, thus allowing for more diverse investment opportunities. As
an incentive to increase retail participation, the European Commission
proposes to reduce the threshold of eligible investment assets to 60% of
the ELTIF capital, as well as to remove the minimum investment amounts
for retail investors.
Easing
such restrictions and allowing retail investors to commit lower amounts
to an ELTIF will increase its contribution to the funding of the real
economy, according to EFAMA. The lower restrictions on real asset
holdings and higher market capitalisation thresholds are also welcome,
as they will allow managers to include more companies as well as smaller
but potentially valuable projects into the ELTIF.
Some parts of the proposal, however, will require scrutiny. EFAMA
appreciates the European Commission’s efforts to respond to investors’
needs by considering solutions that allow for more frequent redemptions.
Yet, the association believes that further clarifications are needed,
especially regarding the proposed Liquidity Window Mechanism and whether
it will deliver on its intended objective as is.
EFAMA will analyse the European Commission’s proposal in more detail in the coming weeks and the association will keep engaging in
a constructive and open dialogue with the European Commission and the
co-legislators to ultimately ensure the success of the ELTIF vehicle.
EFAMA
© EFAMA - European Fund and Asset Management Association
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