Investment funds are an important tool to channel private savings into the economy and increase funding possibilities for companies. The EU investment funds market amounts to a total of €14.3 trillion. However, this market has not yet achieved its full potential. 70% of the total assets under management are held by investment funds authorised or registered for distribution only in their domestic market. Only 37% of Undertakings for Collective Investment in Transferable Securities (UCITS) and about 3% of alternative investment funds (AIFs) are currently registered for distribution in more than 3 Member States. This is partly due to regulatory barriers that currently hinder the cross-border distribution of investment funds.
This agreement will remove some of these barriers for all kinds of investment funds, making cross-border distribution more transparent, while removing overly complex and burdensome requirements and harmonising diverging national rules. Increased competition will give investors more choice and better value, while safeguarding a high level of investor protection.
More specifically, the main changes introduced by the new rules will:
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Make it easier for EU alternative investment fund managers to test the appetite of potential professional investors in new markets (so-called ‘pre-marketing'). This will help them to take more informed commercial decisions before entering a new market.
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Clarify customer service obligations for asset managers in their host Member State. This should ensure that investors have access to a uniform, high level of customer service across the EU without imposing on asset managers the cost of maintaining a physical presence or local facilities in all host markets.
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Align procedures and conditions for managers of collective investment funds to exit national markets when they decide to terminate the offering or placement of their funds (so-called de-notification procedure)
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Introduce increased transparency and creation of a single online access point for information on national rules related to marketing requirements and applicable fees. This should help managers who want to increase their cross-border activities to save the cost of legal advice on national rules.
Press release
© European Commission
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