EFAMA concerned about Commission’s definition of “high quality liquid assets” in CRD IV consultation
04 May 2010
Some of the Commission proposals would have a considerable indirect impact on the fund industry as credit institutions represent an important investor group, EFAMA argues. It also hopes that CRD IV will facilitate the qualification of fund units as collateral eligible for credit risk mitigation.
Although fund management companies themselves are in most cases not subject to the CRD, credit institutions represent an important investor group and the application of some of the proposals set out in the consultative document would have a considerable indirect impact on the fund industry. EFAMA is particularly concerned about the consequences of the proposed definition of “high quality liquid assets” for European investment funds. EFAMA also hopes that the forthcoming legislative proposal dealing with the CRD will facilitate further the qualification of fund units as collateral eligible for credit risk mitigation. Our specific comments on these issues are detailed in sections 1 and 2 below.
In addition, EFAMA strongly advocates that the amendments to the Basel II framework that are currently being drawn up by the Basel Committee are applied in a proportionate manner, taking due account of the differences between large internationally active banks – for which Basel II was designed – and the variety of firm types of varying sizes and activities that fall under the CRD. EFAMA’s key concern in this regard is that investment management companies, as firms operating under a limited license with a completely different risk profile to that of either a credit institution or an investment firm that is capable of dealing on own account, be subject to a prudential regime that is appropriate to the risks they represent.
© EFAMA - European Fund and Asset Management Association
