EACB disagrees with Commission's Green Paper on Investment Funds

15 November 2005

The European Association of Cooperative Banks issued its comments on the Commission’s Green on Investment Funds stressing that it is of the utmost importance that the national transposition of the European rules avoids the so called gold-plating. The EACB cannot see any need for further regulation to address risks in UCITS management and administration. There are enough measures in charge of investor protection in addition to the depositaries like the oversight by non executive members of the board, by accountants, by compliance etc.

The EACB does not share the opinion that only an open architecture will ensure best advice. The obligation of a suitable investment advice is valid in general for investment firms.

In EACB’s view the regulation of investment advice has to be realistic. The EACB argues that no investment firm has a survey of the performance of all funds disposable and that it is impossible to compare all these products in detail. Performance doesn’t seem to be a sufficient reliable measure for the evaluation of the quality of funds as several examples could show. Finally it should be highlighted that the distribution of third party funds is not obstructed; to the contrary, the client gets each fund on demand.

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