ACC and AIMA response to the EC proposal amending ELTIF Regulation
08 March 2022
The ACC and AIMA support the ambition shown in the proposed reforms of the European Long-Term Investment Fund (ELTIF) Regulation. These changes have the potential to unlock ELTIFs’ value proposition and deliver for EU investors and businesses alike.
The Alternative Credit Council (ACC) and the Alternative Investment Management Association (AIMA) have drafted a response to European Commission's proposal amending the European Long-Term Investment Fund (ELTIF).
In addition to the significant improvements proposed by the European
Commission, the ACC and AIMA position paper proposes supplementary
reforms to optimise the role of the ELTIF as part of the CMU while
remaining faithful to policymakers’ broader objectives and
responsibilities. Key amendments include:
- Borrowing: Allow loan-focused ELTIFs to use borrowing in the same way as other ELTIFs;
- Evergreen ELTIFs: Allow the development of open-end or
‘evergreen’ ELTIFs by disapplying the requirement to be closed-end and
fixed maturity where ELTIF managers can demonstrate that they have
robust liquidity risk management measures in place;
- Optional liquidity window: Lower the minimum lock-in period
to two years. Do not introduce Regulatory Technical Standards and
instead rely on the requirements introduced in the level 1 rules;
- Fund-of-fund structures: Remove the proposed limits on the amount of capital a retail ELTIF can invest via a fund-of-fund structure;
- Allow ELTIFs to fully benefit from master-feeder structures: Remove the provisions that prohibit the investment of an ELTIF feeder into a master AIFs other than a master ELTIF;
- Expanding the range of eligible assets: ELTIFs should be permitted to invest in all securitisations rather than just STS Securitisations;
- Central public register: Remove the requirement for an
ELTIF’s rules or instruments of incorporation of the ELTIF, the annual
reports, the prospectus and, where available, the Key Information
Document to be made available on the ESMA central public register; and
- Implementation: Introduce appropriate grandfathering
conditions for ELTIFs established prior to the implementation of
proposed legislative changes.
AIMA
© AIMA - Alternative Investment Management Association
