EFAMA replied to the OECD Pillar One – Amount A: Regulated Financial Services Exclusion public consultation. Aiming to change the views of those members of the OECD/IF that still maintain that asset managers should not be excluded from Amount A.
In this comment paper, EFAMA is taking the opportunity to:
- Explain how investment funds and asset management activities are heavily regulated
- Highlight that risk-based capital measures are already part of the existing EU legal framework (also transposed into national legislation) and applicable to our industry e.g. UCITS/AIFs Directives, MiFiD
- Raise awareness on competition issues that may arise in case banking and insurance industries are carved out and asset managers are not excluded
- Call for caution in the way some issues are addressed:
- For sake of consistency the definitions of excluded entities (investment funds) should be aligned with Pillar Two
- To avoid the imposition of onerous compliance costs and minimize the risk of potential disputes with tax authorities, care needs to be taken with the mechanics of steps 2 and 3 of the exclusion rules (i.e. the treatment of third party revenues and with the methodology for identifying in-scope profits).