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IFRS 9 phase 1 implementation will have a negative impact on asset management industry

Tax & Accounting
11 May 2016 | Policy position
Tax & Accounting
IFRS 9 phase 1 implementation will have a negative impact on asset management industry

This memo covers investments in collective investment vehicles (CIV) in contractual, trust, or corporate form (simply referred as funds) from corporate and institutional investors acting on their own account (e.g. banks, life insurers, industry companies, etc.) and the accounting treatment of such investments under the upcoming IRFS 9 rules. While IFRS 9 contains many positive evolutions, many of our members have been warned by their client investors that IFRS 9 would change their attitude towards investing in funds. Effectively, IFRS 9 would breach the overarching principle that the regulation should not create any distortion between direct holdings or investments through a fund vehicle. IFRS 9, as it stands today, would disadvantage fund investors by not allowing them with any option with regards to the accounting methodology used. This comparative disadvantage for investment funds adversely affects the economic efficiency and should be avoided. Therefore, EFAMA urgently presses authorities to clarify the situation of funds under IFRS 9 before endorsing this new norm

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