EU Fund regulation
The EU fund product landscape is deep, diverse and dynamic. Since the birth of the UCITS framework in 1985, European institutions have progressively refined it into a global “gold standard”, one that successfully balances strict regulatory requirements with the flexibility required by manager to meet evolving client demands. The successful evolution of UCITS was followed by the creation of alternative investment funds (AIFs) under the 2011 AIFM Directive, adding a second important pillar to EU fund/manager regulation. Building on this second pillar are further ambitious EU fund products, such as EUSEFs, EUVECAs and ELTIFs. EFAMA has helped guide all of these key regulatory developments, informing policymakers and regulators on their main merits and drawbacks, while also keeping a close eye on their respective review initiatives.
EFAMA strongly supports a fundamental review to the ELTIF regime, in view of broadening its eligible investment universe and adapting it to better meet retail investor needs. We are also closely monitoring the review of the AIFM Directive from a product regulation standpoint, including possible spillover effects on the UCITS Directive requirements. Further work involves keeping pace with relevant ESMA initiatives, such as the work around the Common Supervisory Action on costs and fees for UCITS.
EFAMA Response to the IOSCO Consultation on CIS Liquidity Risk Management Recommendations (CR04/2017)
EFAMA welcomes the opportunity to provide its comments on the Good Practices to be adopted by IOSCO for the Termination of Investment Funds. We agree that the decision to terminate a fund can have significant impact on investors in terms of the costs associated with such an action, or the ability for investors to redeem their holdings during the termination process. In this regard, even in the context of a fund’s voluntary termination, asset managers must abide by their fiduciary obligation to act in the best interest of their investors.
Fund managers retain only 41% of the total cost paid by retail investors | Market Insights | Issue #6
EFAMA has released its latest Market Insights report titled “Perspective on the costs of UCITS”. The full report breaks down the costs of UCITS, focusing on the fees charged for the different services provided along the investment fund value chain and
While cognisant of the FSB’s strict timelines in view of upcoming G20 summits, these should not come at the expense of a necessary and more informed debate on the causes at the root of last year’s stresses in global short-term funding markets (STFMs) and on ways to remedy these in the future. In fact, the options presented in the consultation report appear hurried and dismissive of critical facts, calling therefore for a deeper engagement with the global financial and investing community at large.
EFAMA wholeheartedly supports a retail investment strategy that gives EU citizens the necessary tools and the confidence to put their savings to work by investing in capital markets.
A report commissioned by the European Fund and Asset Management Association published on 4 October 2011 aims to give investors greater transparency and understanding of cost breakdown within the Total Expense Ratio ("TER") of European mutual funds.