The European Commission (EC) has tabled proposals that would reduce barriers to cross border distribution and encourage a more "proportionate" approach to the regulation of investment firms. As part of the final stages of its Capital Markets Union (CMU) initiative, the EC aims to ease managers' capacity to lend to and invest in European businesses. "We want to create the right conditions for more funding to flow to the real economy, so that European start-ups and SMEs can get the finance they need to invest, innovate and grow," said vice-president Valdis Dombrovskis. "For this, we need to break down barriers to cross-border investment, improve access to alternative finance, improve the ability of SMEs to tap capital markets, and more." EFAMA proposes digital passport for pan-European fund access In a list of nine proposals, the Commission backed facilitating the cross-border distribution of investment funds, with particular reference to UCITS and alternative investment funds (AIFs). The supervisory body also wants to enhance the "proportionality of rules" for investment firms, regulating them more appropriately in terms of size and business-type. In addition, the EC wants regulators to provide better guidance on existing EU rules for the treatment of cross-border EU investments and provide an adequate framework for the "amicable resolution of investment disputes". Head of Vanguard Asset Management's European business Sean Hagerty has backed the plans, arguing they would improve "competition and accessibility" among asset mangers, helping to lower the cost of investment. "Increased retail investment will only happen where consumers have access to attractive investment propositions on competitive and transparent terms and through distribution channels where the interests of investors and intermediaries are aligned," he added, The EC also reiterated calls for supervisory convergence, a core element of the CMU project, which would see European regulators enforce rules in a more similar way. European Commission to investigate fund fees and performance "Asset managers play a key role in the financing and growth of the European economy," said Peter De Proft, director general of the European Fund and Asset Management Association (EFAMA), who also welcomed the proposals. "The CMU will strengthen this contribution by ensuring the competitiveness of the industry and safeguarding investor protection." The EC plans are based on a January review of the CMU initiative, which aims to create an integrated capital market in the European Union by 2019. Follow Investment Week on LinkedIn Mike joined Investment Week in May 2017 as an asset management correspondent, also covering the regulatory beat. Prior to joining the team he worked at HFMWeek, covering the global hedge fund industry. Read more on Mike
The European Commission (EC) has proposed easing restrictions on the buying and selling of funds and securities throughout the bloc. The European Union's (EU) executive branch has also tabled changes to the regulation of of investment companies. In a statement released today, the EC said that it is "committed to ensuring an effective functioning capital markets in Europe by removing barriers for investors wishing to invest across borders."