Laws and Regulations

As European regulators reassess what Ucits funds should be allowed to hold, Luxembourg’s fund industry is drawing a clear red line: do not compromise a global brand that already works. The Association of the Luxembourg Fund Industry cautioned that proposals to tighten eligibility rules could push the framework backwards rather than modernise it.

Despite a steady increase in the number of European long-term investment funds over the last two years, concerns around gold-plating continue to persist, with France attempting to exclude non-domestic Eltifs from French life insurance products. For Alfi CEO Serge Weyland, “this is against all the EU laws.”

Esma and the European Commission have clarified how Eltif managers must apply the “look-through” principle when investing via intermediary vehicles, settling cross-border divergences and endorsing Luxembourg’s supervisory approach. The clarification provides significant comfort to Eltif managers active in private equity, infrastructure, real assets, and private credit, where multi-layered holding structures and aggregator vehicles are common, according to Sebastiaan Hooghiemstra and Gabriël Storm of Loyens & Loeff.

EU financial regulation in 2026 will mean tougher scrutiny from supervisors and fewer new rules. With major frameworks on fund regulation, anti-money laundering, sustainability and market structure largely in place, the focus is shifting from lawmaking to enforcement. Across liquidity management, delegation and distribution, AML oversight and transparency requirements, experts see firms entering a year shaped by supervisory interpretation and uneven application.

President Donald Trump’s call to cap U.S. credit card interest rates at 10 percent is weighing on bank stocks and raising broader concerns about consumer credit and confidence.

The failed partnership between Italy’s Generali and France’s BPCE is more than a collapsed deal in European asset management. It exposes how challenging it remains for Europe to build financial scale once a project becomes truly cross-border, and how protectionist reflexes, legal uncertainty and unfinished integration can combine to smother a transaction.

The US government is moving to scale back the influence of proxy advisers ISS and Glass Lewis, casting the firms as ‘foreign-owned political actors’.

The private markets model is edging into the US retail retirement system, where policymakers are moving to allow 401(k) investors to gain exposure to private assets, potentially opening up a trillion dollar market to alternative managers as early as February.

European regulator Esma is advocating a revision of research rules, expected to take effect next year. Allowing research and trade execution to be paid for jointly again could create new opportunities for smallcap coverage.

Europe’s fund market is on the brink of a major reshuffle. Under SFDR 2.0, the European Commission’s revised sustainability rulebook, non-sustainable Article 6 funds are set to become the dominant category at the expense of the most popular sustainability category, Article 8.