Laws and Regulations

The European Union’s Retail Investment Strategy is teetering on a tightrope.

Higher interest rates, the pace at which central banks will cut rates, a possible recession and regulations on sustainability and digitalisation. In their expectations for 2024, Investment Officer experts and columnists name these as the key themes. 

In the line-up below, our columnists and knowledge experts tell what challenges they expect within their field for the coming year. Which immediately answers the question about which topics you can expect contributions from them in 2024.

UK financial regulator the Financial Conduct Authority has announced plans to introduce a new overseas fund regime in April 2024. The FCA has also said it will hold a consultation in advance of the new system taking effect.

The European Council and the European Parliament on Thursday reached a preliminary agreement on a new European directive mandating corporate social responsibility for large companies, but that will, following lobby pressure, exclude the financial sector.

Luxembourg’s Financial Intelligence Unit is key to fulfilling Luxembourg’s international anti-money laundering/terrorist financing prevention obligations, reducing the perception that this country’s financial sector is somehow “above the rules”. Investment Officer recently had an opportunity to speak with FIU director Max Braun.

Investment firms are struggling with AML/KYC requirements, with one fund manager saying his AML/KYC team can’t grow fast enough. The push towards ‘retailisation’ of private markets is only going to increase the stress.

European pension savers are facing significant hurdles due to high fee levels and a lack of transparency in pension savings markets.

Despite a call by the ECB, European financial institutions do not seem to be immediately covered by the new corporate responsibility directive. A majority of member states reportedly do not want to decide on this until after the directive comes into force for non-financial companies. 

The current approach to the EU’s retail investment strategy may not adequately address broader issues such as the retirement savings gap, reflecting a need for a more holistic approach to financial education and pension policies, a leading European industry representative argues.

European regulators, especially those in Paris and Luxembourg, are at odds over the regulatory and technical standards for the updated European Long Term Investment Funds scheme, known as Eltif 2.0, according to people familiar with the discussions.