European Commission

Luxembourg, which hosts more than a quarter of all assets held in European investment funds, has raised a red flag over fresh European Commission plans to create a single supervisor for financial services.

Luxembourg’s Prime Minister Luc Frieden has urged European leaders to cut regulatory complexity and mobilize private capital to address the continent’s economic and security challenges, arguing that excessive bureaucracy is stifling investment.

The European Commission has set out yet another grand vision for Europe’s capital markets. Behind the lofty rhetoric, the plan leaves a familiar set of unresolved questions.

The ECB drifts from its core mission, embracing politics over monetary policy—what does this mean for Europe’s future? Edin Mujagić breaks it down.

The European Union is preparing its next wave of financial sector reforms, and 2025 could mark a turning point.

With the European Commission confirming on Tuesday that the Level 2 Regulatory Technical Standards (RTS) for the revised European Long-Term Investment Funds (Eltifs) regime are on track, the alternatives industry is shifting its focus towards overcoming operation challenges such as on co-investments, liquidity management and handling different tax regimes across the EU market.

Some 40 new Eltif funds, enabling European retail investors to put their money in private markets, are understood to be in the pipeline, due to enter the market in the coming months.

When the long wait for the retail investment strategy finally ended on Wednesday at a European Commission press conference in Brussels, Commissioner Mairead McGuinness gave the financial industry three years to hit her targets for transparency, costs and retail investor participation, or an outright ban on kickbacks will be back on the table.

Fund firms face the prospect of EU rules setting standards of “value for money” for their investment products under the Retail Investment Strategy due to be unveiled on 24 May. This could include disincentives, for example, to charging active management fees for an investment that underperforms an index fund. For all the discussion of a ban on inducements for investment advice, the commission has decided to propose a more limited inducement ban on execution-only investments. 

For Luxembourg’s crypto community, Thursday’s adoption of the MiCA regulation in the European Parliament reassures established financial players and offers an EU passportable licensing regime with no need for national transposition in member states. “It enables new ways of issuance and distribution of new types of assets,” said ABBL.