AIFMD

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.

Proposed amendments to EU rules for alternative investment funds have passed through technical discussions in Brussels without much damage. The outcome of these ‘level 1’ talks means that the AIFMD and Ucits review now is back on course to be completed shortly. The EU’s presidency is expected to issue a statement next week.

Negotiators from the European Council and European Parliament have reached a provisional agreement on new rules aimed at enhancing European capital markets and bolstering investor protection within the EU. The deal, reached during the early hours on Thursday, includes consensus on leverage limits and passporting rules for Loan Originating Funds (LOFs), marking a significant milestone in the regulatory landscape.

With a few days to go before crucial EU talks that could lead to major reforms of the Markets in Financial Instruments Directive, known as Mifid, EU asset managers, banks, and brokers are urging policymakers not to succumb to pressure that could lead to “suboptimal outcomes” in the review.

When it comes to EU financial regulation it won’t surprise anyone to hear that more is in store for the year ahead. Investment Officer looks ahead together with Vincent Ingham, director of regulatory policy at the European Fund and Asset Management Association in Brussels.

Alarmed efforts by European green and microfinance fund providers, led by Dutch firms Triodos and ASN, to get the European Commission to rectify what looks like an omission in its proposed investment fund legislation risk being dismissed as “small beer” and may be overlooked. “We have to keep making noise.”

The financial industry often baulked at the tens of billions of euros it pays for EU’s comprehensive regulation framework put in place post 2008 financial crisis. With markets in turmoil over Russia-Ukraine, that tone now is different.

On-going high-level talk about reform of AIFMD and UCITS is generating nervousness in the European asset management industry. Was the 18 August letter on this topic from ESMA to the European Commission really about seeking to promote efficiency, or is it more a post-Brexit reckoning that could upset current successful arrangements?