Brussels, 11/06/2012 (Agence Europe) - An occupational pension fund should be able to invest its assets in shares in a mutual investment fund established in another member state even though the investment fund is not authorised to market shares in the member state where the pension fund is headquartered.
That was the ruling delivered by the Court of Justice of the EU on Thursday 7 June in Case C-39/11. The Court had been asked by the Verwaltungsgerichtshof (the Austrian administrative court) to which a dispute had been referred between the occupational pension fund Vorsorgekasse AG (VBV) and the Austrian financial markets supervisory authority (FMA). VBV is contesting a fine imposed on it for acquiring shares in a mutual investment fund established in Luxembourg, when this fund, contrary to what is required by Austrian law in such cases, had not received prior authorisation to market shares in Austria. The Austrian court asked the Court of Justice if this provision in Austrian law is compatible with freedom of movement of capital (Articles 63 ff of the TFEU).
The Court of Justice found that it is not. It says that the rules at issue constitute a barrier to the free movement of capital, as it is likely to dissuade (and, because of the financial penalties it carries for non-compliance, even prevent) occupational pension funds from investing their assets in mutual investment funds in other member states and requires the mutual investment funds to obtain authorisation in Austria even though they are approved in their own country. This barrier cannot be justified by any “over-riding reasons of general interest” relating to protection of public order or public safety, and is disproportionate with regard to the objective of prudential control of financial establishments in an attempt to ensure the stability and security of the assets of occupational pension funds and the protection of the benefits of the fund members as consumers. (FG/transl.rt)