Representatives of the European Parliament and the Romanian Presidency of the Council of the EU reached a provisional political agreement on Tuesday 5 February on proposals for a regulation and directive to facilitate and simplify the cross-border distribution of harmonised investment funds in the EU (see EUROPE 11979).
Currently, 70% of the total assets under management are held by investment funds authorised or registered for distribution only in their domestic market. Only 37% of UCITS and about 3% of alternative investment funds (AIFs) are registered for distribution in more than three Member States, according to the Commission.
The agreement reached after two 'trilogues' generally retains the general principles of the proposals, but makes some adjustments, according to a European source. In particular, negotiators had to strike the right balance between the objective of facilitating cross-border marketing activities and investor protection and market surveillance activities.
The new rules will also allow European asset managers to carry out pre-marketing activities to test the appetite of potential professional investors in new investment strategies.
The provisions harmonising the conditions under which an investment fund may withdraw from a domestic market have been maintained, with some clarifications. The Commission proposed to allow asset managers to stop, in well-defined cases, marketing an investment fund in one or more host Member States.
The Council supported the introduction of thresholds, while the Parliament opposed any quantitative limits.
The compromise text also introduces increased transparency and creates a single online access point for information on national rules related to marketing requirements and applicable fees, in order to help managers wishing to increase their cross-border activities to save the cost of legal advice on national rules.
The agreement has still to be validated by both institutions in the coming weeks. (Original version in French by Marion Fontana and Lucas Tripoteau)