According to a roadmap published on Wednesday 16 September that is open to public consultation until 14 October, the European Commission wants to review how well the European long-term investment funds (ELTIF) regime is working in order to improve its performance.
According to the document, in the third quarter of 2021 the Commission is planning to issue a proposal to revise Regulation (EU) 2015/760 on the European long-term investment funds regime, which is intended to facilitate investment - through alternative investment funds - in long-term assets such as transport and social infrastructure projects, real estate and small businesses.
The Commission states that: “In the absence of EU action, the most likely outcome is continued under-performance of the ELTIF sector and increasing market fragmentation impairing the effective functioning and development of the market”.
The Commission notes that, since the legal framework was adopted in 2015, only a small number of ELTIFs have launched, with a relatively small amount of net assets under management. The Commission believes there is a need to better understand the reasons for the low take-up.
In June, the High Level Forum on Capital Markets Union (see EUROPE 12503/13) called for a review of the ELTIF Regulation to reduce potential barriers to investment.
The Commission intends to investigate the alleged limitations of the ELTIF regime for professional investors, including possibly broadening the scope of eligible assets, as well as the demand-side limitations for retail investors.
It says it will analyse various policy options, ranging from soft-law measures, such as the European Securities and Markets Authority’s interpretative communication or guidelines to further clarify the applicability of existing EU legislation, to the introduction of targeted amendments to the legal framework.
The roadmap can be found at: https://bit.ly/3iDTeNH (Original version in French by Marion Fontana)