“Although the EU’s actions have enabled the establishment of a single market for investment funds, they have not yet produced the expected results” concluded the European Court of Auditors in its special report on investment funds, published on Monday 21 February.
“We did progress with the creation of the single market, but the benefits for investors have not been seen. We should work on legislation to move these projects forward”, suggested Rimantas Šadžius, former Lithuanian finance minister and member of the Court of Auditors responsible for the report, at a press briefing.
Investment funds offer benefits to investors, such as lower management fees through competition and innovation, or access to more products. They are therefore “essential to enable companies to have better financing possibilities and not to depend only on bank loans”, said Šadžius.
In its report, the Court of Auditors recommends, among other things, that the Commission “carry out a comprehensive fitness check of the legislation applicable to investment funds and, depending on the outcome, take the necessary measures to achieve the objectives of the single market more effectively” by 2024.
The EU auditors also recommend that the Commission change the governance structure of the European Securities and Markets Authority (ESMA) to improve its effectiveness and increase convergence between national competent authorities by making their participation in its work mandatory.
Finally, they want investors to be better protected against undue costs and misleading information, in particular through stricter rules on incentives and the creation of an IT tool, a single point of access to information for investors.
“Investors have easy needs. More trust enables more competition, we can reduce costs by increasing transparency, but also reduce the risk of ‘greenwashing’”, concluded Mr Šadžius.
To read the report: https://aeur.eu/f/f1 (Original version in French by Anne Damiani)