On Wednesday 11 May, MEPs on the Economic and Monetary Affairs Committee discussed the amendment of the regulation (2015/760) on European Long-Term Investment Funds (ELTIF) (see EUROPE 12840/6, 12837/8). Included in the Capital Markets Union package, this revision aims to stimulate ELTIF investments, which have been little used so far.
“We now face a unique opportunity in the coming months to fix the framework of European long-term investment funds”, said Parliament’s rapporteur Michiel Hoogeveen (ECR, Netherlands). But, according to him, “without meaningful, bold and ambitious reform, this will not happen”.
He stressed the importance of democratising finance, as funds like this “can protect our citizens savings from inflationary pressures”.
Parliamentarians spoke on the 286 amendments tabled, ahead of the meeting of negotiators from each group next week. For the representatives of the ECR, EPP and Renew Europe groups, the liberalisation provided for in the revision is a good thing. “We should let the market decide what works and what doesn’t”, argued Jessica Polfjärd (EPP, Sweden).
These groups are therefore in favour of introducing riskier products and not introducing taxonomy requirements. Mr Hoogeveen warned of the risks of distortion of competition, protectionism and over-regulation, as ELTIF should be “a business-friendly framework”.
Ms Polfjärd stressed the need to “remain proportionate in our approach”. According to her, ELTIF products can achieve long-term goals, including removing or significantly increasing market caps.
Ondřej Kovařík (Renew Europe, Czech Republic) wanted to amend the legislative text to introduce the concept of leverage based on net asset value.
The S&D and Greens/EFA groups call for more sustainable assets and better consumer protection.
Elisabetta Gualmini (S&D, Italy) stressed the importance of investor suitability tests, with the inclusion of a blocking power in case of a negative suitability test. On increasing leverage or limiting the liquidity borrowing threshold for ELTIF funds aimed at retail investors, “we suggest returning to the 30% threshold, as currently provided for in the current regulation”, she explained. A request shared by Claude Gruffat (Greens/EFA, France), who regretted that “this review risks compromising the long-term aspects”.
To read the amendments tabled: https://aeur.eu/f/1lv (Original version in French by Anne Damiani)