Negotiators from the European Parliament and the Council of the European Union reached an agreement on Wednesday 19 October on the revision of the ‘European Long-Term Investment Fund’ (ELTIF) Regulation (see EUROPE 13046/31). As part of the Capital Markets Union package, this text aims to create appropriate regulatory oversight and better investor protection.
The aim is to make these hitherto little-used investment funds more attractive in order to stimulate the financing of long-term projects such as infrastructure, real estate or SMEs throughout the EU.
“EU companies get better access to more stable and diversified long-term financing while investors are adequately protected by strong safeguards”, welcomed Parliament rapporteur Michiel Hoogeveen (ECR, Dutch) in a statement.
All ELTIFs will have to comply with the Markets in Financial Instruments Directive (MIFID). They will be tested for their suitability for retail investors and will have clear warnings about their illiquidity or volatility.
To close the long-term financing gap in the EU and meet the 2030 energy and climate goals, MEPs ensured that the Regulation refers to the ‘European Green Deal’. ELTIFs will be able to invest in European green bonds, if they meet the requirements of the ELTIF framework on issuance characteristics and long-term orientation.
The ‘green’ ELTIF category, which was requested by MEPs (see EUROPE 12975/15), will be subject to a revision clause. This sub-category of ELTIFs was to ensure alignment with the EU taxonomy and to meet disclosure obligations on the proportion of their assets that meet these requirements, to avoid ‘greenwashing’. The duration of this clause - 12, 18 or 24 months - still needs to be discussed at the technical level.
Once these technical aspects have been resolved, the agreement will have to be formally approved by Parliament and the EU Council. (Original version in French by Anne Damiani)