“From the start, Efama advocated for a targeted review of the AIFMD in order not to undermine a successful framework,” said Tanguy van de Werve, director general of the European Fund and Asset Management Association. “We are pleased to see that this has broadly been achieved, allowing the AIFMD and Ucits Directive to remain a robust regulatory framework with improved rules.” Photos: Shutterstock; provided by Efama. Montage: Maison Moderne

“From the start, Efama advocated for a targeted review of the AIFMD in order not to undermine a successful framework,” said Tanguy van de Werve, director general of the European Fund and Asset Management Association. “We are pleased to see that this has broadly been achieved, allowing the AIFMD and Ucits Directive to remain a robust regulatory framework with improved rules.” Photos: Shutterstock; provided by Efama. Montage: Maison Moderne

New rules that cover investment funds and alternative investment fund managers will help undertakings for collective investment in transferable securities (Ucits) and alternative investment funds (AIFs) remain competitive and attractive investment options, says industry group Efama.

Following a  and technical discussions centred on two EU directives--the Undertakings for collective investment in transferable securities (Ucits) directive and the Alternative Investment Funds Manager Directive (AIFMD)--the European Fund and Asset Management Association (Efama) is “pleased” that the European Commission and legislators have kept key elements of the two directives intact, as noted in a .

“From the start, Efama advocated for a targeted review of the AIFMD in order not to undermine a successful framework,” Efama director general Tanguy van de Werve said in a press release. “We are pleased to see that this has broadly been achieved, allowing the AIFMD and Ucits Directive to remain a robust regulatory framework with improved rules. This will help Ucits and AIFs to remain internationally competitive and attractive investment options.”

Positive aspects

For Efama, keeping the delegation framework under the two directives “largely unchanged” is good news. This means investors can benefit from wider access to investment opportunities and diversification. While new delegation reporting to national authorities may lead to duplication, increased transparency will also provide national supervisors with an overview of market practices, said the association.

EU countries will also need to provide asset managers with liquidity management tools, noted Efama, and asset managers will be able to decide when to activate (or deactivate) them.

In addition, the new AIFMD rules allow a depositary to be appointed in a country different from that of the fund. “While a full depositary passport across the EU was another option, we believe this would have weakened investor protection,” said Efama.

Points of concern

Efama had questions on a few areas, such as new, product-specific provisions for loan-originating funds or the inclusion of retention requirements, which can “impede risk management of the fund.”

The association also found that references to “undue costs” were not appropriate here, given that the AIFMD regulates management companies and is mostly relevant for professional investors, and that the European Securities and Markets Authority is preparing a report on this topic.

Ucits in Luxembourg

The total net assets of undertakings for collective investment, including UCIs subject to the 2010 Law, specialised investment funds and investment companies in risk capital (Sicars), , said Luxembourg’s financial sector supervisory commission, the CSSF.

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