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Asset Management framework

Context

Asset management has a key role to play in the further development of capital markets in particular for retail investors and the provision of sustainable investment options.

A strong growth of the EU investment fund sector has been observed since the 2008 financial crisis building on a strong legislative framework (UCITS and AIFMD). However improvements are needed in terms of competitiveness and integration with EU fund markets that remain fragmented along national lines and low average fund sizes. In addition, although the sector has demonstrated resilience during the Covid crisis, liquidity risks remain a concern for certain fund categories such as MMFs and those highly exposed to corporate debt and real estate assets.

Policy measures have been adopted for improving the cross-border distribution of funds and marketing communication requirements. A review of the AIFMD launched in October 2020 is also examining different areas where improvement may be needed including:

investor access, depositary rules, delegation rules, the treatment of third-country AIFs and the consistency between UCITS and AIFM rules. The ELTIF framework is also being examined in the context of the CMU action plan with the aim of removing the demand and supply obstacles that are hindering the development of these funds. Many market stakeholders are also in favour of developing EU level ESG standards for funds.

Concerning financial stability, measures have been proposed at the global level by the FSB and IOSCO for improving the assessment and the mitigation of liquidity and leverage risks posed by investment funds. Recommendations have also been made in the EU by the ESRB for enhancing the supervision of funds exposed to significant liquidity risks and expanding the use of liquidity management tools and stress testing. Reviewing MMF rules and improving the macro-prudential toolkit for fund activities has also been proposed by some regulators.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Public and private
sector views

Public authority views

U. Bassi - DG for Financial Stability, Financial Services and Capital Markets Union, European Commission - Asset Management: a year of review - April 2021 new

N. Cazenave - Autorité des Marchés Financiers (AMF) - Revamp ELTIF to direct more long-term financing towards European companies? - April 2021 new

G. Figueiredo Dias - Portuguese Securities Market Commission (CMVM) - ELTIF and AIFMD reviews: the challenge to meet investors’ needs - April 2021 new

V. Ross - European Securities and Markets Authority (ESMA) - Enhancing the AIFMD framework in the forthcoming review - April 2021 new

L. Van Burik - Commission de Surveillance du Secteur Financier (CSSF) - Delegation rules under the AIFMD: Need for clarification, adjustment or complete revamp based on the supervisory experience of national regulators? - April 2021 new

U. Bassi - European Commission - The role of the EU Asset Management regulation in the post- Covid recovery - September 2020

G. Cross - Central Bank of Ireland - Strong regulatory frameworks are the foundation of effective capital markets - September 2020

M. Zwick - Commission de Surveillance du Secteur Financier (CSSF) - Contribution of Asset Management to the post- Covid-19 economic recovery - September 2020

V. Ross - European Securities and Markets Authority (ESMA) - ESMA’s priorities for asset management in a changing world - April 2020

J-P. Servais - Financial Services and Markets Authority, Belgium (FSMA) - Asset management regulation challenged by climate change and digital developments - April 2020