New European Commission rules on the cross-border distribution of funds are not the most appropriate means to address existing hurdles, according to the European Fund and Asset Management Association (EFAMA).
Although EFAMA said it welcomes the initiative to facilitate cross-border distribution of investment funds in Europe, the organisation said it “does not believe that adding further regulatory requirements via a legislative review at this stage is the most appropriate means to address existing hurdles”.
EFAMA states that though this could help seek further ways to deepen the Single Market for investment funds, “there is significant room for improvement and further efforts need to be made in order to tackle remaining barriers for the cross-border distribution of investment funds”.
Instead of adding new rules to the existing complex structure, EFAMA suggested that the main priority should be to further consolidate and clarify the existing rules and processes.
EFAMA said it looks forward to continuing discussions during the legislative phase.
Peter De Proft, EFAMA director general, said: “The main barriers to the cross-border distribution of funds, as identified by asset managers and investors, are the lack of clarity and transparency of existing rules, along with additional layers of regulatory requirements imposed at a national level.”
He added: “[Today’s] proposal, unfortunately, adds yet a new layer of rules. EFAMA would strongly support practical solutions at the level of European Securities and Markets Authority.”
“These will enhance supervisory convergence and legal certainty on the basis of a common understanding among national regulators and can be developed and implemented within a much shorter period of time than a legislative proposal.”
