Newly agreed AIFMD & UCITS rules will improve the EU funds market

EFAMA congratulates the EC and co-legislators for maintaining the key elements of both directives during the review of AIFMD and UCITSD. The preservation of the delegation framework is seen as positive, offering investors broader access to investment opportunities and diversification.
While the new rules introduce some reporting duplication for delegation to national authorities, it is expected to enhance transparency and provide supervisors with a comprehensive overview of market practices. The frameworks mandate EU countries to offer asset managers a range of liquidity management tools, allowing them to choose at least two based on their business model. National authorities can intervene in fund suspension only in limited circumstances and after consulting the fund manager.
Additionally, the AIFMD rules now permit the appointment of a depositary in a different country under specific circumstances, avoiding a full depositary passport across the EU to maintain investor protection. However, there are concerns about certain aspects, such as provisions for loan-originating funds being product-specific under the AIFMD and the inclusion of retention requirements. These are viewed as potentially hindering risk management.
EFAMA questions references to “undue costs“ in the AIFMD, emphasizing its relevance to a professional investor base and the ongoing work of ESMA on a comprehensive report covering both AIFs and UCITS. EFAMA expresses satisfaction with the targeted review, stating that it allows both AIFMD and UCITS to remain robust regulatory frameworks, supporting their international competitiveness and attractiveness as investment options.