Enhancing the cross-border distribution of collective investment funds
New European regulatory proposals
The European Commission has published a draft Regulation and Directive on the cross-border distribution of investment funds. The aim is to establish a genuine internal capital market by addressing fragmentation and removing regulatory barriers (namely Member States’ marketing requirements, regulatory fees and notification and administrative requirements), which can all prevent the cross-border distribution of investment funds in the European Union.
Current regulatory status – overview
Investment funds are currently regulated by two main pieces of EU legislation; the Directive on Undertakings for Collective Investments in Transferable Securities (UCITS) and the Directive on Alternative Investment Fund Managers (AIFMD). The AIFMD regulates managers of alternative investment funds (AIFs).
The purpose of the Commission’s proposals are therefore to supplement and, where necessary, amend the UCITS Directive and AIFMD to eliminate current regulatory barriers to the cross-border distribution of investment funds in order to enable a better functioning European single market.