Reducing barriers to cross-border fund distribution
FECIF, the leading European trade association for independent financial advisors and financial intermediaries, believes that the European Commission’s effort to create a Capital Markets Union (CMU) within the EU must be backed and supported by all parties involved in the financial services sector.
The European Federation of Financial Intermediaries and Financial Advisers (FECIF) feels, however, that whilst many barriers have been removed by recent or forthcoming Regulation and Directives (for instance, EMIR, CSDR and MiFID II), significant steps must still be taken for the creation of a truly unified capital markets industry. barriers, which have proven to prohibit and limit the cross-border distribution of funds for instance,” he explained.
FECIF made its views known on these shortcomings in its recent submission to the EU’s Inception Impact Assessment Initiative in relation to “Reducing barriers to cross-border distribution of investment funds”. definitions which were allowed within the wording of the AIFMD”.
FECIF is adamant that future developments must be directed towards the creation of a CMU where all parties involved are clearly defined, with roles and responsibilities adequately, evenly and realistically allocated and barriers that prevent and/or have a material impact on the cross-border distribution of funds, or financial services in general, are reduced or abolished. need to adhere to different rules and procedures? Does this lack of legal certainty translate to lack of trust between the regulatory authorities of those states?” FECIF’s specific recommendations are: 1. The creation of a common/uniform interpretation of terms – a standardised glossary is a necessity.
2. The removal of the necessity to inform individual countries of marketing activity – except where funds or products are structured solely on national legislation. Meeting regulatory promotional requirements in one EU country should automatically mean meeting them in any others, where EU criteria have been met.
3. The abolition of the need for manufacturers to take responsibility for distribution when dealing through regulated intermediaries.
4. The elimination of legal requirements in some countries that require the involvement of local agents.
5. The establishment of a uniform agreement across the EU on what constitutes a “well informed, certified, experienced or sophisticated investor” to fit between retail and professional categories. This should include uniform offering document requirements and investor safeguards and abolish local restrictions on the distribution to such a class.