Re­duc­ing bar­ri­ers to cross-bor­der fund dis­tri­bu­tion

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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