Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-04-26-Speech-3-210"
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"en.20060426.16.3-210"2
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".
Mr President, the European investment fund industry is re-inventing itself: cross-border competition is taking root; fund managers and service companies are merging; distribution systems are opening up and new products are being offered to retail investors. Faced with this and with the prospect of profound change, does the UCITS Directive offer an adequate framework for the continued success of the European fund market? This, without a doubt, is a crucial question for policymakers.
How do we move on from here? We will give the fullest consideration to the views set out in Parliament’s report. We will critically analyse the forthcoming recommendations of industry expert groups on alternative investments and efficiency enhancements. We will continue to test different scenarios for UCITS revision from a cost-benefit perspective and we will reach a firm view on the types of improvement that are most urgently needed. This will be presented in a White Paper to be published in the autumn, accompanied by a comprehensive impact assessment. We will immediately set about translating these ideas into concrete initiatives.
The Commission believes that the UCITS Green Paper and the responses to it – including Parliament’s report – have underlined the importance of measured but effective action in this area. This debate and the follow-up actions have helped to clarify where further action at EU level will be most useful. We are now well poised to begin the task of translating these ideas into effective solutions.
Much lip-service has been paid to the need for a vibrant and dynamic asset management business to provide a secure and profitable home for long-term savings of European households. Now is the time to start translating these fine words into action.
The report of the Committee on Economic and Monetary Affairs is a very incisive and balanced assessment of the main challenges before us. It clearly identifies the challenges that need to be addressed.
The Commission subscribes to the vision that informs Parliament’s report, namely to build on the solid foundations laid down by the existing directive and not to jettison product harmonisation. This has served us well to date. We need to try to make it more relevant to context of modern financial markets. The work of the Commission and the Committee of European Securities Regulators on the clarification of ‘eligible assets’ is vital in this respect. A draft proposal for implementing legislation will soon be communicated to Parliament. This is serious and promising work. Let us give it a chance before reading the last rites to product harmonisation.
Beyond better implementation of existing rules, there will be a need to give those involved in the fund industry greater freedom of movement to enable them better to exploit commercial opportunities of the integrated fund market. The emphasis should be on concrete, sensible, targeted changes, based on close contact with the market and informed by a strong commitment to making markets work for the end investor.
Many important improvements can be introduced without taking an axe to the UCITS Directive. The report provides a very clear steer on the areas where change can be most beneficial: simplification of the notification procedure; measures to facilitate cross-border fund mergers and pooling. The onus will now be on the Commission to come forward with solutions. Where legislative adjustment is needed to give effect to new single market freedoms, these changes could incorporate the possibility for adoption of technical implementing measures.
Another theme that features strongly in the report is regulatory arbitrage between different families of investment products. We do not have the full picture yet. We need to recognise the existence of different institutions and risk features. However, we have to monitor carefully how different products are sold to retail investors.
This leads us to the disclosure area. I take note of the strong message from the European Parliament on the simplified prospectus for UCITS. We should not conclude that the experiment has failed and that we should move on. On the contrary, the fund market has become a more diverse and complicated place. There is an even greater need for effective and comparable risk and costs disclosures. We take to heart the strong message of the European Parliament on this issue. We will try to remedy the shortcomings of the simplified prospectus.
Outside the UCITS box, we are looking at some of the new asset classes: private equity and hedge funds. These are increasingly powerful players in European financial markets. They are driving change right across the investment fund industry as traditional fund managers learn from these techniques and strategies. We do not need an EU overlay to national regimes for the oversight of these industries. However, we need a sophisticated regulatory engagement with these important players. We need to understand the context in which they operate and whether there are useful improvements that can be made to help them to operate in the European environment."@en1
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