EU Commissioner Charlie McCreevy has promised to "press on" with the implementation of the white paper on enhancing the single market framework for investment funds.
Speaking at the Scottish Financial Enterprise industry lunch, McCreevy recognises the process in Brussels moves at “glacial speed”, but he says the European Commission will be “pulling out all the stops” in implementing the white paper on reforming UCITS legislation, which was published last week.
He states: “We will press on with the preparation of legislative amendments and related work. This will be done in an open way so that industry, member states and all stakeholders have an opportunity to comment on our evolving proposals.”
McCreevy says the reforms have two aims: improving economic efficiency of the fund business and strengthening investor protection and transparency.
The commission has targeted six areas to improve the existing framework:
- It will simplify procedures for passporting UCITS funds;
- It will create appropriate legal and regulatory conditions for fund mergers;
- It will pave the way for master-feeder funds and other forms of entity-pooling by changing diversification rules;
- It will propose allowing managers to manage corporate and contractual funds in other member states;
- It will reconfigure and simplify the Simplified Prospectus; and
- It will strengthen supervisory cooperation.
McCreevy adds: “It is an open secret that I do not have much faith in the ability of regulation to solve market problems. I am always concerned that well-intentioned EU legislative proposals can be denatured or diluted so the cure becomes worse than the disease. However, in the present case, I believe that legislative action is needed to strengthen the existing framework.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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