Financial advisers to French investors could have an opportunity to increase sales and diversify the...
Financial advisers to French investors could have an opportunity to increase sales and diversify their product offering if new proposals to liberalise investment go through, write Dylan Emery and Joanne Frearson.
The new rules encourage personal investment by raising the limit on a popular type of equity saving scheme by one-third and allowing stocks based anywhere in the EU to be in the product.
Relaxation of restrictions surrounding the Plans d'Epargne en Actions (PEA) equity structure is part of a package of reforms from finance minister Laurent Fabius which includes tax breaks for some foreign workers and an easing of the 35-hour per week work limit for small companies.
If the proposals go through, PEAs will be able to contain non-French companies, but also companies that operate primarily in France but are domiciled elsewhere. Combined with an increase of the limit to Ffr600,000 per investor (around $78,000), it should help continue the success of PEAs, which have doubled in total assets in the space of three years.
The final draft of the new rules is yet to be decided but the proposals so far state, as from January 2002, it will be possible to invest 60% in non-French European direct equities and in January 2003 100%.
Philippe Nahum, general manager of Fidelity Investments France, said: 'This could be bad news for smaller companies who are not able to offer investments outside France and lack experience in the European markets.
'Gradually in France there will be a switch from French to European equities and there will be an increase in demand for fund managers with European equities experience.'
Smaller companies not being able to grasp the European markets may suffer.
But Patrick Petitjean, general manager of JP Morgan Fleming Asset Management France, said: 'The proposed legislation will mean more opportunities and diversity for the investor.'
In addition, the proposed legislation could have implications for the mutual fund industry. Although mutual funds have not yet been included in the proposed rules, it is possible they could come under the new legislation.
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