European Commissioner Jonathan Hill has delivered a speech at a public hearing on the “‘Call for Evidence’ – a review of the EU regulatory framework for financial services” which could herald good news for fund managers.
Recognizing that fund managers need a period of legislative calm after the implementation of the AIFMD and changes to the UCITS framework, Commissioner Hill promised “a targeted approach“; and “a range of steps that will support the asset management sector to play its role in channelling finance to Europe’s economy and businesses“.
- “Asset managers … said they’re being asked to report the same data in different forms to comply with seperate peieces of legilsation. So I want too look at whether their reporting burden could be lowered without affecting the quality of what’s reported“;
- “Smaller fund managers tell us they still struggle to offer their products in different countries. That gold plating by national supervisors, additional fees, and different requirements for marketing material too often get in the way. Where those barriers exist, we have to knock them down. So we’ll launch a consultation [in May 2016] to identify the main barriers to funds operating in other countries. We’ll use this evidence to improve passporting and build a system where investors have more choice and lower charges, and … funds can genuinely compete across borders“; and
- “We’re also working on ideas to strengthen venture capital markets. We’ll begin this year by amending exiting legislation governing venture capital funds to build up scale, diversity and choice. We’ll also look at how we can use public money to attract private investment with a pan-European venture capital fund of funds“.
Unfortunately, it’s not always clear whether Commissioner Hill is talking about (eg) third-country or intra-EU passporting, UCITS funds, and/or alternative investment funds … although intra-EU passporting is perhaps more likely than not, in most cases.
Commissioner Hill’s third comment seems to suggest that the €500m assets under management (AUM) cap is about to be lifted so that European VC Fund Managers with more than €500m assets under management can register a European VC Fund under the European Venture Capital Funds Regulation and then market it across the EEA, without having to comply with the whole of the AIFMD. This might also suggest that the €100m and €500m AUM caps, which restrict access to the “AIFMD light” regime for smaller EU and non-EU fund managers will be raised too. And each of these things might be no more than part of the Commission’s response to the feedback it received on its “Consultation Document – Review of the European Venture Capital Funds (EUVECA) and European Social Entrepreneurship funds (EUSEF) Regulations” (available here). Fingers crossed. We’ll see.