The Regulation on European long-term investment funds (ELTIF Regulation) was published in the Official Journal of the EU (OJ) on 19 May 2015. The Regulation is expected to come into force on 8 June 2015 and will apply from 9 December 2015.

ELTIFs are a type of regulated fund which aim to facilitate retail and institutional investment in long-term EU projects (in infrastructure and real estate, for example). They are part of the European Commission’s strategy – as outlined in its 2013 proposal – to create a single market in the EU for long-term investment funds, as well as to contribute to the financing of the European economy. Broadly, the ELTIF Regulation outlines the rules on the authorisation, investment policies, and operating conditions of EU alternative investment funds that are marketed as ELTIFs.


The European Securities and Markets Authority (ESMA) has published an opinion calling for modification of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive. The changes would take into account the clearing obligations for certain types of over-the-counter (OTC) financial derivative transactions under the European Market Infrastructure Regulation (EMIR).

Currently, the UCITS Directive allows investments in both exchange-traded derivatives (ETDs) and OTC derivatives, however only OTC derivatives are subject to counterparty risk- exposure limits. Additionally, certain OTC derivatives are required to be centrally cleared under EMIR. ESMA believes that the UCITS Directive should be amended to take into account the clearing obligation for certain OTC derivatives under EMIR, and that the UCITS Directive should no longer distinguish between OTC derivative transactions and ETDs. Instead, the distinction should be between cleared and non-cleared OTC financial derivative transactions.


The European Securities and Markets Authority (ESMA) and the Eurosystem (the national central banks of the Member States of the Eurozone, and the European Central Bank) have responded to the European Commission’s green paper on capital markets union (CMU).

The CMU is a flagship initiative of the European Commission launched to address concerns of underdevelopment of capital market-based financing in Europe and excessive reliance by businesses on bank borrowing. The green paper aims to generate short and long-term ideas on how to improve access to the capital markets for businesses and improve the efficiency of the markets generally.

In its response, the Eurosystem proposes introducing a single rulebook for capital markets (to ensure pan-EU regulatory consistency), and the appointment of a single capital markets supervisor. Additionally, where there are issues where political agreement cannot be reached at an EU level, the Eurosystem suggests that a “vanguard group” of Member States should be allowed to proceed on the basis of enhanced co-operation.

ESMA’s response sets out how its main objectives of enhancing investor protection and promoting stable and orderly financial markets can contribute to CMU. ESMA proposes harmonising national accounting standards as a method of increasing the availability and standardisation of credit information for small

and medium-sized enterprises, which is a goal of the CMU. Reflecting on ways of increasing cross-border participation in the undertakings of collective investment transferable securities (UCITS), ESMA proposes making the national competent authority of the home Member State of a UCITS responsible for transmitting updates of the documents provided by the UCITS.