IMA highlights concerns on Ucits IV and AIFM directives
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The Investment Management Association has slammed the pending Ucits IV package, claiming the improvements are much smaller than initially thought.
Speaking at the Association of the Luxembourg Fund Industry roadshow, IMA director of international relations Jarkko Syyrila said the last five years of asset management regulation had been about perfecting the single market to the benefit of the industry and investors.
But Syyrila said the efficiency improvements are much smaller then expected and have resulted in overly detailed and burdensome rules and uncertainties on how the new rules interplay with member states' tax legislation.
Syyrila also warns that the Alternative Investment Fund Managers Directive will affect more than just hedge fund and private equity firms, pointing to the likelihood of it burdening the operations of all non-Ucits fund managers.
Syyrila says the European Parliament’s Econ Committee is to take an approach that will “significantly damage pension savings of all Europeans.”
He said: “European professional investors will only be able to invest in those third country funds whose manager and its regulator sign to apply the rules of the Directive. It is questionable whether any third country will want to or be able to sign up to these overly burdensome rules. Therefore European professional investors will no more be able to search from among best of breed products globally.
"How will our international trading partners react to this closing of the doors of Europe and will it lead to retaliation? The risks are evident and a big question is how will this impact the global distribution opportunities of European funds, including Ucits?"
Syyrila said these concerns could impact on Ucits V, which is scheduled in Commissioner Barnier’s working programme in 2011 and is set to tackle issues like depository liability.
He said: “We all agree clarifications to depositories' tasks are welcome, but imposing a strict liability on Ucits would be end of the road for many emerging market Ucits and would deny European retail investors the opportunity to invest in the world's fastest growing economies in a risk diversified way, through investment funds."
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