In evidence to the House of Lords European Union committee, the AIC says the proposed directive fails to take account of the benefits of the investment company structure, whilst also introducing unnecessary regulatory objectives, increased costs and a reduction in commercial flexibility for investment companies’. The AIC says this will push up costs for consumers.
It also warns against the potential ban on using non-EU suppliers which may have regional expertise.
AIC acting director general Ian Sayers: “Policymakers across Europe should stop and take stock of what they are trying to achieve and whether or not the current proposals will actually deliver their goals. In their current form these measures are deeply damaging for the investment company sector and those investors who support this vehicle’s unique governance arrangements.
“There may be a need for increased regulation for Alternative Investment Funds, but action should be targeted, effective and proportionate. Additional controls should be designed to fill the gaps where this will increase market confidence, financial stability and investor protection. In the case of investment companies this means recognising the role the board plays in protecting shareholder interests and using existing rules to secure proper regulatory coverage where possible”