The Investment Management Association has slammed the pending Ucits IV package, claiming that the improvements are much less significant than initially thought.
Speaking at the Association of the Luxemburg 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 benefit 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. He also warned 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 said 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 on the global distribution opp-ortunities 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 such as 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 deny investors the opportunity to invest in the world’s fastest-growing economies in a risk diversified way through investment funds.”