Activities of Philippe DE BACKER related to 2013/0214(COD)
Plenary speeches (2)
European long-term investment funds (debate)
European long-term investment funds (debate)
Shadow reports (2)
SUPPLEMENTARY REPORT on the proposal for a regulation of the European Parliament and of the Council on European Long-term Investment Funds PDF (719 KB) DOC (192 KB)
REPORT on the proposal for a regulation of the European Parliament and of the Council on European Long-term Investment Funds PDF (403 KB) DOC (224 KB)
Amendments (45)
Amendment 66 #
Proposal for a regulation
Recital 4
Recital 4
(4) While individualGiven that investors may be interested in investing in an ELTIF, and the illiquid nature of most investments in long-term projects precludes an ELTIF from offering regulafact that investors should be given the right incentives to invest in them, an ELTIF should be able to offer redemption rights to its investors. The commitment of the individual investor to an investment in such assets is by its nature made to the full term of theELTIF manager should be given the discretion to decide whether to establish ELTIFs with or without redemption rights according to the underlying investor base and the ELTIFs' investment strategy. ELTIFs should, consequently, be structured so as not to offer, where applicable under the redemption policy regime, regular redemptions before the end of life of the ELTIF. The rules or instruments of incorporation of ELTIF shall disclose the redemption rights policy and its main features. A report, three years after the adoption of this Regulation, shall investigate whether this rule will have achieved the expected results in terms of ELTIF distribution or whether the introduction, in a limited number of cases, of the possibility, for some individual retail investors, to redeem their units or shares before the end of the ELTIF, may contribute to increase the distribution of ELTIF among the individual retail investors.
Amendment 74 #
Proposal for a regulation
Recital 5
Recital 5
(5) Long-term asset classes within the meaning of this Regulation should comprise non-listed undertakings that issue equity or debt instruments for which there is no readily identifiable buyer. They should also comprise listed undertakings of a maximum capitalization of 1 billion EUR. This Regulation should also covers real assets that require significant up-front capital expenditure.
Amendment 82 #
Proposal for a regulation
Recital 15
Recital 15
(15) In order to ensure that ELTIFs target long-term investments, rules on the portfolio of ELTIFs should require a clear identification of the categories of assets that should be eligible for investment by ELTIFs and of the conditions under which they should be eligible. An ELTIF should invest at least 70% of its capital in eligible investment assets. To ensure the integrity of ELTIFs it is also desirable to prohibit an ELTIF from engaging in certain financial transactions that might endanger its investment strategy and objectives by raising additional risks different to those that might be expected for a fund targeting long-term investments. In order to ensure a clear focus on long term investments, as may be useful for retail investors unfamiliar with less conventional investment strategies, an ELTIF should not be allowed to invest in financial derivative instruments other than for the purpose of hedging the duration and currency risk of the other asserisks inherent to its own investments. Given the liquid nature of commodities and financial derivative instruments that give an indirect exposure to them, investments in commodities do not require a long-term investor commitment and therefore should be excluded. This rationale does not apply to investments in infrastructure or companies related to commodities or whose performance is linked indirectly to the performance of commodities, such as farms in the case of agricultural commodities or power plants in the case of energy commodities. Moreover, in the case of loans granted by the ELTIFs and which are eligible assets, it should be clear that they are not considered as loans under the CRD/CRR definitions.
Amendment 87 #
Proposal for a regulation
Recital 16
Recital 16
(16) The definition of what constitutes a long-term investment is broad. Without necessarily requiring long-term holding periods for the ELTIF manager, eligible investment assets are generally illiquid, require commitments for a certain period of time, and have an economic profile of a long-term nature. Eligible investment assets are non-transferable securities and therefore do not have access to the liquidity of secondary markets. They often require fixed term commitments which restrict their marketability. The economic cycle of the investment sought by ELTIFs is essentially of a long-term nature due to the high capital commitments and the length of time required to produce returns. As a result such assets do not suit investments with redemption rights.
Amendment 97 #
Proposal for a regulation
Recital 22
Recital 22
(22) In order to provide investors with the assurance that ELTIFs contribute directly to the development of long-term investments, ELTIFs should be limited to investments in undertakings that have not been listed or listed entities with a maximum capitalization of 1 billion EUR. Therefore qualifying portfolio undertakings should not be listed on regulated markets. Qualifying portfolio undertakings include infrastructure projects, investment in unlisted companies seeking growth and investments in real estate or other real assets that could be suitable for long term investment purposes.
Amendment 100 #
Proposal for a regulation
Recital 24
Recital 24
(24) Unlisted undertakings and listed with a maximum capitalisation of 1 billion EUR can face difficulties accessing capital markets and financing further growth and expansion. Private financing through equity stakes or loans are typical ways of raising financing. Because such instruments are by their nature long-term investments they require patient capital that ELTIFs can provide.
Amendment 106 #
Proposal for a regulation
Recital 26
Recital 26
(26) Where the manager holds a stake in a portfolio undertaking, there is a risk that the manager puts its interests ahead of the interests of investors in the fund. To avoid such conflict of interests, the ELTIF should only invest in assets that are unrelated to the manager, unless they invest in units of shares of assets managed by the ELTIF manager that are eligible under this regulation.
Amendment 115 #
Proposal for a regulation
Recital 32
Recital 32
(32) Notwithstanding the fact that ELTIFs do not offer redemption rights before the end of life of the ELTIF, nothing should prevent an ELTIF from seeking admission of these shares or units to a regulated market as defined in Article 4(14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments,10 to a multilateral trading facility as defined in Article 4(15) of Directive 2004/39/EC, or to an organised trading facility as defined in point (…...) of Regulation (…...), thus providing investors with an opportunity to sell their units or shares before the end of life of the ELTIF. The rules or instruments of incorporation of an ELTIF should therefore not prevent units or shares from being admitted to or from being dealt in regulated markets, nor should they prevent investors from freely transferring their shares or units to third parties who wish to purchase those shares or units. __________________ 10However, it should be noted that, according to experiences in national markets to date, trading in secondary markets may work in some markets but in others this option may entail high premiums or important discounts on the units or shares of ELTIFs that are admitted to or dealt on regulated markets, which would prevent, in practice, investors from using this alternative. Therefore, this option is not sufficient to substitute for the option of more regular redemptions. __________________ 10 OJ L 145, 30.4.2004, p.1. OJ L 145, 30.4.2004, p.1.
Amendment 127 #
Proposal for a regulation
Article 2 – paragraph 1 – point 6 a (new)
Article 2 – paragraph 1 – point 6 a (new)
(6a) "Semi-professional investor" means any investor who (a) commits to investing a minimum of EUR 100 000 and (b) states in writing, in a separate document from the contract to be concluded for the commitment to invest, that they are aware of the risks associated with the envisaged commitment or investment;
Amendment 129 #
Proposal for a regulation
Article 2 – paragraph 1 – point 6 b (new)
Article 2 – paragraph 1 – point 6 b (new)
(6b) "Professional ELTIF" means an ELTIF eligible to be marketed only to professional and semi-professional investors;
Amendment 130 #
Proposal for a regulation
Article 2 – paragraph 1 – point 6 c (new)
Article 2 – paragraph 1 – point 6 c (new)
(6c) "Retail ELTIF" means an ELTIF whose investors include retail investors;
Amendment 155 #
Proposal for a regulation
Article 8 – paragraph 2 – point c
Article 8 – paragraph 2 – point c
(c) entering into securities lending agreements, securities borrowing agreements, and repurchase agreements or any othesimilar agreement that would encumber the assets of the ELTIFs;
Amendment 156 #
Proposal for a regulation
Article 8 – paragraph 2 – point d
Article 8 – paragraph 2 – point d
(d) using financial derivative instruments, except where the underlying instrument consists of interest rates or currencies and it solely serves the purpose of hedging the duration and exchange risks inherent to other investments of the ELTIF.
Amendment 166 #
Proposal for a regulation
Article 9 – paragraph 1 – point c
Article 9 – paragraph 1 – point c
(c) loans granted by the ELTIF to a qualifying portfolio undertaking, in line with assets that qualify as an ELTIF;
Amendment 171 #
Proposal for a regulation
Article 9 – paragraph 1 – point e
Article 9 – paragraph 1 – point e
(e) direct holdings or indirect holdings through a qualified portfolio undertaking of individual real assets that require up- front capital expenditure of at least EUR 10 million or its equivalent in the currency, and at the time, in which the expenditure is incurred.
Amendment 177 #
Proposal for a regulation
Article 10 – paragraph 1 – point b a (new)
Article 10 – paragraph 1 – point b a (new)
(ba) It is admitted to trading as foreseen in point (b) and have a market capitalization of no more than 1 billion euro.
Amendment 182 #
Proposal for a regulation
Article 10 – paragraph 2
Article 10 – paragraph 2
2. By way of derogation from paragraph 1(a) of this Article, a qualifying portfolio undertaking may be a financial undertaking or a collective investment undertaking that exclusively finances qualifying portfolio undertakings referred to in paragraph 1 of this Article or real assets referred to in Article 9.
Amendment 190 #
Proposal for a regulation
Article 12 – paragraph 1 a (new)
Article 12 – paragraph 1 a (new)
1 a. In the case that the rules or instruments of incorporation of ELTIF foresee regular redemption rights, the ELTIF shall maintain at the predefined redemption periods a liquidity reserve taking into account the requirements and conditions for exercise of the redemption rights, commensurate with the management of liquidity for the exercise of redemption rights. ESMA shall develop regulatory technical standards to further specify the structure of the liquidity reserves.
Amendment 207 #
Proposal for a regulation
Article 12 – paragraph 6 a (new)
Article 12 – paragraph 6 a (new)
6a. The rules or instruments of incorporation of a professional ELTIF may foresee non-application of one or several provisions of paragraphs 2 to 5.
Amendment 208 #
Proposal for a regulation
Article 12 a (new)
Article 12 a (new)
Article 12 a In circumstance where the ELTIF breaches the diversification requirements as stipulated in Article 12 and the contravention is beyond the control of the ELTIF manager, competent authorities shall provide an appropriate period for the manager to take such measures as are necessary to rectify the position.
Amendment 217 #
Proposal for a regulation
Article 15 – paragraph 2 a (new)
Article 15 – paragraph 2 a (new)
2a. When the ELTIF is structured with a capital drawdown mechanism, where proceeds can be drawn down from investors in a number of instalments over time, the limits and restrictions detailed in this Chapter II shall be determined based on the aggregate commitments made to the ELTIF by investors rather than the ELTIF's current net asset value.
Amendment 219 #
Proposal for a regulation
Article 16 – paragraph 1 – subparagraph 1
Article 16 – paragraph 1 – subparagraph 1
Investors shall not be able to ask for redemption of their units or shares before the end of life of the ELTIF. R if this is foreseen in the rules or instruments of incorporation of the ELTIF and according to the particular requirements disclosed in them. If no redemption rights are foreseen in the rules or instruments of incorporation of the ELTIF, redemption to investors shall be possible as of the day following the date defining the end of life of the ELTIF.
Amendment 222 #
Proposal for a regulation
Article 16 – paragraph 1 – subparagraph 1 a (new)
Article 16 – paragraph 1 – subparagraph 1 a (new)
The rules or instruments of incorporation of the ELTIF shall disclose all the requirements and conditions for the exercise of the redemption rights such as possible initial lock-up period, notification requirements, notification periods, the frequency of the exercise of the redemption rights, the methods of the evaluation of ELTIF units, possibility for restrictions as to the amount of withdrawals from the fund.
Amendment 223 #
Proposal for a regulation
Article 16 – paragraph 1 – subparagraph 1 b (new)
Article 16 – paragraph 1 – subparagraph 1 b (new)
ESMA shall develop draft regulatory technical standards to further specify the conditions and requirements of the redemption policy structures of ELTIFs, to achieve clarity and consistency across the EU.
Amendment 225 #
Proposal for a regulation
Article 16 – paragraph 1 – subparagraph 2
Article 16 – paragraph 1 – subparagraph 2
The end of life of the ELTIF shall be clearlELTIF rules or instruments of incorporation and disclosed to investors may indicated as a specific date in the ELTIF rules or instruments of incorporation and discloas the end of life of the ELTIF as well as the right for early intervention or temporary extension of the life of the ELTIF and the conditions to exercised to investorshis right. In the case that no specific date is indicated as the end of life of the ELTIF, the ELTIF life shall be non-limited.
Amendment 227 #
Proposal for a regulation
Article 16 – paragraph 1 – subparagraph 3
Article 16 – paragraph 1 – subparagraph 3
The ELTIF rules or instruments of incorporation and disclosures to investors shall lay down the procedures for redemption and disposal of assets and state clearly that redemption to investors shall commence on the day following the date defining the end of life of the ELTIF.
Amendment 233 #
Proposal for a regulation
Article 16 – paragraph 2
Article 16 – paragraph 2
2. The life of the ELTIF shall be sufficient in length to coverIn selecting investments, the ELTIF shall take account of the life- cycle of each of the individual assets of the ELTIF,s of the relevant assets measured according to the illiquidity profile and economic life-cycle of the asset, and the stated investment objective of the ELTIF.
Amendment 239 #
Proposal for a regulation
Article 19 – paragraph 2 – introductory part
Article 19 – paragraph 2 – introductory part
2. The schedule referred to in paragraph 1 shall be at least annually reviewed and shall include:
Amendment 240 #
Proposal for a regulation
Article 20 – title
Article 20 – title
Distribution of incomeproceeds
Amendment 241 #
Proposal for a regulation
Article 20 – paragraph 1 – introductory part
Article 20 – paragraph 1 – introductory part
1. An ELTIF may regularly distribute to investors the incomeproceeds generated by the assets contained in the portfolio. This incomeproceeds shall be composed of:
Amendment 242 #
Proposal for a regulation
Article 20 – paragraph 1 – point a
Article 20 – paragraph 1 – point a
(a) any incomeproceeds that the assets are regularly producing;
Amendment 245 #
Proposal for a regulation
Article 20 – paragraph 1 – point b
Article 20 – paragraph 1 – point b
(b) the capital appreciation realized after the disposal of an asset, but excluding the original capital commitments made.
Amendment 247 #
Proposal for a regulation
Article 20 – paragraph 2
Article 20 – paragraph 2
2. The incomeproceeds shall not be distributed to the extent that it is required for future commitments of the ELTIF.
Amendment 251 #
Proposal for a regulation
Article 21 – paragraph 4 – subparagraph 2 – point b
Article 21 – paragraph 4 – subparagraph 2 – point b
(b) inform investors about the end of life of the ELTIFwhere applicable according to Article 16, paragraph 1 inform investors about the end of life of the ELTIF and any right of temporary expansion or any right of intervention of the life of the ELTIF and the specific conditions foreseen;
Amendment 255 #
Proposal for a regulation
Article 21 – paragraph 4 – subparagraph 2 – point d
Article 21 – paragraph 4 – subparagraph 2 – point d
(d) state that investors shall have no right to redeem their investment until the end of the lifee rights of investors to redeem their investment according to the rules or instruments of incorporation of the ELTIF;
Amendment 257 #
Proposal for a regulation
Article 21 – paragraph 4 – subparagraph 2 – point f a (new)
Article 21 – paragraph 4 – subparagraph 2 – point f a (new)
(fa) In the case of a professional ELTIF state any deviation from the provisions of Article 12 on portfolio composition
Amendment 260 #
Proposal for a regulation
Article 21 – paragraph 4 a (new)
Article 21 – paragraph 4 a (new)
4a. The prospectus for professional ELTIFs shall contain the information required under article 23 of the directive 2011/61/EU of the European Parliament and the Council
Amendment 263 #
Proposal for a regulation
Article 22 – paragraph 1 – point e
Article 22 – paragraph 1 – point e
(e) other costs, including administrative, regulatory, custodial,depositary, custodial, professional service and audit costs.
Amendment 265 #
Proposal for a regulation
Article 23 – paragraph 1
Article 23 – paragraph 1
1. TIn the case that the rules or instruments of incorporation of an ELTIF foresee redemption rights, the manager of anthe ELTIF shall, in each Member State where it intends to market units or shares of that ELTIF, put in place facilities available for making subscriptions, making payments to unit- or shareholders, repurchasing or redeeming units or shares and making available the information which the ELTIF and its managers are required to provide.
Amendment 267 #
Proposal for a regulation
Article 23 – paragraph 2 a (new)
Article 23 – paragraph 2 a (new)
2a. For professional ELTIFs, the provision of paragraph 1 of this article shall not apply
Amendment 269 #
Proposal for a regulation
Article 24 – paragraph 1 – point g
Article 24 – paragraph 1 – point g
(g) the ELTIF is notmay be structured as a partnership if this does not require additional commitments for the investor apart from the original capital commitment;
Amendment 271 #
Proposal for a regulation
Article 24 – paragraph 1 – point h
Article 24 – paragraph 1 – point h
(h) retail investors may, during the subscription period and at least two weeks after subscription of units or shares of the ELTIF, cancel their subscription and have the money returned without penalty.
Amendment 287 #
Proposal for a regulation
Article 30 – paragraph 1 – introductory part
Article 30 – paragraph 1 – introductory part
Amendment 290 #
Proposal for a regulation
Article 30 – paragraph 1 – point a
Article 30 – paragraph 1 – point a
(a) the impact of the provision in Article 16(1) that excludes investors from redeeming their units or shares before the end of life of the ELTIF. The review, taking into account ELTIF's distribution to different investor categories, shall also assess whether exempting a limited number of individual retail investors from such a rule would have the effect of increasing demand for ELTIF amongst retail investors;
Amendment 293 #
Proposal for a regulation
Article 30 – paragraph 1 – point b
Article 30 – paragraph 1 – point b
(b) the impact on asset diversification of the application of the minimum threshold of 70% of eligible investment assets laid down in Article 12(1), in particular to assess whether increased measures on liquidity would be necessary should a limited number of individual retail investors be exempted from the prohibition on redeeming their units before the end of life of the ELTIF;