Activities of Paul TANG related to 2021/0377(COD)
Plenary speeches (1)
Amendments to the European Long-Term Investment Funds (ELTIFs) Regulation (debate)
Amendments (21)
Amendment 82 #
Proposal for a regulation
Recital 7
Recital 7
(7) Investments in commercial property, in facilities or installations for education, research, sports or development, or in housing, including in senior residents or social housing, should also be deemed to be eligible assets due to the capacity of such assets to contribute to the objectives of smart, sustainable and inclusive growth. To enable real investment strategies in areas where direct investments in real assets are not possible or uneconomical, eligible investments in real assets should also comprise investments in water rights, forest rights, building rights and mineral rights. Eligible investment assets should exclude speculative investment assets, such as art, manuscripts, jewellery or other similar types of investment assets, which do not represent long-term investments in the Union's real economy.
Amendment 85 #
Proposal for a regulation
Recital 9
Recital 9
Amendment 89 #
Proposal for a regulation
Recital 9 a (new)
Recital 9 a (new)
(9 a) The objective of Regulation (EU) 2015/760 is to channel capital towards long-term investments in the Union's real economy. To ensure that ELTIFs channel capital flows towards projects that put the Union economy on a path towards smart, sustainable and inclusive growth, an ELTIF should be required to invest at least 37% of its investments in environmentally sustainable economic activities in accordance with Regulations (EU) 2020/852 and 2019/2088.
Amendment 90 #
Proposal for a regulation
Recital 9 a (new)
Recital 9 a (new)
(9 a) ELTIFs are intended to promote long-term economic growth in the Union and as such sustainability considerations are at their heart. ELTIFs thus either promote, among other characteristics, environmental or social characteristics or have sustainable investment as their objective. Therefore, ELTIFs should be subject to the requirements of either Article 8 or 9 of Regulation (EU) 2019/2088.
Amendment 91 #
Proposal for a regulation
Recital 9 b (new)
Recital 9 b (new)
(9 b) In order to encourage the redirection of private capital flows towards more environmentally sustainable investments, it is necessary to extend the scope of eligible assets so that ELTIFs are also able to invest in green bonds to be issued under the prospective regulation based on the Commission proposal on European green bonds (COM(2021)0391) and in financial products that have sustainable investments as their objective, in accordance with Article 9 of Regulation (EU) 2019/2088.
Amendment 97 #
Proposal for a regulation
Recital 10 a (new)
Recital 10 a (new)
(10 a) To ensure alignment with other Union legislative acts that promote long- term sustainable investments and equitable economic development, including Regulation (EU) 2020/852, ELTIFs should have measures in place to protect social rights and minimum social safeguards.
Amendment 105 #
Proposal for a regulation
Recital 13
Recital 13
(13) Due to concerns that fund-of-funds strategies can give rise to investments that would not fall within the scope of eligible investment assets, Regulation (EU) 2015/760 currently contains restrictions on investments in other funds throughout the ELTIF’s life. Fund-of-fund strategies are, however, a common and very effective way of obtaining rapid exposure to illiquid assets, in particular in respect of real estate and in the context of fully paid-in capital structures. It is therefore necessary to give ELTIFs the possibility to invest in other funds, because that would enable ELTIFs to ensure a faster deployment of capital. Facilitating fund-of-fund investments by ELTIFs would also allow reinvestment of excess cash into funds as different investments with distinct maturities may lower the cash drag of the ELTIF. It is therefore necessary to expand the eligibility of funds-of-funds strategies for ELTIF managers beyond investments in European venture capital funds (EuVECAs) or European social entrepreneurship funds (EuSEFs). The scope of collective investment undertakings in which ELTIFs can invest should thus be broadened to undertakings for collective investment in transferable securities (UCITS) and to EU alternative investment funds (EU AIFs) managed by EU AIF managers. However, in order to ensure effective investor protection, it is also necessary to set out that where an ELTIF invests in other ELTIFs, in European venture capital funds (EuVECAs), in European social entrepreneurship funds (EuSEFs), in UCITS and EU AIFs managed by EU AIFMs, those collective investment undertakings should also invest in eligible investments and have not themselves invested more than 10 % of their capital in any other collective investment undertaking. While facilitating fund-of- fund investments by ELTIFs could provide potential investors with higher levels of diversification and lower volatility, it is important to ensure that such strategies do not lead to an excessive layering of fees for retail investors investing in fund-of-fund strategies.
Amendment 114 #
Proposal for a regulation
Recital 18
Recital 18
(18) Article 30 of Regulation (EU) 2015/760 also requires ELTIF managers or distributors to provide appropriate investment advice when marketing ELTIFs to retail investors. The lack of precision in what constitutes appropriate investment advice in Regulation (EU) 2015/760 and the lack of a cross-reference to Directive 2014/65/EU, which contains a definition of investment advice, have led to a lack of legal certainty and confusion among ELTIF managers and distributors. In addition,Although the obligation to provide investment advice would require external distributors to be authorised under Directive 2014/65/EU when marketing ELTIFs to retail investors. That would create unnecessary impediments to the marketing of ELTIFs to those investors. T, the distribution and marketing of ELTIFs should not be subject to stricter requirements than the distribution of other complex financial products, including the requirements for securitisations laid down in Regulation (EU) 2017/2402 of the European Parliament and of the Council17 and for subordinated eligible liabilities laid down in Directive 2014/59 of the European Parliament and of the Council18 . The obligation to perform a, communicate the result of, and obtain a positive outcome to, the suitability test is sufficient to provide retail investors with the necessary protection and is in line with the existing obligations laid down Regulation (EU) 2017/2402 and Directive 2014/59. It is therefore not necessary to require distributors and managers of ELTIFs to provide retail investors with that investment advice. _________________ 17 Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35). 18 Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).
Amendment 124 #
Proposal for a regulation
Recital 21 a (new)
Recital 21 a (new)
(21 a) As ELTIFs aim to finance long- term assets, sufficient attention should be given to the risk of assets becoming stranded due to economic transition away from fossil fuels and other polluting activities. Currently investors tend to underprice the risks of legislative action to address climate change. This means they expose their investors to significant risks and increase the cost of the transition to a sustainable economy. As such, ELTIFs should not invest in assets that have a high risk of becoming stranded due to the economic transition. ESMA should develop regulatory technical standards to indicate which assets fall into this category.
Amendment 147 #
Proposal for a regulation
Recital 34
Recital 34
(34) Adequate disclosure of fees and charges is critically important for the evaluation of the ELTIFs as a potential investment target by investors. Such disclosure is also important where the ELTIF is marketed to retail investors in the case of master-feeder structures. It is therefore appropriate to require the ELTIF manager to include in the annual report of the feeder ELTIF a statement on the aggregate charges of the feeder ELTIF and the master ELTIF. In order to protect investors from being charged unjustified additional costs, there should be a prohibition on master ELTIFs charging feeder ELTIFs subscription and redemption fees.
Amendment 169 #
Proposal for a regulation
Article 1 – paragraph 1 – point 4 a (new)
Article 1 – paragraph 1 – point 4 a (new)
Regulation (EU) 2015/760
Article 7 – paragraph 4
Article 7 – paragraph 4
(4 a) In Article 7, paragraph 4 is added: ‘4. An ELTIF shall comply with the requirements of either Article 8 or of Article 9 of Regulation (EU) 2019/2088.’
Amendment 188 #
Proposal for a regulation
Article 1 – paragraph 1 – point 5 Regulation (EU) 2015/760
Article 1 – paragraph 1 – point 5 Regulation (EU) 2015/760
(f a) green bonds issued in accordance with Regulation (EU) …/… [insert reference to the Regulation on European green bonds - COM(2021)0391 after its adoption by the European Parliament and the Council] of the European Parliament and of the Council;
Amendment 189 #
Proposal for a regulation
Article 1 – paragraph 1 – point 5
Article 1 – paragraph 1 – point 5
Regulation (EU) 2015/760
Article 10 – paragraph 1 – point f b (new)
Article 10 – paragraph 1 – point f b (new)
(f b) financial products that have sustainable investment as their objective in accordance with Article 9 of Regulation (EU) 2019/2088 of the European Parliament and of the Council;
Amendment 191 #
Proposal for a regulation
Article 1 – paragraph 1 – point 5
Article 1 – paragraph 1 – point 5
Regulation (EU) 2015/760
Article 10 – paragraph 2 a (new)
Article 10 – paragraph 2 a (new)
2 a. Eligible investment assets shall be subject to the minimum safeguards referred to in Article 18 of Regulation (EU) 2020/852 of the European Parliament and of the Council.
Amendment 196 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6 – point b a (new)
Article 1 – paragraph 1 – point 6 – point b a (new)
Regulation (EU) 2015/760
Article 11 – paragraph 1 – point c – point i
Article 11 – paragraph 1 – point c – point i
Amendment 206 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point a
Article 1 – paragraph 1 – point 8 – point a
Regulation (EU) 2015/760
Article 13 – paragraph 1 a (new)
Article 13 – paragraph 1 a (new)
1 a. An ELTIF shall invest at least 37% of its aggregated investments in environmentally sustainable economic activities, as calculated in accordance with Article 17(1) to (4) of [delegated regulation supplementing Regulation 2019/2088]. For the purpose of calculating the minimum percentage of sustainable assets, where the delegated acts adopted pursuant to Regulation (EU) 2020/852 are amended following the execution of the investment strategy by the manager of the ELTIF, investments that have already been allocated shall not be required to be reallocated.
Amendment 239 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 a (new)
Article 1 – paragraph 1 – point 8 a (new)
Regulation (EU) 2015/760
Article 14a (new)
Article 14a (new)
Amendment 262 #
Proposal for a regulation
Article 1 – paragraph 1 – point 15 – point a a (new)
Article 1 – paragraph 1 – point 15 – point a a (new)
Regulation (EU) 2015/760
Article 23 – paragraph 3b (new)
Article 23 – paragraph 3b (new)
(a a) the following paragraph is inserted: '3b. The prospectus shall not contain information to be disclosed by collective investment undertakings of the closed-end type in accordance with Regulation (EU) 2017/1129.';
Amendment 266 #
Amendment 268 #
Proposal for a regulation
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Regulation (EU) 2015/760
Article 30 – paragraph 1
Article 30 – paragraph 1
1. The units or shares of an ELTIF may onlyshall be marketed to a retail investor whereonly if the following conditions are fulfilled: (a) an assessment of suitability in accordance with Article 25, paragraphs 1, 2 and 5, Article 25(6), second and third subparagraph, and Article 25(7) of Directive 2014/65/EU has been ca(2) of Directive 2014/65/EU has been carried out, and its result has been communicated, with respect to that investor; (b) in all cases, the seller of the ELTIF has ascertained, on the basis of the assessment referried out with respect to thatto in point (a) of this paragraph, that the ELTIF is suitable for that retail investor.
Amendment 269 #
Proposal for a regulation
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Regulation (EU) 2015/760
Article 30 – paragraph 2 a (new)
Article 30 – paragraph 2 a (new)
2 a. The manager of the ELTIF or the distributor shall issue a clear written alert to the retail investor that investing an aggregate amount exceeding 10 % of the retail investor’s portfolio of financial instruments in ELTIFs may constitute excessive risk taking.