Activities of Elisabetta GUALMINI related to 2021/0377(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/760 as regards the scope of eligible assets and investments, the portfolio composition and diversification requirements, the borrowing of cash and other fund rules and as regards requirements pertaining to the authorisation, investment policies and operating conditions of European long-term investment funds
Amendments (31)
Amendment 78 #
Proposal for a regulation
Recital 4
Recital 4
(4) ELTIFs have a potential to facilitate long-term investments in the real economy. Long- term investments in projects, undertakings, and infrastructure projects in third countries can bring capital to ELTIFs and thereby benefit the economy of the Union. Such benefits can originate in multiple ways, including through investments that promote the development of border regions, enhance commercial, financial and technological cooperation and facilitate investments in environmental and sustainable energy projects. Investments in third country qualifying undertakings and eligible assets may bring substantial benefits to investors and ELTIF managers and to the economies, infrastructure, climate and environmental sustainability and citizens of such third countries. It and should therefore be allowed that the. However, the main objective of the ELTIF Regulation is to channel capital towards European long-term investments in the real economy, and therefore a majority of suchthe ELTIF assets and investments or the main revenue or profit generation of such assets and investments arshould be located in a third countrywithin the Union.
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 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 113 #
Proposal for a regulation
Recital 16
Recital 16
(16) Unlike retail investors, professional investors may, in certain circumstances, have a longer time horizon, distinct financial returns objectives, more expertise, possess higher risk tolerance to adverse market conditions and higher capacity to absorb losses. Such professional inverstors thus require lessa different set of investor protection measure thans as compared to retail investors. It is therefore appropriate to remove the diversification requirements for ELTIFs that are solely marketed to professional investors.
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 115 #
Proposal for a regulation
Recital 18 a (new)
Recital 18 a (new)
(18 a) To avoid an excessive concentration of a client's financial instrument portfolio in ELTIFs, the manager of the ELTIF or the distributor should issue a clear written alert that informs the client that investing an aggregate amount exceeding 10 % of the client's financial instrument portfolio in ELTIFs could constitute excessive risk taking.
Amendment 117 #
Proposal for a regulation
Recital 18 b (new)
Recital 18 b (new)
(18 b) As required by Article 25 of Directive 2014/65/EU, the suitability assessment should comprise information on the expected duration of the investment and its purpose, as well as the client's investment objectives, risk preferences and financial situation, including the client's ability to bear losses. The result of the assessment should be communicated to the investor. If, following the outcome of the suitability assessment, the ELTIF is not suitable for the retail investor, or in cases where it is not possible to carry out the suitability assessment, the manager of the ELTIF or the distributor should not recommend or sell the ELTIF to the retail client.
Amendment 132 #
(25) Leverage is frequently used to enable the day-to-day operation of an ELTIF and to carry out a specific investment strategy. Moderate amounts of leverage can amplify returns, and, where controlled adequately, without incurring or exacerbating excessive risks. In addition, leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. Since the borrowing of cash threshold is currently limited to 30% of the capital of the ELTIF, ELTIF managers may be unable to successfully pursue certain investment strategies, including in the case of investments in real assets, where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. It is therefore appropriate to increase the flexibility of managers of ELTIFs to raise further capital during the life of the ELTIF. In view of the possible risks that leverage can entail, ELTIFs marketed to retail investors should be permitted to borrow cash amounting to up to 530 % of the value of the capital of the ELTIF. The 530 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. As for ELTIFs marketed to professional investors, however, a higher leverage threshold should be permitted, because professional investors have a higher risk-tolerance than retail investors. The borrowing of cash threshold for ELTIFs that are marketed to professional investors only should therefore be extended to 100 % of the ELTIF capital.
Amendment 139 #
Proposal for a regulation
Recital 28
Recital 28
(28) Given the increase of the maximum thresholds for borrowing cash by ELTIFs marketed solely to professional investors and the removal of certain limitations on the borrowing of cash in foreign currencies, investors should have more comprehensive information on the borrowing strategy and limits employed by the ELTIF. It is therefore appropriate to require ELTIF managers to explicitly disclose in the prospectus of the ELTIF concerned the borrowing strategy and the borrowing limits and to provide information on how leverage will contribute to the ELTIF strategy and how currency and duration risks will be mitigated.
Amendment 144 #
Proposal for a regulation
Recital 31
Recital 31
(31) Article 19(1) of the current version of Regulation (EU) 2015/760 requires that the rules or instruments of incorporation of an ELTIF do not prevent units or shares of the ELTIF from being admitted to trading on a regulated market or on a multilateral trading facility. Despite that possibility, ELTIF managers, investors and market participants have hardly used the secondary trading mechanism by for the trading of shares or units of ELTIFs. To promote the secondary trading of ELTIF units or shares, it is appropriate to allow ELTIF managers to put in place a possibility for an early exit of ELTIF investors, before the end of the ELTIF’s life. In order to ensure an effective functioning of such a secondary trading mechanism, such an early exit should be possible only where the manager of the ELTIF has put in place a policy for matching potential investors and exit requests. That policy should, among others, specify the transfer process, the role of the ELTIF manager and the ELTIF administrator, the duration of the liquidity window during which the units or shares of the ELTIF could be exchanged, the execution price, pro-ration conditions, disclosure requirements, fees, costs and charges and other conditions pertaining to such a liquidity window mechanism. In order to avoid any misperception by retail investors regarding the legal nature of, and the liquidity that is potentially created by, the policy for matching under the optional liquidity window mechanism, the manager of the ELTIF or the distributor should issue a clear written alert to the retail investor that the availability of such a matching policy does not guarantee a match or entitle retail investors to exit or redeem their units or shares of the ELTIF concerned.
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 151 #
Proposal for a regulation
Recital 40
Recital 40
(40) In order to give ELTIF managers sufficient time to adapt to the new requirements, including the requirements pertaining to the marketing of ELTIFs to investors, this Regulation should start to apply six12 months after its entry into force,
Amendment 152 #
Proposal for a regulation
Recital 40 a (new)
Recital 40 a (new)
(40 a) However, keeping in mind the long-term nature of ELTIFs, and to avoid requiring existing ELTIFs to materially change their portfolio composition and investment strategy, existing ELTIFs should be subject to a grandfathering clause. Moreover, transitional rules should be provided for the benefit of ELTIFs authorised under Regulation (EU) 2015/760 prior to the entry into force of this Regulation. Therefore, the requirements laid down in this Regulation should not apply to ELTIFs authorised prior to the entry into force of this Regulation, except in cases where an ELTIF makes a request to benefit from the rights, and assume the obligations, provided for by this Regulation.
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 235 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point c a (new)
Article 1 – paragraph 1 – point 8 – point c a (new)
Regulation (EU) 2015/760
Article 13 – paragraph 4a (new)
Article 13 – paragraph 4a (new)
(c a) the following paragraph is inserted: '4a. An ELTIF shall invest at least 70% of its capital instruments in qualifying undertakings based in the Union.';
Amendment 244 #
Proposal for a regulation
Article 1 – paragraph 1 – point 10 – point a – point i
Article 1 – paragraph 1 – point 10 – point a – point i
Regulation (EU) 2015/760
Article 16 – paragraph 1 – point a
Article 16 – paragraph 1 – point a
(a) it represents no more than 530 % of the value of the capital of the ELTIF, and no more than 100 % of the value of the capital of the ELTIF for ELTIFs marketed solely to professional investors;
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.
Amendment 270 #
Proposal for a regulation
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Regulation (EU) 2015/760
Article 30 – paragraph 2 b (new)
Article 30 – paragraph 2 b (new)
2 b. Where the rules or instruments of incorporation of an ELTIF provide for the possibility of the matching of units or shares of the ELTIF as provided for in Article 19(2a), the manager of the ELTIF or the distributor shall issue a clear written alert to the retail investor that the availability of such a possibility does not guarantee or entitle the retail investor to exit or redeem its units or shares of the ELTIF concerned.
Amendment 283 #
Proposal for a regulation
Article 2 – paragraph 2
Article 2 – paragraph 2
Regulation (EU) 2015/760
Article 38 – paragraph 1– subparagraph 2
Article 38 – paragraph 1– subparagraph 2
It shall apply from [entry into force + 6 months12 months after the date of entry into force of this Regulation].
Amendment 286 #
Proposal for a regulation
Article 2 – paragraph 2 a (new)
Article 2 – paragraph 2 a (new)
Regulation (EU) 2015/760
Article 38 – paragraph 1– subparagraph 2a (new)
Article 38 – paragraph 1– subparagraph 2a (new)
ELTIFs established before … [date of the entry into force of this Regulation] shall not be required to comply with its provisions, except in cases where an ELTIF makes a request to benefit from the rights and assume the obligations provided for by this Regulation.