33 Amendments of Jean-Paul GAUZÈS related to 2013/0214(COD)
Amendment 58 #
Proposal for a regulation
Recital 1
Recital 1
(1) Long-term finance is a crucial enabling tool for putting the European economy on a path of sustainable, smart and inclusive growth and for building tomorrow's economy in a way that is less prone to systemic risks and is more resilient. European long-term investment funds (ELTIFs) provide finance to various infrastructure projects or unlisted companies of lasting duration that issue equity or debt instruments for which there is no readily identifiable buyer. By providing finance to such projects, ELTIFs contribute to the financing of the Union economies.
Amendment 64 #
Proposal for a regulation
Recital 2
Recital 2
(2) On the demand side, ELTIFs can provide a steady income stream for pension administrators, insurance companies and other entities that face regular and recurrent liabilities. While providing less liquidity than investments in transferable securities, ELTIFs can provide a steady income stream for individual investors that rely on the regular cash flow that an ELTIF can produce. ELTIFs can also offer good opportunities for capital appreciation over time for those investors not receiving a steady income stream. An ELTIF may be authorised to reduce its capital on a pro rata basis in the event that it has divested itself of one of its assets.
Amendment 73 #
Proposal for a regulation
Recital 5
Recital 5
(5) Long-term asset classes within the meaning of this Regulation should comprise non-listed and listed undertakings that issue equity or debt instruments for which there is no readily identifiable buyer. This Regulation should also covers real assets that require significant up-front capital expenditure and that produce recurrent and foreseeable cash flow through their life.
Amendment 75 #
Proposal for a regulation
Recital 7
Recital 7
(7) Uniform rules across the Union are necessary to ensure that ELTIFs display a coherent product profile across the Union. In order to ensure the smooth functioning of the internal market and a high level of investor protection, it is necessary to establish uniform rules regarding the operation of ELTIFs, in particular on the composition of the portfolio of ELTIFs and the investment instruments that they are allowed to use in order to gain exposure to long term assets such as listed and non- listed undertakings and real assets. Uniform rules on the portfolio of an ELTIF are also required to ensure that ELTIFs that aim to generate regular income maintain a diversified portfolio of investment assets suitable to maintain the regular cash flow.
Amendment 78 #
Proposal for a regulation
Recital 8
Recital 8
(8) It is essential to ensure that the definition of the operation of ELTIFs, in particular on the composition of the portfolio of ELTIFs and the investment instruments that they are allowed to use be directly applicable to the managers of ELTIFs and therefore these new rules need to be adopted as a Regulation. This also ensures uniform conditions for the use of the designation ELTIF by preventing diverging national requirements. Managers of ELTIFs should follow the same rules across the Union, in order to also enhance the confidence of investors in ELTIFs and ensure sustainable trustworthiness of the designation. At the same time, by adopting uniform rules, the complexity of the regulatory requirements applicable to ELTIFs is reduced. By means of uniform rules, the managers' cost of compliance with divergent national rules governing funds that invest in listed and non-listed undertakings and comparable real asset classes is also reduced. This is especially true for managers that wish to raise capital on a cross-border basis. It also contributes to eliminate competitive distortions.
Amendment 80 #
Proposal for a regulation
Recital 10
Recital 10
(10) Whereas Directive 2011/61/EU also foresees a staged third country regime governing non-EU AIFMs and non-EU AIFs, the new rules on ELTIFs have a more limited scope emphasising the European dimension of the new long term investment product. Hence, only an EU AIF as defined in Directive 2011/61/EU is eligible to become an authorised ELTIF and only if it is managed by an EU AIFM that has been authorised in accordance with Directive 2011/61/EU. An ELTIF can also be a retail AIF that is managed by an AIFM authorized in accordance with Directive 2011/61/EU, in which case the powers granted by article 43 of Directive 2011/61/EU to Members States to impose stricter requirements on the fund and its manager should apply.
Amendment 81 #
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 and at least 50% of its capital in securities issued by an eligible portfolio undertaking established in the EU. 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 assets. 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.
Amendment 86 #
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 93 #
Proposal for a regulation
Recital 18
Recital 18
(18) Eligible investment assets must be understood to include participations, such as equity or quasi-equity instruments, debt instruments in qualifying portfolio undertakings and loans provided to them. They should also include participation in other funds that are focused on assets such as investments in non-listed undertakings that issue equity or debt instruments for which there is not always a readily identifiable buyer. Direct holdings of real assets, unless they are securitised, should also form a class of eligible assets under strict conditions regarding their acquisition value and cash-flow profile.
Amendment 96 #
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. Therefore qualifying portfolio undertakings should not be listed on regulated markets. Qualifying portfolio undertakings include infrastructure projects, investment in listed and unlisted companies seeking growth and investments in real estate or other real assets that could be suitable for long term investment purposes.
Amendment 102 #
Proposal for a regulation
Recital 24
Recital 24
(24) Unlisted undertakings 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. Listed undertakings can also face difficulties in maintaining a stable shareholding structure essential to their long term strategy. As listed securities are a type of long-term investment product, they should also be eligible as portfolio assets for ELTIF.
Amendment 104 #
Proposal for a regulation
Recital 25
Recital 25
(25) Investments in real assets require patient capital due to the absence of liquid secondary markets. Investment funds represent an essential source of financing for assets that require large capital expenditure. For these assets, capital pooling is often necessary to achieve the desired level of funding. Such investments require long periods of time due to the generally long economic cycle attached to these assets. It generally takes several years to amortize the investment in large real assets. In order to facilitate the development of such large assets, ELTIFs should be able to invest directly in real assets with a value of more than €10 million and which deliver foreseeable and recurrent cash- flows throughout their life. In practice this would include assets such as infrastructure, real estate, ships, aircraft or rolling stock. For these reasons it is necessary to treat direct holdings in real assets and investments in qualifying portfolio undertakings in like manner.
Amendment 111 #
Proposal for a regulation
Recital 31
Recital 31
(31) Due to the long-term and illiquid nature of the investments of an ELTIF, the managers should have sufficient time to apply the investment limits. The time required to implement these limits should take account of the peculiarities and characteristics of the investments but should not exceed five years. In addition, the life of an ELTIF shall be in line with its long term investment strategy.
Amendment 116 #
Proposal for a regulation
Recital 34
Recital 34
Amendment 118 #
Proposal for a regulation
Recital 36
Recital 36
(36) As ELTIFs target both professional and retail investors across the Union, it is necessary that certain requirements be added to the marketing requirements laid down in Directive 2011/61/EU in order to ensure an appropriate degree of investor protection. Thus, facilities should be made 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. Moreover, in order to ensure that retail investors are not disadvantaged with respect to experienced professional investors certain safeguards have to be put in place when ELTIFs are marketed to retail investors. and Member States must be able to exert the rights granted to them by article 43 of Directive 2011/61/EU.
Amendment 120 #
Proposal for a regulation
Recital 37 a (new)
Recital 37 a (new)
(37a) In order to ensure proper enforcement, this Regulation contains administrative penalties and other measures for the breach of key provisions of this Regulation, which are the rules on portfolio composition and diversification, on the application of rules and liabilities, the marketing requirement, and on the use of the designation 'ELTIF" only by managers of qualified long term funds that are authorised in accordance with directive 2011/61/EU and this Regulation. A breach of those key provisions should entail, where appropriate, the prohibition of the use of the designation and the removal of the manager concerned from the register.
Amendment 123 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
2. Member States shall not add any additional requirements in the field covered by this Regulation. except as provided under article 43 of Directive 2011/61/EU on Alternative Investment Fund Managers.
Amendment 138 #
Proposal for a regulation
Article 4 – paragraph 1 – subparagraph 2 – point d a (new)
Article 4 – paragraph 1 – subparagraph 2 – point d a (new)
(da) when the ELTIF is marketable to retail investors, a description of the procedures and arrangements in place to deal with retail investors' complaints;
Amendment 154 #
Proposal for a regulation
Article 8 – paragraph 2 – point c
Article 8 – paragraph 2 – point c
Amendment 169 #
Proposal for a regulation
Article 9 – paragraph 1 – point e
Article 9 – paragraph 1 – point e
(e) direct holdings of individual real assets thatprovided that: - they 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; and - they deliver recurrent and foreseeable cash-flows throughout their life.
Amendment 175 #
Proposal for a regulation
Article 10 – paragraph 1 – point b
Article 10 – paragraph 1 – point b
Amendment 188 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
1. An ELTIF shall invest at least 70% of its capital in eligible investment assets and at least 50% of its capital in assets listed in articles 9 (a) to 9 (c) whose issuing qualifying portfolio undertaking is established within the territory of a Member State.
Amendment 201 #
Proposal for a regulation
Article 12 – paragraph 4
Article 12 – paragraph 4
4. The aggregate risk exposure to a counterparty of the ELTIF stemming from over the counter (OTC) derivative transactions or repurchase agreements or reverse repurchase agreements shall not exceed 5% of its capital.
Amendment 215 #
Proposal for a regulation
Article 15 – paragraph 2
Article 15 – paragraph 2
Amendment 232 #
Proposal for a regulation
Article 16 – paragraph 2
Article 16 – paragraph 2
2. The life of the ELTIF shall be consistent with the long term nature of the ELTIF and shall sufficient in length to cover the life-cycle of each of the individual assets of the ELTIF, measured according to the illiquidity profile and economic life-cycle of the asset, and the stated investment objective of the ELTIF.
Amendment 248 #
Proposal for a regulation
Article 20 – paragraph 2 a (new)
Article 20 – paragraph 2 a (new)
2a. An ELTIF shall be authorised to reduce its capital on a pro rata basis in the event that it has disposed of one of its portfolio assets.
Amendment 272 #
Proposal for a regulation
Article 24 – paragraph 1 – point h a (new)
Article 24 – paragraph 1 – point h a (new)
(ha) the manager of the ELTIF shall establish appropriate procedures and arrangements to deal with retail investors' complaints. Those measures shall allow retail investors to file complaints in the official language or one of the official languages of their Member State;
Amendment 273 #
Proposal for a regulation
Article 24 – paragraph 1 – point h b (new)
Article 24 – paragraph 1 – point h b (new)
(hb) the legal form of the ELTIF is such that retail investors cannot lose more than the amount they have invested into the fund;
Amendment 274 #
Proposal for a regulation
Article 24 – paragraph 1 – point h c (new)
Article 24 – paragraph 1 – point h c (new)
(hc) the ELTIF shall only invest in units or shares of EuVECA and EuSEF providing these funds have a depositary.
Amendment 276 #
Proposal for a regulation
Article 25 – paragraph 1
Article 25 – paragraph 1
1. The manager of an ELTIF shall be able to market the units or shares of that authorised ELTIF to professional and retail investors: a) in its home Member State upon notification in accordance with Article 31 of Directive 2011/61/EU and, in case the ELTIF is marketed to retail investors, subject to the requirements imposed by Member States pursuant to article 43 of Directive 2011/61/EU. b) in Member States other than in the home Member State of the ELTIF manager upon notification in accordance with Article 32 of Directive 2011/61/EU and, in case the ELTIF is marketed to retail investors subject to the requirements imposed by Member States pursuant to article 43 of Directive 2011/61/EU.
Amendment 278 #
Proposal for a regulation
Article 25 – paragraph 2
Article 25 – paragraph 2
Amendment 285 #
Proposal for a regulation
Article 27 – paragraph 1 a (new)
Article 27 – paragraph 1 a (new)
1 a. The competent authority of the ELTIF shall while respecting the principle of proportionality, take the appropriate measures where manager of ELTIF notably: (a) fails to comply with the requirements that apply portfolio composition and diversification, in breach of Articles 12 and 15; (b) markets, in breach of Article 24 and 25, the units of shares of a ELTIF to retail investors; (c) uses the designation ELTIF but is not authorised in accordance with article 3; (d) uses the designation ELTIF for the marketing of funds which are not established in accordance with paragraph 1 of Article 3; (e) fails to comply with the applicable rules and liability in breach of Article 6. In those cases, the competent authority of the home Member State shall, as appropriate: (a) take measures to ensure that the manager of ELTIF complies with articles 3, 6, 12, 15, 24, 25 and paragraph 1 of article 3; (b) prohibit the use of the designation ELTIF and remove the manager of a ELTIF concerned from the authorisation.
Amendment 286 #
Proposal for a regulation
Article 28 a (new)
Article 28 a (new)
Article 28 a Sanctions and administrative measures 1. Member States shall lay down the rules on administrative penalties and other measures applicable to breaches of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The administrative penalties and other measures provided for shall be effective, proportionate and dissuasive. 2. By XX/XX/XX the Member States shall notify the Commission and ESMA of the rules referred to in paragraph 1. They shall notify the Commission and ESMA without delay of any subsequent amendment thereto.