BETA


2018/0041(COD) Cross-border distribution of collective investment funds: pre-marketing and de-notification

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON KLINZ Wolf (icon: ALDE ALDE) LAMASSOURE Alain (icon: PPE PPE), DELVAUX Mady (icon: S&D S&D), KAMALL Syed (icon: ECR ECR), CARTHY Matt (icon: GUE/NGL GUE/NGL), GIEGOLD Sven (icon: Verts/ALE Verts/ALE)
Committee Opinion JURI
Lead committee dossier:
Legal Basis:
TFEU 053-p1

Events

2019/07/12
   Final act published in Official Journal
2019/06/20
   CSL - Draft final act
Documents
2019/06/20
   CSL - Final act signed
2019/06/20
   EP - End of procedure in Parliament
2019/06/14
   EP/CSL - Act adopted by Council after Parliament's 1st reading
2019/06/14
   CSL - Council Meeting
2019/04/16
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 526 votes to 98, with 26 abstentions, a legislative resolution on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/65/EC of the European Parliament and of the Council and Directive 2011/61/EU of the European Parliament and of the Council with regard to cross-border distribution of collective investment funds.

This proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper.

The European Parliament's position adopted at first reading under the ordinary legislative procedure amended the Commission's proposal as follows.

Support for local investors (facilities)

The amended Directive establishes rules to modernise and specify the requirements for providing facilities to retail investors.

Under the amended text, Member States shall ensure that the UCITS management company offers, in each Member State where it intends to market units of a UCITS, facilities to perform the following tasks: process subscription; repurchase and redemption orders and make other payments to unit-holders relating to the units of the UCITS; provide investors with information on how orders can be made and how repurchase and redemption proceeds are paid; make the information and documents required available to investors and act as a contact point for communicating with the competent authorities.

The UCITS shall ensure that the facilities to perform the tasks are provided:

- in the official language or one of the official languages of the Member State where the UCITS is marketed or in a language approved by the competent authorities of that Member State;

- by the UCITS itself or a third party subject to regulation and supervision governing the tasks to be performed, or both, including by the use of electronic means.

Notification

If a UCITS proposes to market its units in a Member State other than its home Member State, it will have to send a notification letter in advance to the competent authorities of its home Member State. The notification letter shall also include the details necessary, including the address, for the invoicing or for the communication of any applicable regulatory fees or charges by the competent authorities of the host Member State and information on the facilities for performing the tasks.

Withdrawal of notifications related to the use of the marketing passport

The competent authorities of the UCITS home Member State shall ensure that UCITS may proceed to the denotification of the marketing activities of its units in a Member State where it has notified its activities, where all the following conditions are fulfilled. The notice to investors shall make clear the consequences for investors if they do not accept the offer to repurchase their units.

The information shall be provided in the official language or one of the official languages of the Member State where the UCITS has been marketed or in a language approved by the competent authorities of that Member State.

As long as investors remain invested in the UCITS after marketing is discontinued, the UCITS shall provide investors who remain invested in the UCITS as well as the competent authorities of the home Member State of the UCITS and the competent authorities of the Member State where the marketing has been discontinued with the information required under the Directive.

In addition, the competent authorities of the Member State where the marketing has been discontinued shall exercise the rights and obligations conferred on competent authorities of the UCITS host Member State, in accordance with the Directive.

Conditions for pre-marketing in the Union by an EU-based AIFM

For pre-marketing to be recognised as such under Directive 2011/61/EU, it should be addressed to potential professional investors and concern an investment idea or investment strategy in order to test their interest in an alternative investment fund (AIF).

In order to ensure that national competent authorities can exercise their control over pre-marketing activities in their Member States, an EU AIFM should send, within two weeks of having begun pre-marketing, an informal letter, in paper form or by electronic means, to the competent authorities of its home Member State, specifying inter alia in which Member States it is or has engaged in pre-marketing, the periods during which the pre-marketing is taking or has taken place and including, where relevant, a list of its AIFs and compartments of AIFs which are or were the subject of pre-marketing.

The competent authorities of the home Member State of the EU AIFM should promptly inform the competent authorities of the Member States in which the EU AIFM is or has engaged in pre-marketing thereof.

EU AIFMs shall ensure that their pre-marketing is adequately documented.

Harmonised rules on pre-marketing, should not in any way disadvantage EU AIFMs vis-à-vis non-EU AIFMs.

Review

By two years after the date of entry into force of this Directive, the Commission shall present a report assessing, inter alia, the merits of harmonising the provisions applicable to UCITS management companies testing investor appetite for a particular investment idea or investment strategy, and whether any amendments to Directive 2009/65/EC are needed to that end.

Documents
2019/04/15
   EP - Debate in Parliament
2019/03/04
   EP - Approval in committee of the text agreed at 1st reading interinstitutional negotiations
2019/02/27
   CSL - Coreper letter confirming interinstitutional agreement
2018/12/06
   EP - Committee report tabled for plenary, 1st reading/single reading
Details

The Committee on Economic and Monetary Affairs adopted the report by Wolf KLINZ's (ALDE, DE) on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/65/EC of the European Parliament and of the Council and Directive 2011/61/EU of the European Parliament and of the Council with regard to cross-border distribution of collective investment funds.

This proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper

The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal as follows.

Support for local investors (facilities) : the proposal establishes rules to modernise and specify the requirements for providing facilities to retail investors.

Under the amended text, Member States shall ensure that the UCITS management company offers, in each Member State where it intends to market units of a UCITS, facilities to perform the following tasks: process subscription; repurchase and redemption orders and make other payments to unit-holders relating to the units of the UCITS; provide investors with information on how orders can be made and how repurchase and redemption proceeds are paid; make available to investors, for inspection and for the obtaining of copies of the latest published annual report of the UCITS and the latest published half-yearly report if more recent; the prospectus of the UCITS; the most up-to-date key [investor] information document for the UCITS.

The UCITS shall ensure that the facilities to perform the tasks are provided:

in the official language or one of the official languages of the Member State where the UCITS is marketed or in a language approved by the competent authorities of that Member State; by the UCITS itself or a third party subject to regulation and supervision governing the tasks to be performed, or both, including by the use of electronic means.

Withdrawal of notifications related to the use of the marketing passport : the competent authorities of the UCITS home Member State shall ensure that UCITS may proceed to the denotification of the marketing activities of its units in a Member State where it has notified its activities, where all the following conditions are fulfilled. The notice to investors shall make clear the consequences for investors if they do not accept the offer to repurchase their units.

The information shall be provided in the official language or one of the official languages of the Member State where the UCITS has been marketed or in a language approved by the competent authorities of that Member State.

As long as investors remain invested in the UCITS after marketing is discontinued, the UCITS shall provide investors who remain invested in the UCITS as well as the competent authorities of the home Member State of the UCITS and the competent authorities of the Member State where the marketing has been discontinued with the information required under the Directive.

In addition, the competent authorities of the Member State where the marketing has been discontinued shall exercise the rights and obligations conferred on competent authorities of the UCITS host Member State, in accordance with the Directive.

Conditions for pre-marketing in the Union by an EU-based AIFM : in order to ensure that national competent authorities can exercise their control over pre-marketing activities in their Member States, Parliament specified that AIFMs shall send an informal letter or e-mail to the competent authorities of their home Member State and the competent authorities of the Member State or Member States where they will engage in pre-marketing activities, mentioning in which Member State or Member States they will conduct pre-marketing activities.

AIFMs shall ensure that their pre-marketing activities are appropriately documented and made available, upon request, to the national competent authorities concerned. Such information should include a reference to the Member States and the period of time in which the pre-marketing activities took place and a description of the investment strategies or investment ideas presented in the course of the pre-marketing activities.

Evaluation : the Commission shall submit a legislative proposal to the European Parliament and the Council in order to harmonise the provisions applicable to UCITS management companies testing the appetite of professional investors for a particular investment idea or investment strategy.

Before the entry into force of certain provisions of Directive 2011/61/EU, the Commission shall submit a report to the European Parliament and the Council, and if appropriate, legislative proposals after an examination of the application of all the provisions of Directive 2011/61/EU in the context of their application in the scenario of a passporting regime being in place for non-EU AIFMs.

Documents
2018/12/03
   EP - Vote in committee, 1st reading/single reading
2018/12/03
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
2018/10/25
   EP - Amendments tabled in committee
Documents
2018/10/02
   EP - Committee draft report
Documents
2018/05/31
   EP - KLINZ Wolf (ALDE) appointed as rapporteur in ECON
2018/05/14
   PT_PARLIAMENT - Contribution
Documents
2018/05/14
   ES_CONGRESS - Contribution
Documents
2018/04/16
   EP - Committee referral announced in Parliament, 1st reading/single reading
2018/03/12
   EC - Legislative proposal published
Details

PURPOSE: to reduce regulatory barriers to the cross-border distribution of investment funds in the EU.

PROPOSED ACT: Directive of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: this proposal should be seen in the broader context of the Capital Markets Union (CMU) action plan and the CMU Mid-Term Review , to establish a genuine internal capital market by addressing fragmentation in the capital markets, removing regulatory barriers to the financing of the economy and increasing the supply of capital to businesses.

Investment funds are investment products created with the sole purpose of pooling investors’ capital, and investing that capital collectively through a portfolio of financial instruments such as stocks, bonds and other securities. In the EU, investment funds can be categorised as undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs) managed by alternative investment fund managers (AIFMs).

While EU investment funds have seen rapid growth, with a total of EUR 14 310 billion in assets under management in June 2017, the EU investment fund market is still predominantly organised as a national market :

70 % of all assets under management are held by investment funds authorised or registered for distribution only in their domestic market; only 37 % of UCITS and about 3 % of AIFs are registered for distribution in more than three Member States.

Regulatory barriers , namely Member States’ marketing requirements, regulatory fees and administrative and notification requirements represent a significant disincentive to the cross-border distribution of funds. These barriers were identified in response to the Green Paper on Capital Markets Union.

These new measures are expected to reduce the cost of going cross-border and should support a more integrated single market for investment funds . They should, in turn, should reduce market fragmentation, increase competition, and ultimately help to deliver greater choice and better value for investors in the EU.

This proposal is presented together with a proposed dedicated Regulation on facilitating cross-border distribution of collective investment funds and amending Regulations (EU) No 345/2013 and (EU) No 346/2013.

IMPACT ASSESSMENT: following the evaluation of the strategic options being considered, the policy choices are as follows:

more transparent national marketing requirements at both national and EU level, harmonisation of the definition of pre-marketing in Directive 2011/61/EU and clearer guidance on the process of checking marketing material; greater transparency of regulatory fees at EU level, and the establishment of key principles to ensure greater consistency in the way these fees are determined; the choice of facilities to support local investors should be left to investment fund managers, with safeguards for investors; increased harmonisation of procedures and conditions for updating or withdrawing notifications on the use of the marketing passport.

CONTENT: this proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper.

Its main elements are:

Support for local investors (facilities) : the proposal sets out rules to modernise and specify the requirements for providing facilities to retail investors, a physical presence should not be required by Member States. While requiring that facilities are established in each Member State where marketing activities are carried out and which serve situations such as making subscriptions, making payments or repurchasing or redeeming units, this proposal allows fund managers to use electronic or other means of distance communication with investors. The information and means of communication should be available to investors in the official languages of the Member State where the investor is located.

The requirements relating to facilities are also applied to AIFMs where Member States allow them to market units or shares of AIFs to retail investors in their territories.

De-notification of the use of the marketing passport : the proposed Directive harmonises the conditions under which investment funds may exit a national market . It creates the possibility for asset managers to stop marketing an investment fund in defined cases in one or several host Member States.

Asset managers are allowed to de-notify the marketing of their UCITS only if a maximum of 10 investors who hold up to 1 % of assets under management of this UCITS have invested in this UCITS in an identified Member State. The competent authorities of the home Member State of this UCITS will verify the compliance with this requirement, including the transparency and publication requirement for investors and the repurchase offer.

All obligations to inform will continue to apply to remaining investors after de-notification of the marketing activities in a Member State.

Pre-marketing : the proposal also allows European asset managers to engage in pre-market activities to test an investment idea or an investment strategy with professional investors.

Therefore, this proposal lays down clear conditions, including thresholds, under which deregistration could take place. The thresholds are indicative of when a fund manager may consider that its activities have become insignificant in a particular host Member State.

Documents

Votes

A8-0430/2018 - Wolf Klinz - Am 2 16/04/2019 12:28:14.000

2019/04/16 Outcome: +: 526, -: 98, 0: 26
DE PL ES RO IT GB FR BE SE AT BG CZ PT SK FI NL HR LT HU LV SI LU DK MT EE IE CY EL
Total
90
45
52
30
55
56
69
20
18
17
13
20
18
12
11
24
10
9
17
8
8
6
11
6
5
8
1
11
icon: PPE PPE
191

United Kingdom PPE

2

Lithuania PPE

2

Luxembourg PPE

3

Denmark PPE

For (1)

1

Estonia PPE

For (1)

1

Greece PPE

1
icon: S&D S&D
162

Netherlands S&D

For (2)

2

Croatia S&D

2

Hungary S&D

Against (1)

3

Latvia S&D

1

Slovenia S&D

For (1)

1

Luxembourg S&D

For (1)

1

Malta S&D

3

Estonia S&D

For (1)

1
icon: ECR ECR
67

Romania ECR

2

Sweden ECR

2

Bulgaria ECR

For (1)

1

Czechia ECR

2

Slovakia ECR

2

Finland ECR

1

Netherlands ECR

2

Croatia ECR

For (1)

1

Lithuania ECR

1

Latvia ECR

For (1)

1

Greece ECR

Against (1)

1
icon: ALDE ALDE
58
3

Romania ALDE

3

Austria ALDE

For (1)

1

Bulgaria ALDE

3

Portugal ALDE

1

Croatia ALDE

For (1)

1

Lithuania ALDE

2

Latvia ALDE

1

Slovenia ALDE

For (1)

1

Luxembourg ALDE

For (1)

1

Denmark ALDE

2

Estonia ALDE

2

Ireland ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
49

Italy Verts/ALE

For (1)

1

United Kingdom Verts/ALE

5

Belgium Verts/ALE

2

Sweden Verts/ALE

3

Austria Verts/ALE

3

Finland Verts/ALE

For (1)

1

Netherlands Verts/ALE

2

Croatia Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1

Hungary Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Slovenia Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: NI NI
16

Germany NI

For (1)

Against (1)

2

Poland NI

Abstain (1)

2

Italy NI

For (1)

1

France NI

For (1)

3
3
icon: EFDD EFDD
31

Germany EFDD

Abstain (1)

1

France EFDD

Against (1)

4

Czechia EFDD

Against (1)

1

Lithuania EFDD

For (1)

1
icon: ENF ENF
32

Germany ENF

Abstain (1)

1

Poland ENF

2

United Kingdom ENF

Against (1)

1

Belgium ENF

Against (1)

1

Austria ENF

3

Netherlands ENF

4
icon: GUE/NGL GUE/NGL
44

Italy GUE/NGL

For (1)

3

United Kingdom GUE/NGL

Against (1)

1

Sweden GUE/NGL

Against (1)

1

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Denmark GUE/NGL

Against (1)

1

Ireland GUE/NGL

3

Cyprus GUE/NGL

Against (1)

1

A8-0430/2018 - Wolf Klinz - Am 2

2019/04/16 Outcome: +: 526, -: 98, 0: 26
DE PL ES RO GB IT FR BE SE AT BG CZ PT SK FI NL HR LT HU LV SI LU DK MT EE IE ?? CY EL
Total
90
45
50
30
55
54
69
20
17
17
13
20
18
12
11
24
10
9
17
8
8
6
11
6
5
8
2
1
11
icon: PPE PPE
191

United Kingdom PPE

2

Lithuania PPE

2

Luxembourg PPE

3

Denmark PPE

For (1)

1

Estonia PPE

For (1)

1

Greece PPE

1
icon: S&D S&D
162

Netherlands S&D

For (2)

2

Croatia S&D

2

Hungary S&D

Against (1)

3

Latvia S&D

1

Slovenia S&D

For (1)

1

Luxembourg S&D

For (1)

1

Malta S&D

3

Estonia S&D

For (1)

1
icon: ECR ECR
67

Romania ECR

2

Sweden ECR

2

Bulgaria ECR

For (1)

1

Czechia ECR

2

Slovakia ECR

2

Finland ECR

1

Netherlands ECR

2

Croatia ECR

For (1)

1

Lithuania ECR

1

Latvia ECR

For (1)

1

Greece ECR

Against (1)

1
icon: ALDE ALDE
57
3

Romania ALDE

3

Austria ALDE

For (1)

1

Bulgaria ALDE

3

Portugal ALDE

1

Croatia ALDE

For (1)

1

Lithuania ALDE

2

Latvia ALDE

1

Slovenia ALDE

For (1)

1

Luxembourg ALDE

For (1)

1

Denmark ALDE

2

Estonia ALDE

2

Ireland ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
47

United Kingdom Verts/ALE

5

Italy Verts/ALE

For (1)

1

Belgium Verts/ALE

2

Sweden Verts/ALE

2

Austria Verts/ALE

3

Finland Verts/ALE

For (1)

1

Netherlands Verts/ALE

2

Croatia Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1

Hungary Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Slovenia Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: NI NI
16

Germany NI

For (1)

Against (1)

2

Poland NI

Abstain (1)

2

France NI

For (1)

3
3

NI

For (1)

1
icon: EFDD EFDD
31

Germany EFDD

Abstain (1)

1

France EFDD

Against (1)

4

Czechia EFDD

Against (1)

1

Lithuania EFDD

For (1)

1

EFDD

Against (1)

1
icon: ENF ENF
32

Germany ENF

Abstain (1)

1

Poland ENF

2

United Kingdom ENF

Against (1)

1

Belgium ENF

Against (1)

1

Austria ENF

3

Netherlands ENF

4
icon: GUE/NGL GUE/NGL
44

United Kingdom GUE/NGL

Against (1)

1

Italy GUE/NGL

For (1)

3

Sweden GUE/NGL

Against (1)

1

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Denmark GUE/NGL

Against (1)

1

Ireland GUE/NGL

3

Cyprus GUE/NGL

Against (1)

1
AmendmentsDossier
92 2018/0041(COD)
2018/10/24 ECON 92 amendments...
source: 629.583

History

(these mark the time of scraping, not the official date of the change)

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  • date: 2018-10-25T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE629.583 title: PE629.583 type: Amendments tabled in committee body: EP
  • date: 2019-02-27T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/02-27/ECON_LA(2019)001852_EN.pdf title: GEDA/A/(2019)001852 type: Coreper letter confirming interinstitutional agreement body: CSL
  • date: 2019-06-20T00:00:00 docs: url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=ADV&RESULTSET=1&DOC_ID=[%n4]%2F19&DOC_LANCD=EN&ROWSPP=25&NRROWS=500&ORDERBY=DOC_DATE+DESC title: 00053/2019/LEX type: Draft final act body: CSL
  • date: 2018-05-14T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0092 title: COM(2018)0092 type: Contribution body: PT_PARLIAMENT
  • date: 2018-05-14T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0092 title: COM(2018)0092 type: Contribution body: ES_CONGRESS
events
  • date: 2018-03-12T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0092/COM_COM(2018)0092_EN.pdf title: COM(2018)0092 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2018&nu_doc=0092 title: EUR-Lex summary: PURPOSE: to reduce regulatory barriers to the cross-border distribution of investment funds in the EU. PROPOSED ACT: Directive of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: this proposal should be seen in the broader context of the Capital Markets Union (CMU) action plan and the CMU Mid-Term Review , to establish a genuine internal capital market by addressing fragmentation in the capital markets, removing regulatory barriers to the financing of the economy and increasing the supply of capital to businesses. Investment funds are investment products created with the sole purpose of pooling investors’ capital, and investing that capital collectively through a portfolio of financial instruments such as stocks, bonds and other securities. In the EU, investment funds can be categorised as undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs) managed by alternative investment fund managers (AIFMs). While EU investment funds have seen rapid growth, with a total of EUR 14 310 billion in assets under management in June 2017, the EU investment fund market is still predominantly organised as a national market : 70 % of all assets under management are held by investment funds authorised or registered for distribution only in their domestic market; only 37 % of UCITS and about 3 % of AIFs are registered for distribution in more than three Member States. Regulatory barriers , namely Member States’ marketing requirements, regulatory fees and administrative and notification requirements represent a significant disincentive to the cross-border distribution of funds. These barriers were identified in response to the Green Paper on Capital Markets Union. These new measures are expected to reduce the cost of going cross-border and should support a more integrated single market for investment funds . They should, in turn, should reduce market fragmentation, increase competition, and ultimately help to deliver greater choice and better value for investors in the EU. This proposal is presented together with a proposed dedicated Regulation on facilitating cross-border distribution of collective investment funds and amending Regulations (EU) No 345/2013 and (EU) No 346/2013. IMPACT ASSESSMENT: following the evaluation of the strategic options being considered, the policy choices are as follows: more transparent national marketing requirements at both national and EU level, harmonisation of the definition of pre-marketing in Directive 2011/61/EU and clearer guidance on the process of checking marketing material; greater transparency of regulatory fees at EU level, and the establishment of key principles to ensure greater consistency in the way these fees are determined; the choice of facilities to support local investors should be left to investment fund managers, with safeguards for investors; increased harmonisation of procedures and conditions for updating or withdrawing notifications on the use of the marketing passport. CONTENT: this proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper. Its main elements are: Support for local investors (facilities) : the proposal sets out rules to modernise and specify the requirements for providing facilities to retail investors, a physical presence should not be required by Member States. While requiring that facilities are established in each Member State where marketing activities are carried out and which serve situations such as making subscriptions, making payments or repurchasing or redeeming units, this proposal allows fund managers to use electronic or other means of distance communication with investors. The information and means of communication should be available to investors in the official languages of the Member State where the investor is located. The requirements relating to facilities are also applied to AIFMs where Member States allow them to market units or shares of AIFs to retail investors in their territories. De-notification of the use of the marketing passport : the proposed Directive harmonises the conditions under which investment funds may exit a national market . It creates the possibility for asset managers to stop marketing an investment fund in defined cases in one or several host Member States. Asset managers are allowed to de-notify the marketing of their UCITS only if a maximum of 10 investors who hold up to 1 % of assets under management of this UCITS have invested in this UCITS in an identified Member State. The competent authorities of the home Member State of this UCITS will verify the compliance with this requirement, including the transparency and publication requirement for investors and the repurchase offer. All obligations to inform will continue to apply to remaining investors after de-notification of the marketing activities in a Member State. Pre-marketing : the proposal also allows European asset managers to engage in pre-market activities to test an investment idea or an investment strategy with professional investors. Therefore, this proposal lays down clear conditions, including thresholds, under which deregistration could take place. The thresholds are indicative of when a fund manager may consider that its activities have become insignificant in a particular host Member State.
  • date: 2018-04-16T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2018-12-03T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
  • date: 2018-12-03T00:00:00 type: Committee decision to open interinstitutional negotiations with report adopted in committee body: EP
  • date: 2018-12-06T00:00:00 type: Committee report tabled for plenary, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2018-0430&language=EN title: A8-0430/2018 summary: The Committee on Economic and Monetary Affairs adopted the report by Wolf KLINZ's (ALDE, DE) on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/65/EC of the European Parliament and of the Council and Directive 2011/61/EU of the European Parliament and of the Council with regard to cross-border distribution of collective investment funds. This proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal as follows. Support for local investors (facilities) : the proposal establishes rules to modernise and specify the requirements for providing facilities to retail investors. Under the amended text, Member States shall ensure that the UCITS management company offers, in each Member State where it intends to market units of a UCITS, facilities to perform the following tasks: process subscription; repurchase and redemption orders and make other payments to unit-holders relating to the units of the UCITS; provide investors with information on how orders can be made and how repurchase and redemption proceeds are paid; make available to investors, for inspection and for the obtaining of copies of the latest published annual report of the UCITS and the latest published half-yearly report if more recent; the prospectus of the UCITS; the most up-to-date key [investor] information document for the UCITS. The UCITS shall ensure that the facilities to perform the tasks are provided: in the official language or one of the official languages of the Member State where the UCITS is marketed or in a language approved by the competent authorities of that Member State; by the UCITS itself or a third party subject to regulation and supervision governing the tasks to be performed, or both, including by the use of electronic means. Withdrawal of notifications related to the use of the marketing passport : the competent authorities of the UCITS home Member State shall ensure that UCITS may proceed to the denotification of the marketing activities of its units in a Member State where it has notified its activities, where all the following conditions are fulfilled. The notice to investors shall make clear the consequences for investors if they do not accept the offer to repurchase their units. The information shall be provided in the official language or one of the official languages of the Member State where the UCITS has been marketed or in a language approved by the competent authorities of that Member State. As long as investors remain invested in the UCITS after marketing is discontinued, the UCITS shall provide investors who remain invested in the UCITS as well as the competent authorities of the home Member State of the UCITS and the competent authorities of the Member State where the marketing has been discontinued with the information required under the Directive. In addition, the competent authorities of the Member State where the marketing has been discontinued shall exercise the rights and obligations conferred on competent authorities of the UCITS host Member State, in accordance with the Directive. Conditions for pre-marketing in the Union by an EU-based AIFM : in order to ensure that national competent authorities can exercise their control over pre-marketing activities in their Member States, Parliament specified that AIFMs shall send an informal letter or e-mail to the competent authorities of their home Member State and the competent authorities of the Member State or Member States where they will engage in pre-marketing activities, mentioning in which Member State or Member States they will conduct pre-marketing activities. AIFMs shall ensure that their pre-marketing activities are appropriately documented and made available, upon request, to the national competent authorities concerned. Such information should include a reference to the Member States and the period of time in which the pre-marketing activities took place and a description of the investment strategies or investment ideas presented in the course of the pre-marketing activities. Evaluation : the Commission shall submit a legislative proposal to the European Parliament and the Council in order to harmonise the provisions applicable to UCITS management companies testing the appetite of professional investors for a particular investment idea or investment strategy. Before the entry into force of certain provisions of Directive 2011/61/EU, the Commission shall submit a report to the European Parliament and the Council, and if appropriate, legislative proposals after an examination of the application of all the provisions of Directive 2011/61/EU in the context of their application in the scenario of a passporting regime being in place for non-EU AIFMs.
  • date: 2019-03-04T00:00:00 type: Approval in committee of the text agreed at 1st reading interinstitutional negotiations body: EP docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/inag/2019/02-27/ECON_AG(2019)636220_EN.docx title: PE636.220 url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/02-27/ECON_LA(2019)001852_EN.pdf title: GEDA/A/(2019)001852
  • date: 2019-04-15T00:00:00 type: Debate in Parliament body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20190415&type=CRE title: Debate in Parliament
  • date: 2019-04-16T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2019-0367 title: T8-0367/2019 summary: The European Parliament adopted by 526 votes to 98, with 26 abstentions, a legislative resolution on the proposal for a directive of the European Parliament and of the Council amending Directive 2009/65/EC of the European Parliament and of the Council and Directive 2011/61/EU of the European Parliament and of the Council with regard to cross-border distribution of collective investment funds. This proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper. The European Parliament's position adopted at first reading under the ordinary legislative procedure amended the Commission's proposal as follows. Support for local investors (facilities) The amended Directive establishes rules to modernise and specify the requirements for providing facilities to retail investors. Under the amended text, Member States shall ensure that the UCITS management company offers, in each Member State where it intends to market units of a UCITS, facilities to perform the following tasks: process subscription; repurchase and redemption orders and make other payments to unit-holders relating to the units of the UCITS; provide investors with information on how orders can be made and how repurchase and redemption proceeds are paid; make the information and documents required available to investors and act as a contact point for communicating with the competent authorities. The UCITS shall ensure that the facilities to perform the tasks are provided: - in the official language or one of the official languages of the Member State where the UCITS is marketed or in a language approved by the competent authorities of that Member State; - by the UCITS itself or a third party subject to regulation and supervision governing the tasks to be performed, or both, including by the use of electronic means. Notification If a UCITS proposes to market its units in a Member State other than its home Member State, it will have to send a notification letter in advance to the competent authorities of its home Member State. The notification letter shall also include the details necessary, including the address, for the invoicing or for the communication of any applicable regulatory fees or charges by the competent authorities of the host Member State and information on the facilities for performing the tasks. Withdrawal of notifications related to the use of the marketing passport The competent authorities of the UCITS home Member State shall ensure that UCITS may proceed to the denotification of the marketing activities of its units in a Member State where it has notified its activities, where all the following conditions are fulfilled. The notice to investors shall make clear the consequences for investors if they do not accept the offer to repurchase their units. The information shall be provided in the official language or one of the official languages of the Member State where the UCITS has been marketed or in a language approved by the competent authorities of that Member State. As long as investors remain invested in the UCITS after marketing is discontinued, the UCITS shall provide investors who remain invested in the UCITS as well as the competent authorities of the home Member State of the UCITS and the competent authorities of the Member State where the marketing has been discontinued with the information required under the Directive. In addition, the competent authorities of the Member State where the marketing has been discontinued shall exercise the rights and obligations conferred on competent authorities of the UCITS host Member State, in accordance with the Directive. Conditions for pre-marketing in the Union by an EU-based AIFM For pre-marketing to be recognised as such under Directive 2011/61/EU, it should be addressed to potential professional investors and concern an investment idea or investment strategy in order to test their interest in an alternative investment fund (AIF). In order to ensure that national competent authorities can exercise their control over pre-marketing activities in their Member States, an EU AIFM should send, within two weeks of having begun pre-marketing, an informal letter, in paper form or by electronic means, to the competent authorities of its home Member State, specifying inter alia in which Member States it is or has engaged in pre-marketing, the periods during which the pre-marketing is taking or has taken place and including, where relevant, a list of its AIFs and compartments of AIFs which are or were the subject of pre-marketing. The competent authorities of the home Member State of the EU AIFM should promptly inform the competent authorities of the Member States in which the EU AIFM is or has engaged in pre-marketing thereof. EU AIFMs shall ensure that their pre-marketing is adequately documented. Harmonised rules on pre-marketing, should not in any way disadvantage EU AIFMs vis-à-vis non-EU AIFMs. Review By two years after the date of entry into force of this Directive, the Commission shall present a report assessing, inter alia, the merits of harmonising the provisions applicable to UCITS management companies testing investor appetite for a particular investment idea or investment strategy, and whether any amendments to Directive 2009/65/EC are needed to that end.
  • date: 2019-06-14T00:00:00 type: Act adopted by Council after Parliament's 1st reading body: EP/CSL
  • date: 2019-06-20T00:00:00 type: Final act signed body: CSL
  • date: 2019-06-20T00:00:00 type: End of procedure in Parliament body: EP
links/Research document
title
Briefing
url
http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)625106
other
  • body: EC dg: url: http://ec.europa.eu/info/departments/financial-stability-financial-services-and-capital-markets-union_en title: Financial Stability, Financial Services and Capital Markets Union commissioner: KATAINEN Jyrki
otherinst
  • name: European Economic and Social Committee
procedure/Mandatory consultation of other institutions
European Economic and Social Committee
procedure/Modified legal basis
Rules of Procedure EP 159
procedure/Notes
  • 12/12/2018 Decision to enter into interinstitutional negotiations confirmed by plenary (Rule 69c)
procedure/dossier_of_the_committee
Old
ECON/8/12525
New
  • ECON/8/12525
procedure/instrument
Old
Directive
New
  • Directive
  • Amending Directive 2009/65/EC 2008/0153(COD) Amending Directive 2011/61/EU 2009/0064(COD) See also 2018/0045(COD)
procedure/other_consulted_institutions
European Economic and Social Committee
procedure/stage_reached
Old
Awaiting committee decision
New
Procedure completed, awaiting publication in Official Journal
procedure/subject
Old
  • 2.50 Free movement of capital
  • 2.50.03 Securities and financial markets, stock exchange, CIUTS, investments
  • 3.45.01 Company law
New
2.50
Free movement of capital
2.50.03
Securities and financial markets, stock exchange, CIUTS, investments
3.45.01
Company law
procedure/summary
  • Amending Directive 2009/65/EC
  • Amending Directive 2011/61/EU
  • See also
activities/0/docs/0/text
  • PURPOSE: to reduce regulatory barriers to the cross-border distribution of investment funds in the EU.

    PROPOSED ACT: Directive of the European Parliament and of the Council.

    ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

    BACKGROUND: this proposal should be seen in the broader context of the Capital Markets Union (CMU) action plan and the CMU Mid-Term Review, to establish a genuine internal capital market by addressing fragmentation in the capital markets, removing regulatory barriers to the financing of the economy and increasing the supply of capital to businesses.

    Investment funds are investment products created with the sole purpose of pooling investors’ capital, and investing that capital collectively through a portfolio of financial instruments such as stocks, bonds and other securities. In the EU, investment funds can be categorised as undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs) managed by alternative investment fund managers (AIFMs).

    While EU investment funds have seen rapid growth, with a total of EUR 14 310 billion in assets under management in June 2017, the EU investment fund market is still predominantly organised as a national market:

    • 70 % of all assets under management are held by investment funds authorised or registered for distribution only in their domestic market;
    • only 37 % of UCITS and about 3 % of AIFs are registered for distribution in more than three Member States.

    Regulatory barriers, namely Member States’ marketing requirements, regulatory fees and administrative and notification requirements represent a significant disincentive to the cross-border distribution of funds. These barriers were identified in response to the Green Paper on Capital Markets Union.

    These new measures are expected to reduce the cost of going cross-border and should support a more integrated single market for investment funds. They should, in turn, should reduce market fragmentation, increase competition, and ultimately help to deliver greater choice and better value for investors in the EU.

    This proposal is presented together with a proposed dedicated Regulation on facilitating cross-border distribution of collective investment funds and amending Regulations (EU) No 345/2013 and (EU) No 346/2013.

    IMPACT ASSESSMENT: following the evaluation of the strategic options being considered, the policy choices are as follows:

    • more transparent national marketing requirements at both national and EU level, harmonisation of the definition of pre-marketing in Directive 2011/61/EU and clearer guidance on the process of checking marketing material;
    • greater transparency of regulatory fees at EU level, and the establishment of key principles to ensure greater consistency in the way these fees are determined;
    • the choice of facilities to support local investors should be left to  investment fund managers, with safeguards for investors;
    • increased harmonisation of procedures and conditions for updating or withdrawing notifications on the use of the marketing passport.

    CONTENT: this proposal amends certain provisions of Directive 2009/65/EC and Directive 2011/61/EU to remove the current regulatory barriers to the cross-border distribution of investment funds in order to make their cross-border distribution simpler, faster and cheaper.

    Its main elements are:

    Support for local investors (facilities): the proposal sets out rules to modernise and specify the requirements for providing facilities to retail investors, a physical presence should not be required by Member States. While requiring that facilities are established in each Member State where marketing activities are carried out and which serve situations such as making subscriptions, making payments or repurchasing or redeeming units, this proposal allows fund managers to use electronic or other means of distance communication with investors. The information and means of communication should be available to investors in the official languages of the Member State where the investor is located.

    The requirements relating to facilities are also applied to AIFMs where Member States allow them to market units or shares of AIFs to retail investors in their territories.

    De-notification of the use of the marketing passport: the proposed Directive harmonises the conditions under which investment funds may exit a national market. It creates the possibility for asset managers to stop marketing an investment fund in defined cases in one or several host Member States.

    Asset managers are allowed to de-notify the marketing of their UCITS only if a maximum of 10 investors who hold up to 1 % of assets under management of this UCITS have invested in this UCITS in an identified Member State. The competent authorities of the home Member State of this UCITS will verify the compliance with this requirement, including the transparency and publication requirement for investors and the repurchase offer.

    All obligations to inform will continue to apply to remaining investors after de-notification of the marketing activities in a Member State.

    Pre-marketing: the proposal also allows European asset managers to engage in pre-market activities to test an investment idea or an investment strategy with professional investors.

    Therefore, this proposal lays down clear conditions, including thresholds, under which deregistration could take place. The thresholds are indicative of when a fund manager may consider that its activities have become insignificant in a particular host Member State.

activities/1
date
2018-04-16T00:00:00
body
EP
type
Committee referral announced in Parliament, 1st reading/single reading
committees
committees/0/date
2018-05-31T00:00:00
committees/0/rapporteur
  • group: ALDE name: KLINZ Wolf
committees/0/shadows
  • group: EPP name: LAMASSOURE Alain
  • group: S&D name: DELVAUX Mady
  • group: ECR name: KAMALL Syed
  • group: GUE/NGL name: CARTHY Matt
procedure/Mandatory consultation of other institutions
European Economic and Social Committee
procedure/dossier_of_the_committee
ECON/8/12525
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision
activities/0/commission/0
DG
Commissioner
KATAINEN Jyrki
other/0
body
EC
dg
commissioner
KATAINEN Jyrki
activities
  • date: 2018-03-12T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0092/COM_COM(2018)0092_EN.pdf title: COM(2018)0092 type: Legislative proposal published celexid: CELEX:52018PC0092:EN body: EC type: Legislative proposal published commission:
committees
  • body: EP responsible: True committee_full: Economic and Monetary Affairs committee: ECON
  • body: EP responsible: False committee_full: Legal Affairs committee: JURI
links
other
    procedure
    reference
    2018/0041(COD)
    subtype
    Legislation
    legal_basis
    Treaty on the Functioning of the EU TFEU 053-p1
    stage_reached
    Preparatory phase in Parliament
    summary
    instrument
    Directive
    title
    Cross-border distribution of collective investment funds: pre-marketing and de-notification
    type
    COD - Ordinary legislative procedure (ex-codecision procedure)
    subject