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Asset Management framework

Asset Management framework

Context

Asset management has a key role to play in the further development of capital markets in Europe due to the diversification features of investment funds and the easy access that they provide to professional portfolio management. EU investment funds are moreover supported by the UCITS and AIFMD frameworks which have become references at the global level in terms of transparency and investor protection.

A strong growth of the EU investment fund sector has been observed since the 2008 financial crisis and on-going trends such as an increasing adoption of ETFs and sustainable investment should drive further growth. However improvements are needed in terms of the competitiveness and the integration of the EU fund market that remains fragmented along national lines. In addition, although the sector has demonstrated resilience during the Covid crisis, liquidity risks remain a concern for certain categories of MMFs and certain open-ended funds such as those highly exposed to corporate debt and real estate assets.

The AIFMD directive has been amended to better integrate the EU Alternative Investment Funds (AIFs) market, improve investor protection, better monitor the risks to financial stability posed by AIFs and further align AIF and UCITS rules. The ELTIF framework has also been updated with the objective of making ELTIFs more attractive for retail investors and asset managers.

Concerning financial stability risks, a harmonisation of liquidity management tools (LMT) has been implemented in the context of the AIFMD review in order to facilitate the management of liquidity risks posed by open-ended AIFs. Different reforms of the MMF regulation are also being considered at the European and international levels.

Eurofi documents

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Regulatory Update

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Summary

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Views The Eurofi Magazine

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