Commission launches consultation on cross-border investment funds

The Commission services are today launching a public consultation to see how to strengthen the single market passport for cross-border investment funds. Cross-border investment funds have an important role to play in building the Capital Markets Union: they channel savings to companies and projects that are crucial to Europe’s economic recovery. Funds have greater potential to grow when they operate cross-border, and increased competition can also deliver better value, more choice and greater innovation for investors. The EU has a successful cross-border fund market and, underpinned by legislation such as UCITS, has grown to more than EUR 13 trillion. We want to look at ways to make the passport work even better, particularly for smaller funds. The consultation will seek feedback from the public, including fund managers, investors, consumer groups, as well as from those who market and sell these funds in order to gain a fuller picture of the remaining barriers to cross-border distribution. Jonathan Hill, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “One of the benefits of the Single Market is that investment funds should be able to do business easily across borders. But at the moment, smaller fund managers are telling us they face challenges when trying to sell their products in different countries. So I want to use this consultation to flush out what the main barriers are to funds operating across borders, so that we can work out how best to overcome them. I want the passport for fund managers to works as well as possible so that we can build a system where investors have more choice and better value, and where investment funds can do business more easily.” These barriers could include the impact of marketing rules, administrative arrangements imposed by host countries, regulatory fees and notification rules. The public consultation is open from 2 June 2016 to 2 October 2016.