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Concerns over the Commission’s proposal on investment funds that risks creating additional barriers rather than facilitating cross border fund distribution
The European Commission is proposing legislation to tackle the remaining barriers to the cross-border distribution of collective investment funds within Europe. A comprehensive package of measures includes strengthened protections for investors, with controls on pre-marketing and the discontinuation of activities in a member state, the fairness and clarity of marketing communications and the full disclosure of the fees that will be charged. For the funds industry, there is the requirement that national regulators should levy charges that are proportionate to the costs incurred in registration, investigation and supervision. The European Fund and Asset Management Association (EFAMA) welcomes the Commission’s commitment to deepening the Single Market for investment funds. EFAMA has long argued that there is significant room for improvement in terms of overcoming the obstacles to cross-border activity. EFAMA, however, questions whether new legislation, creating new regulations, is likely to prove the most effective tool in this regard. Asset managers and their clients have identified lack of clarity and transparency concerning the existing rules as the main barrier to cross-border activity. It is difficult to see how adding another layer of regulation will improve matters rather than, as seems more likely, add to the existing burden for asset managers. This paper would urge, first, practical steps to reducing these obstacles and the proper enforcement of existing rules, with new legislation as a last resort.
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Agathi Pafili is a Senior Policy Adviser in the European Fund and Asset Management Association (EFAMA). She joined EFAMA in September 2012 and is currently a member of the regulatory affairs team and the public policy affairs team. She is based in Brussels and is in charge of the EU and international regulatory landscape for the asset management industry, with a focus on alternative and long-term investment funds, benchmarks and financial indices, antimoney laundering policies and the use of credit ratings. She is also a member of the board of the European Money Markets Institute (EMMI) and a member of the Working Group on Euro Risk-Free Rates (EUR RFR WG). Prior to joining EFAMA, Ms Pafili worked in the European Parliament as a member of the vice president’s cabinet, dealing with the Economic and Monetary Affairs Committee’s (ECON) legislative work on financial services and monetary policy. From 2004 to 2009, Ms Pafili worked in the European Parliament as an accredited assistant in the ECON Committee and in the cabinet of the Chair of the Culture and Educations Affairs Committee. Ms Pafili graduated from the Law School of National and Kapodistrian University of Athens with a master’s degree in international and European law. She started her career in 2002 as a trainee lawyer in the Commercial Bank of Greece. She is currently member of the Athens Bar Association.