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Draft directive on cross-border distribution of investment funds

18/05/2018

In the framework of implementation of the Capital Markets Union and in order to facilitate cross-border distribution of funds, the European Commission presented a draft directive on 12 March 2018 amending the AIFM and UCITS directives and a draft regulation amending the EuVECA and EuSEF regulations.

In the framework of implementation of the Capital Markets Union and in order to facilitate cross-border distribution of funds, the European Commission presented a draft directive on 12 March 2018 amending the AIFM and UCITS directives and a draft regulation amending the EuVECA and EuSEF regulations. The Commission’s aim is to reduce regulatory obstacles regarding cross-border distribution of investment funds. More precisely:

- The regulation seeks to improve transparency by harmonising national requirements regarding sales and regulatory fees. It ensures that the way in which these regulatory fees are established is more uniform. It also harmonises the procedure and requirements of national competent authorities when verifying commercial documentation. It allows ESMA to better monitor investment funds.

- The directive proposes to harmonise conditions under which an investment fund may be withdrawn from a national market. It also allows European asset managers to carry out pre-trade activities to assess interest levels among potential professional investors for new investment strategies. Furthermore, it prohibits Member State regulations requiring the establishment of a local presence to handle subscriptions/repurchases of funds to instead favour a harmonised handling process for these requests.

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