CMU initiative

Through its CMU initiative, the Commission aims at unlocking long-term investment in Europe. One of the key components of this initiative is the removal of barriers to cross-border distribution of investment funds. The Luxembourg fund industry relies on cross-border distribution and has been a strong proponent of the Commission’s proposal.

ALFI has engaged in the Capital Markets Union initiative from the outset and has actively participated in the European Commission’s consultation process which started with a green paper in 2015. One of the most important consultations to which ALFI has responded in this context concerned the main barriers to cross-borders distribution of investment funds across the EU. In line with its mission, ALFI has worked to ensure that the needs and proposals of the Luxembourg fund industry are heard while investors remain protected at the highest level by taking an active part in the consultation process through its working groups since 2016 and continually following up on it.

In March 2018, the Commission published a proposal amending the UCITS and AIFM directives with the aim to remove the identified barriers to cross-border distribution of investment funds.

Following its detailed analysis of the proposal, ALFI suggested a broader scope and greater effectiveness of the marketing and pre-marketing concept beyond the AIFMD context. The proposal should also effectively ensure the simplification and harmonisation of fund deregistration processes in the Member States and the reduction of requirements for local agents and representatives to the necessary minimum. Investor protection should go hand in hand with encouraging the use of electronic means to achieve this goal.

The main objective of the ALFI proposals is to avoid or at least reduce unnecessary costs by streamlining practices and creating greater convergence in cross-border distribution across the EU.

Vilma Domenicucci
Senior Tax Advisor, ALFI