Review of the European Long-Term Investment Funds (ELTIFs) Regulation

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Stellungnahme des Ausschusses: Review of the European Long-Term Investment Funds (ELTIFs) Regulation

Key points:

The EESC

  • strongly supports the proposed balanced review of the ELTIF Regulation, as its previous format did not achieve its well-intended goals;
  • considers that "ELTIF 2" is a timely and relevant proposal to shift investments and savings into the long-term, necessary for a socially inclusive post-COVID recovery. The EESC hopes that no new regulatory requirements are added during the legislative process, as this would weaken the drive towards simplicity rightly proposed by the European Commission;
  • strongly emphasises the importance of funding the twin digital and climate transitions towards an ultimately carbon neutral European economy. It will also make it necessary to increase the accessibility of Economic, Social, Governance (ESG) and financial data, particularly through the European Single Access Point (ESAP) project and the needed but yet to be proposed regulation and supervision of data providers;
  • welcomes the targeted improvements in eligible assets contained in the European Commission's "ELTIFs 2" proposal. This will enlarge the investment universe of ELTIFs and support economic growth and competitiveness. It will also allow ELTIFs to cover a larger geographical scope of investments within Europe;
  • supports the adaptation of previous dissuasive barriers to accessing ELTIFs for retail investors, who currently cannot benefit from the returns on long-term investments, especially considering that investor protection is strengthened by the mandatory "suitability assessments" under the Market in Financial Instruments Directive (MiFID II). The EESC also reiterates its previous calls for developing investor education in Europe;
  • would be open to "partially open-ended" ELTIFs. To increase their liquidity, they should be able to invest up to 50%, or even more, in diversified assets respecting UCITS rules. Further increase in investment limits in other funds would help significantly;
  • considers that the European Commission should assess the merit and feasibility of permitting ELTIFs to use a ".eu" International Securities Identification Number (ISIN) code, improving their availability and visibility across borders. A stronger role for ESMA in adopting regulatory technical standards (RTSs), promoting supervisory convergence and coordinating the supervisory work, alongside active national regulators, is welcome;
  • stresses the importance of facilitating the eligibility of ELTIFs for saving accounts, for unit-linked life insurance contracts, for employee savings schemes and, for retirement mechanisms such as the Pan European Pension Product. The proposal for a recast of the Solvency 2 Directive and the future revision of the IORP directive could include an incentive for insurance and pensions undertakings to invest in ELTIFs;
  • urges that the European investors in ELTIFs are able to benefit from the "best tax treatment" on their savings granted by their country of residence, and from stable and incentivising tax rules.