Coordination of laws, regulations and administrative provisions (UCITS)

Key points:

This opinion follows on from the EESC's work on the regulation of rating agencies as part of efforts to address the crises of the last few years.

• The Committee welcomes the fact that the proposal tackles the problem of market participants' over-reliance on ratings for UCITS and AIF and attempts to prevent a herd mentality being triggered amongst financial players by inadequate ratings.
• The Committee considers that more efforts need to be made to develop procedures and yardsticks in risk management processes, which can be used as an alternative to ratings.
• The Committee would reiterate the scepticism it already expressed in its opinion of 12 March 2012 on rating agencies, to the effect that not even market participants' own risk assessment and less reliance on external rating agencies guarantees objectivity in the decisions made by financial market participants or the inclusion of all decisive aspects – in relation to the consequences of the assessment. Furthermore, it believes that one of the fundamental problems of risk assessment lies in the credibility (and independence) of the ratings issued by rating agencies.

Other EESC opinions:

• Green paper - Investment Funds (CESE 403/2006, INT/285)
• UCITS - management companies (CESE 190/1999, INT/016)
• UCITS (CESE 201/1999, INT/007)
• Alternative Investment Fund Managers (CESE 631/2010, INT/488)

For more information please contact the INT Section Secretariat