A new proposal to improve the ability of managers to operate

Invest Europe, the association representing Europe’s private equity, venture capital, and infrastructure fund managers as well as their investors, welcomes the European Commission’s publication of proposals to further integrate the European fund management sector.

The review released today is highly relevant to the European private equity community. It introduces targeted changes to the Alternative Investment Fund Management framework (AIFMD and accompanying legislation) – several of which have been long-standing requests from our industry.

From a private equity manager’s perspective, the proposed amendments are designed to facilitate marketing activities by improving national supervision and removing cross-border barriers. Key changes include:

Removal of the requirement to pre-notify the host Member State and a simplified reporting process for cross-border marketing
Limits on the ability of Member States to impose host regulatory fees
Harmonised and simplified processes for authorisation, marketing communications, and pre-marketing – reducing national divergences and “gold-plating”
Simplified de-notification rules, including removal of the pre-marketing ban for other funds managed by the same AIFM
Streamlined rules for third-party AIFMs
Amended depositary rules, ensuring that the light private equity regime becomes available across all Member States

In addition, the new framework introduces important changes to ESMA’s governance to increase its independence from NCAs, as well as a new concept of a “group” to facilitate delegation of activities within an entity. While very large asset managers (with more than €300 billion in AuM) will not be directly supervised by ESMA – a possibility considered earlier in the process – they will be subject to tailored supervisory mechanisms.

All these changes aim to make it easier for managers to operate. However, regulatory reviews can also introduce risks, as is shown by new proposals on fees to be paid to ESMA. Invest Europe will therefore continue to engage closely with EU and national policymakers, supported by its Committees and Working Groups, to ensure that the final outcome delivers the intended simplification. If you are an Invest Europe member, you can participate to these workstreams by contacting us at Publicaffairs@investeurope.eu.

Together with the recent reviews of the pension (IORP) and sustainability (SFDR) frameworks, this initiative underscores the European Commission’s commitment to easing operating conditions for managers as part of its ambitions to build a Savings & Investments Union. We now have to turn these objectives into regulatory reality.