Proposal for a Regulation amending Regulation (EU) 2015/760 as regards the scope of eligible assets and investments, the portfolio composition and diversification requirements, the borrowing of cash and other fund rules and as regards requirements pertaining to the authorisation, investment policies and operating conditions of European long-term investment funds

Author (Corporate)
Series Details COM (2021) 722
Publication Date 25/11/2021
Content Type ,

Summary:

Legislative initiative tabled by the European Commission on 25 November 2021, introducing amendments to Regulation (EU) 2015/760 as regards the scope of eligible assets and investments, the portfolio composition and diversification requirements, the borrowing of cash and other fund rules and as regards requirements pertaining to the authorisation, investment policies and operating conditions of European Long-Term Investment Funds (ELTIFs). This is a text with EEA relevance.

Further information:

European Long-Term Investment Funds (ELTIFs) invest on a long-term basis in infrastructure projects, real estate and SMEs, among others. Regulation (EU) 2015/760 sets out EU-wide rules for the authorisation, investment policies and operating conditions of ELTIFs.

Since the adoption of the original legal framework, only 57 ELTIFs were launched as of October 2021, with a relatively small amount of net assets under management. Such authorised ELTIFs are domiciled in only four Member States and the other Member States had no domestic ELTIFs. While the ELTIF is still a relatively new framework, the available market data indicates that the market’s development did not scaled up as expected, particularly given the Commission’s objective of promoting long-term finance in the European Union.

The proposed review of the rules aims to increase the attractiveness of ELTIFs for investors and their role as a complementary source of financing for EU companies. It also aims to make it easier for retail investors to invest in ELTIFs while ensuring strong investor protection. It was tabled by the European Commission on 25 November 2021 as part of a package of initiatives related to Capital Markets Union (CMU). The Council of the European Union adopted its general approach on 24 May 2022.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:722:FIN
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Commentary and Analysis
Ernst & Young: Luxembourg Market Pulse, 17/01/2022: What is the potential of the revised ELTIF regime? https://www.ey.com/en_lu/wealth-asset-management/luxembourg-market-pulse/what-is-the-potential-of-the-revised-eltif-regime-
European Fund and Asset Management Association (EFAMA): Newsroom, 25/02/2022: ELTIF review - What is needed to make ELTIF 2.0 successful? https://www.efama.org/newsroom/news/eltif-review-what-needed-make-eltif-2-0-successful
Allen & Overy: Publications, 10/03/2022: The Belgian “European Long-Term Investment Fund” (the ELTIF): A breakthrough? https://www.allenovery.com/en-gb/global/news-and-insights/publications/the-belgian-european-long-term-investment-fund-a-breakthrough
EPRS: Briefing, March 2022: Amending the European Long-Term Investment Funds (ELTIFs) Regulation https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)729320
Macfarlanes: In Depth, 01/04/2022: Could the ELTIF become more popular? https://www.macfarlanes.com/what-we-think/in-depth/2022/could-the-eltif-become-more-popular/

Official
EUR-LEX: SWD(2021)342: Staff Working Document accompanying the Proposal - Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:342:FIN
EUR-LEX: SWD(2021)343: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:343:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on Amendments to the European Long-Term Investment Funds (ELTIFs) Regulation (2021/0377(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0377(COD)
European Parliament: Legislative Train Schedule: Amendments to the European Long-Term Investment Funds (ELTIFs) Regulation https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-eltif-amendments
General Secretariat of the Council: Policies: Capital Markets Union https://www.consilium.europa.eu/en/policies/capital-markets-union/
European Commission: Press Release, 25/11/2021: Capital Markets Union: Commission proposes new measures to boost Europe's capital markets https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6251
Council of the European Union: Press Release, 24/05/2022: European long-term investment funds: Council adopts its position https://www.consilium.europa.eu/en/press/press-releases/2022/05/24/european-long-term-investment-funds-council-adopts-its-position/

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