On 7 March, AIMA and the ACC responded to the European Commission’s call for evidence on the Savings and Investments Union (SIU).

In its response, AIMA argued that the SIU has the potential to boost competitiveness and productivity in the EU economy and to support broader policy goals around innovation, the green and digital transitions, and defence investments.

It added that the EC should pursue a strategy for the SIU based on competitiveness, burden-reduction, simplification, and achieving a risk-based regulatory framework. The regulatory framework should be particularly revised around:

• Existing MiFID rules around distribution are not well designed to support the ability of retail investors to invest in private markets and long-term assets.  Rules around suitability and appropriateness should be simplified and broadly substituted with a strict and clearly delineated fiduciary duty for financial advisors and portfolio managers.  This approach would be more successful than the current approach towards the Retail Investment Strategy.

• The revision of the UCITS Eligible Assets Directive should be used to modernise the UCITS framework and facilitate the access of retail investors to private markets and long-term assets, for example by allowing UCITS funds to invest in ELTIFs.

• The ongoing work at various EU and global levels on the risks of Non-Bank Financial Intermediation (“NBFI”) is a source of uncertainty in the market, particularly coming so soon after the AIFMD review.

• The ongoing revision of the Securitisation Regulation is critical to the SIU project and is a prime example of an overly complex and burdensome regulatory framework. Overall, reviving the EU securitisation market would enhance access to capital in the EU.

The EC is expected to publish a strategy for the SIU on 19 March.

For further information, please contact Guillermo Pérez Molina, Private Credit Associate.