EU fund industry pushes for quick reforms[fr][de] 

With prospects also "uncertain" for 2008, the industry insists the European institutions must accelerate the planned overhaul of the sector.

In the last semester of 2007, harmonised European UCITS funds – which include all funds invested by householders, such as equity funds, bond funds, balanced funds and money market funds – registered an outflow of more than €100 billion. 

According to the figures released on 10 March by the European Fund and Asset Management Association (EFAMA), bond and equity funds were hit hardest, notably due to the volatility surrounding financial markets in the past months, which caused investors to give preference to lower-risk investments.

The sharp decline in these products in the last two quarters of 2007 was nevertheless balanced by high inflows registered by other financial products and by a positive first semester. Therefore, at the end of the year, the total net assets of UCITS funds had grown by 4.2%, totalling €170 billion in sales. But this remains low compared with €452 billion in 2006.

EFAMA insists the EU must act fast, in particular by increasing the transparency of other financial products, such as life insurance and structured notes, for which the return is linked to the performance of an underlying benchmark such as interest rates or equity markets.

The association called on the Commission to put forward its legislative proposals "by the end of April" and stated its support for the European financial passport, which its Director General Peter De Proft says "will not bring fundamental changes to the organisation of the industry".

However, the passport remains hotly disputed by member states that currently host the majority of the European funds, such as Luxembourg and Ireland.

Peter De Proft, Director General of EFAMA, the European Fund and Asset Management Association, urged a rapid introduction of new rules for the European fund market. "A further delay would be very bad for the industry," he said during a conference presenting the 2007 European investment fund results.

He called for "more transparency" and reiterated EFAMA's request to create "a level playing field for UCITS and similar investment products," such as life insurance.

Internal Market Commissioner Charlie McCreevy said at the launch of the public consultation in March 2007: "The UCITS Directive has served the European fund industry well. But the industry is faced with massive structural challenges – fragmentation, complex distribution channels, competition from new investment products". 

"The current Directive provides no answer to these challenges. That is why I have pushed hard to strengthen the Single Market framework for funds. This consultation marks the beginning of the delivery phase," he added.

The Alternative Investment Management Association (AIMA) insists that new regulation in the sector is not welcome (EurActiv 27/04/07).