AMIC warns on regulatory threats to fund delegation

The Asset Management and Investors Council published a statement on fund delegation, underlining its importance to the asset management business model and the threat from recent legislative proposals. AMIC is the “buy side voice” of the International Capital Market Association (ICMA).

Delegation is one of the key pillars supporting the EU’s cross-border investment model which has made UCITS, and increasingly AIFs, a global brand and a European success story. The European Commission’s proposal to review the European Supervisory Authorities gives the European Securities and Markets Authority the power to issue opinions on existing and future delegation arrangements. AMIC believes this proposal could threaten the success of the European asset management business.

AMIC has also issued a position paper on the on-going review of the European Systemic Risk Board (ESRB), stating that in light of the recent Recommendation on liquidity and leverage risks in investment funds (ESRB/2017/6). ESRB’s governance could be improved. AMIC believes that the lack of public consultation, the intrusion by macro-risk supervision into the field of micro-regulation, and the unbalanced composition of the board of the ESRB justifies that the ESRB review includes an improvement of the functioning and composition of the ESRB. AMIC lays out two targeted changes to the ESRB review proposal to balance the composition of the ESRB to ensure greater representation from securities markets and to ensure consultation with industry takes place where legislative change is recommended.

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