IMA calls for progress to be made on Cross-Border Mergers of Funds

IMA welcomes the announcement that agreement has been reached among European Union Member States on the proposed directive on the cross-border merger of companies within the EU, but stresses the need for progress on facilitating the cross-border mergers of collective investment schemes (UCITS¹). 

In 2003 IMA issued the report “Towards a single European market in asset management”, also known as the Heinemann report², in which barriers to cross-border mergers of funds were identified as one of the main impediments to creating a more efficient European market for asset management.

Whilst the proposed Directive will enable limited liability companies to merge more easily around Europe, UCITS have been excluded. Although IMA agrees that exclusion, at this stage, is appropriate due to the differing issues surrounding merging funds and “ordinary” companies, it urges the legislators to come forward as soon as possible with tailored provisions to facilitate the merger of UCITS. 

Sheila Nicoll, Deputy Chief Executive of the IMA commented:

“The Heinemann Report indicated that while European funds under management are half those in the US, there are three times as many funds in Europe as in the US. The inability to merge funds means that there are a huge number of small funds in existence, often with overlapping investment objectives. This prevents European funds, and more importantly investors, from benefiting from economies of scale. 

Going forward IMA will continue to be at the forefront of the push towards a more efficient single European market in asset management. “

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For further information, please contact:

Helen Stephenson, Communications Officer, IMA, +44(0)20 7831 0898

Sheila Nicoll, Deputy Chief Executive, IMA, +44(0)20 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, +44(0)7834 089332

Notes to Editors:

¹UCITS stands for Undertakings for collective investment in transferable securities and includes UK domiciled collective investment schemes (unit trusts and open-ended investment companies OEICs).

²IMA’s Heinemann report and its follow up report “Moving up a gear? A survey of the developments in the single market for asset management during 2003/04”- June 2004 are attached.

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