For immediate release: Tuesday 26 April 2005

EFAMA and IMA launch European Fund Registration Report

The European Fund and Asset Management Association (EFAMA) and UK’s Investment Management Association (IMA) have today called for simplification of registration procedures for funds which market cross-border in Europe. 

In their report “A harmonised, simplified approach to UCITS registration”, they point out that since 1985 funds have had a “passport” to market throughout Europe, but burdensome “visa” requirements, which are different in each Member State, have developed over the years. These provide a significant barrier to a single European market, add to costs for investors and limit the choice available to them.

The direct costs of adhering to the different rules, estimated at some €25 million each year, on top of the initial registration costs of €20 million, are dwarfed by the indirect and opportunity costs faced by funds when operating on a cross-border basis. In comparison, the study concludes that the benefits, particularly in terms of investor protection, are limited.

The Committee for European Securities Regulators (CESR) has said that it intends to streamline fund registration and develop consistent standards for registration requirements. The report therefore makes a number of recommendations which can be developed without making any changes to the existing requirements of the UCITS directive. This should pave the wave to more radical reform when opportunities to review the text of the directive arise. 

The report calls on the regulators within CESR to agree that, when receiving an application to market a fund in a particular Member State, they will:

• Acknowledge the responsibility of the home regulator of the fund to ensure compliance with the directive and file the documentation required by the directive accepting the work undertaken by the home regulator;
• Not require information to be filed again where it is already available to them;
• Allow a fund to be marketed within one month of the information being filed;
• Limit translation requirements and streamline processes where a fund is making modifications to documentation;
• Streamline fee structures.

Sheila Nicoll, Deputy Chief Executive of the IMA commented:

“Markets have developed a lot since the directive was drawn up and regulators’ practices have diverged over the years. We are offering proposals which do not, at the initial stage, require legislative change and are entirely in line with recent calls from EU institutions to find ways of alleviating the burden of EU legislation on business”.

Steffen Matthias, Secretary General of EFAMA commented:

“So much can be done to remove barriers to cross-border business if the regulators show goodwill and cooperation and operate within the spirit of the directive. It is an excellent opportunity for CESR to show what can be done to create a level playing field across the investment fund business.”

A copy of “A harmonised, simplified approach to UCITS registration” is attached.

-Ends-

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
Steffen Matthias, Secretary General, EFAMA, +32 (0)2 513 39 69

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

Notes to Editors:
1. The Investment Management Association (IMA) is the trade body representing the UK asset management industry, representing £2 trillion funds under management and over 99% of the UK investment funds industry. For more information visit www.investmentuk.org

2. The European Fund and Asset Management Association (EFAMA) is the representative association for the European investment management industry. Formerly known as FEFSI, EFAMA, through its member associations in 19 EU member states, Liechtenstein, Norway, Switzerland and Turkey, represents approximately 43,000 investment funds with €5.3 trillion in net assets under management (as at Dec 04). For more information, visit www.efama.org