The EU Regulation on long-term investment funds (ELTIF Regulation) was published in the Official Journal on 19 May 2015. The Regulation will enter into force on 8 June 2015 and will apply from 9 December 2015.

ELTIF objectives
ELTIFs are designed to boost non-bank investment in the real economy across Europe. They will help pension funds, insurance companies, professional and even retail investors (if they are willing to invest at least €10,000 for the long term, whether in one or more ELTIFs) to put money into projects in their own countries, elsewhere in the EU and outside it, provided that these benefit the EU economy.

Redemption
ELTIF investors will have to be ready and able to make a long term commitment, since they will not be able to withdraw their money easily. However, to protect retail investors in particular, the Parliament and the Council have agreed “redemption” rules that would enable an ELTIF which has enough liquid assets to return an investor’s money at the investor’s request.

The Parliament’s negotiators inserted provisions to ensure that long-term funds really do benefit the EU economy, that they are not invested in speculative assets and that any retail investors in them are properly informed and protected.

Contributed by Niall Crowley.