In last month’s Funds ezine we reported that the Council of the EU agreed its general approach on the proposed European Long-term Investment Funds Regulation (ELTIF Regulation) on 25 June 2014. On 27 June 2014, the Council published joint statements (issued by different groups of Member States) expressing concerns about the Presidency’s general approach.

Minimum investment requirement

The UK and Estonia have expressed concern over the requirement for retail investors to commit to a minimum investment of €10,000 which, they argue, undermines the original policy intention of creating an EU regime suitable for retail investors, and could severely restrict uptake of the ELTIF.

They believe that a minimum subscription requirement is a poor method of determining the appropriateness of a product for an investor. Their view is that basing appropriateness on an advised sale process would better meet the ELTIF Regulation’s policy aim and also provide more robust protection for European consumers.

Marketing requirements

In their joint statement, Austria, Belgium, Portugal and France claim that a more appropriate balance on the additional requirements for marketing to retail investors should have been reached.

Next steps

The Member States concerned will seek to have these issues taken into account by the Italian Presidency in its upcoming trilogue negotiations with the Parliament on the proposed Regulation.

Contributed by Niall Crowley