The European Parliament has reached political agreement with the Council of the EU on the proposed Regulation on European Long-Term Investment Funds (ELTIF Regulation).

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.

Next steps

The text agreed between the Parliament and the Council still needs to be endorsed by the Parliament’s Committee on Economic and Monetary Affairs, the full Parliament as well as the Member States.

Contributed by Niall Crowley