The European Central Bank (ECB) issued its comments on the Commission’s Green Paper on
the enhancement of the EU framework for investment funds published on 12 July 2005
The ECB notes that in the case of the UCITS Directive the limited scope for comitology represents a major constraint on the effectiveness of the Lamfalussy approach and on the possibility of adapting the legislative framework to new developments. Therefore, the Commission may wish to consider the introduction of a wider application of the Lamfalussy approach within the UCITS Directive at the earliest possible opportunity.
In the longer term, the current ‘product-based’ approach of the UCITS Directive may be considered as limiting the ability of the EU harmonised framework to exploit financial innovation.8 Should all the stakeholders agree on the need for a new approach, the Commission may consider recasting the UCITS Directive along the lines of the model already adopted for the securities directives.
The Eurosystem agrees that some areas would benefit from further clarification, in particular, it is noted that the Market in Financial Instruments Directive (MiFID) would introduce a new harmonised framework for conduct of business rules for financial intermediaries, which will be applicable to management companies only to a limited extent for the management of investment portfolios.
By contrast, UCITS and their managers are subject only to the general principles laid down by the UCITS Directive, to be further specified at national level. Therefore, the Commission could consider whether and to what extent harmonised conduct of business rules, similar to those provided for investment firms and credit institutions, should be provided for UCITS, whilst allowing for some degree of flexibility necessary to deal with national specificities.
The ECB is developing harmonised and comprehensive statistics about investment funds which may be helpful also to the Commission in its further work. In addition, the ECB recalls that it provided its advice to the Council as regards amendments to the UCITS Directive, and stands ready to provide it on any future legislative initiative in the field.
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