By Liam Edwards
On 19 October, the Council of the EU announced that a provisional political agreement had been reached with the European Parliament on amendments to the Regulation on European long-term investment funds (ELTIF) ((EU) 2015/760) (COM(2021)722). The press release outlining this development is available in full here.
The ELTIF framework dictates eligibility of assets and investments, and outlines rules on diversification, portfolio composition, leverage limits, and marketing. ELTIFs are intended to facilitate long-term investments and are capable of being distributed across borders to both retail and institutional investors, although have seen limited success since their launch in 2015. In order to overcome existing supply-side and demand-side limitations, the Council of the EU has proposed a range of amendments, which include changes to the scope of eligible assets and investments and the current rules on portfolio composition and diversification.
Zbyněk Stanjura, Minister of Finance of Czechia, said the following:
Together with the European Parliament we have decided to make European long-term investment funds more attractive and easier to invest in. This category of funds is at present largely unknown due to obstacles in its regulatory framework which we have today agreed to remove. One of the key priorities for the Council is now reflected in the text: a redesign of the ELTIF framework which will allow us to channel more financing to SMEs and long-term projects which will help achieve the digital transition.
The finalised text of the amendment is expected to be submitted to the Council and European Parliament for adoption following technical and legal revision.
For further UK financial services regulatory updates, please visit the Burges Salmon blog.