EUROPE: EFAMA Memorandum on the EUSF (Depository)

Thursday May 24 2012

Funds-Axis would like to draw your attention to a recent European Fund and Asset Management Association (“EFAMA”) Memorandum relating to two proposed amendments in the draft report by Rapporteur Sophie Auconie on the proposal of the European Commission for a Regulation on European Social Entrepreneurship Funds.

EFAMA Memo on EUSF (Depository)

Amendment 4 (requirement of an authorisation for the managers) and Amendment 23 (requirement to appoint a depositary) are in the opinion of EFAMA crucial to the future success of the European Social Entrepreneurship Funds (“EUSF”).

EFAMA understands that it is the aim of the Commission to facilitate with this Proposal the means by which investment management products could intermediate capital from investors to social businesses.

In this context, it is difficult to strike the right balance between a flexible, light system on the one hand and the need to ensure quality of the EUSF and investor protection on the other hand.

A large majority of EFAMA members believe that sound fund and manager governance and the appointment of a depositary are key factors in order to protect investors and to create a strong and reliable new brand of European funds.

EFAMA Members will only be able to propose European Social Entrepreneurship Funds to their clients if these products are in the best interest of the clients and offer a sound investor protection.

Through Amendments 4 and 23 Rapporteur Auconie is enhancing investor protection and bringing an appropriate balance which was missing from the Commission’s initial proposal and which is highly welcomed by a large majority of EFAMA members.

If you wish to contact the author of this article to discuss the above, then please email info@funds-axis.com