Shearman & Sterling LLP | FinReg | European Commission Launches Consultation on European Long-Term Investment Funds Regulation
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  • European Commission Launches Consultation on European Long-Term Investment Funds Regulation

    The European Commission has launched a public consultation on possible improvements to the European Long-Term Investment Funds Regulation. The ELTIF Regulation has applied across the EU since December 2015 and is designed to encourage investment in long-term projects in the real economy, such as infrastructure projects, real estate and listed and unlisted small and medium-sized enterprises. However, only a small number of ELTIFs have been launched since the Regulation was introduced. In addition, in its 2020 report, the High Level Forum on the Capital Markets Union recommended that the ELTIF Regulation be reviewed in order to broaden the scope of eligible assets and reduce potential barriers to investment.

    The Commission published a roadmap on its upcoming consultation in September 2020, stating that the Commission's review should examine the following issues in order to contribute to the development of the ELTIF market:
    • Supply side issues e.g., eligible assets and investments and clarification of existing asset classes (such as "real assets"); and
    • Removing barriers to investment e.g., removal of national measures that might hinder ELTIFs, improving flexibility for early redemption by investors and encouraging participation from a wider range of investors.

    The Commission has now published a questionnaire seeking input from stakeholders including national regulators, the European Securities and Markets Authority, market participants (e.g., asset managers, investment firms, banks and stock exchanges) and institutional and retail investors. Responses to the consultation should be submitted by February 1, 2021.

    View the Commission's consultation.

    View the Commission's roadmap.

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    TOPIC: Funds