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European Commission plans effort to promote cross-border debt funds

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European Commission plans effort to promote cross-border debt funds

The European Commission is embarking on an effort to encourage cross-border investments in alternative investment funds, or AIFs, throughout Europe with the help of its Capital Markets Union program to support small and medium-sized enterprises, Reuters reported.

The program is designed to offer greater clarity on specific national requirements and associated costs along with a harmonized definition of "pre-marketing." The commission is also working to reduce legal costs and deal with regulatory issues faced by fund operators across the Continent. The new proposals are expected to cut costs by between €306 million and €440 million annually.

Typically, AIFs are traded domestically, with only 3% promoted in more than three member European states. These moves can be promoted through Europe by acquiring passport rights under the EU's Alternative Investment Fund Managers Directive. Out of the €14.8 trillion investment fund market in Europe, 70% is registered for domestic sale only, Reuters noted, citing data from the European Fund and Asset Management Association.