OPINION OF THE EUROPEAN CENTRAL BANK on a proposal for a Directive
of the European Parliament and of the Council on Alternative Investment Fund Managers
and amending Directives 2004/39/EC and 2009/…/EC.
The ECB supports the intention to provide
a harmonised regulatory and supervisory framework for the activities of
alternative investment fund managers (AIFMs) in the European Union. It urges
the Commission of the European Communities to continue the dialogue with its
international partners, in particular the United States, to ensure a globally
coherent regulatory and supervisory framework.
The ECB makes the following remarks:
- all central banks should be expressly
excluded from the scope of the proposed directive;
- except for the AIFM’s management of its
own assets, requirements under the proposed directive should be
coherently applied to AIFMs, credit institutions and insurance
companies;
- the proposed directive does not specify
‘fit and proper’ criteria and minimum experience requirements for an
AIFM’s senior managers and executives. For level playing field reasons,
the ECB suggests inserting provisions to this effect in the proposed
directive;
- certain provisions in the proposed
directive (for example, those related to short selling, securitisation
and the acquisition of a controlling influence in companies) are
intended to regulate horizontal issues that concern all market participants,
and not just AIFMs. The ECB would suggest considering instead
introducing such provisions only by means of legislation that maintains
the level playing field among various market participants, for instance
by inserting such provisions in existing EU legislation applicable
across sectors;
- the ECB suggests that an in-depth
analysis should be undertaken in order to focus reporting obligations on
data that can reasonably be expected to be relevant for monitoring
financial stability, to ensure the consistency of data reporting
obligations with the legal framework that will establish the European
Systemic Risk Board (ESRB) and the European System of Financial
Supervisors (ESFS), and to enable these bodies to obtain supervisory
information necessary and appropriate to fulfil their respective tasks.
While the focused reporting obligations that result from this analysis
should be reflected in the proposed directive, further specification
would also be possible through comitology;
- due consideration could also be given
to aligning certain requirements to report to the competent authorities
with those of Regulation ECB/2007/8 of 27 July 2007 concerning
statistics on the assets and liabilities of investment funds. Alignment
with these reporting requirements and the use of a standardised
reporting template for all AIFs covered by the proposed directive would
contribute to EU-wide systemic risk assessment;
- the definition of ‘leverage’ under the
proposed directive does not, however, include specific leverage ratio
concepts. The ECB is concerned that, without additional clarifications
inserted into the text of the proposed directive, it may be difficult to
implement the proposed definition. The ECB expects that the ESRB and the
ESFS will be consulted on implementing measures to be adopted in this
area, including on possible measures refining the concept of ‘leverage’;
- the ECB acknowledges that leverage can
create important risks for financial stability. Owing to their
investment flexibility, AIFMs can play an important role in supporting
financial market liquidity, thereby contributing to effective financial
market functioning and price discovery. Maintaining this role calls for
balanced and appropriately risk-adjusted leverage limits applicable to
AIFs that take their full risk profile into account while not
excessively hindering their investment flexibility.