EU Priorities for Investment Funds

November 1, 2019 marked the inauguration of Ursula von der Leyen, the 13th president of the European Commission elected by the European Parliament. In the weeks preceding, Nicsa brought together a panel of global regulatory experts for a #WebinarWednesday event on the EU’s priorities for financial services.

Gerard Gilsenan, Senior Director, Regulatory and Investor Communications at FundAssist, moderated the discussion, which also featured experts from Fidelity International, and the Association of the Luxembourg Fund Industry (ALFI)


Aurélie Cassou, Senior Adviser of EU Affairs at the Association of the Luxembourg Fund Industry, said to expect a follow up to the original Capital Markets Union (CMU) action plan, which has been delayed due to Brexit. 

“Regulators, politicians, and stakeholders — for instance, the German and the French government as well as the European Fund and Asset Management Association — are pushing for a review of this CMU action plan,” she said. “We expect a new CMU action plan to be presented in May or June next year.” 

She also said that climate change, biodiversity, and pollution are top priorities for the new commission, which has appointed first executive vice president Frans Timmermans to lead Europe’s Green New Deal. 

“We are expecting a specific subset of this to be professional services, with a green finance action plan to be published in the next few months,” she said.


Dan Hedley, Head of European Regulatory Policy at Fidelity International, focused on two areas of reform that have been highlighted as key areas by the commission: digitalization and investor protection.

Digitalization. Hedley outlined three main areas of focus within this priority:

1) The move to digital formats. “The European Commission is finally waking up to the fact that product disclosure legislation shouldn’t be on paper anymore,” Hedley said. “We think that the commission is also waking up to the fact that there is less direct-to-customer interaction than they think — the point at which those pieces of paper are actually given to customers, directly by fund managers, are few and far between.”

2) Digital planning, advice, nudging, and financial wellness tools. Hedley said there are a number of advice gaps across the EU where a face-to-face approach has faded away. 

“We know that the European Commission is interested in understanding what tools already exist out there, what sorts of financial or robo advice exists, and whether they’re working well,” he said. “They are also looking at comparative tools, such as the FINRA fund analyzer in the States.”

3) Open banking. “The idea is for banks that have depositors who aren’t getting a great benefit from their deposit account to realize that there are alternatives out there — and to be tempted away from their existing bank by a disruptor bank,” Hedley said. “Asset managers can also take that data out of the banking world, and we can disrupt the banking sector by trying to get clients to move their money out of cash deposits and into on-risk assets in our funds.”

Investor Protection. Hedley said he is expecting a review of MiFID II, Europe’s distribution directive. “The commission is going to look at whether value for money disclosure is working for end customers,” he said. 


Antoine Kremer, Head of European Affairs at the Association of the Luxembourg Fund Industry, pointed to the implications of the UK’s decision to leave the EU in the light of Prime Minister Theresa May’s resignation and Boris Johnson’s inauguration. 

“The parliament has voted that Prime Minister Johnson is not allowed to take the UK out of the EU without a deal, meaning a no-deal Brexit,” he said. “Therefore, there’s quite some uncertainty as to whether the United Kingdom will be in or out of the EU on November 1.

Kremer said the outcome will have a significant impact on the financial services industry. “It will sweep over to all kinds of legislation, including the capital markets union and third-country-related issues like delegation of portfolio management, for example, to the United States or to possibly the United Kingdom.”

Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the Nicsa panel, they do not necessarily reflect the views of Nicsa or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.

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