EUROPE - The Association Française de la Gestion Financière (AFG), the French asset management association, today said it is confident the European Commission will include full fund passports as an element of the fourth Undertakings in Collective Investments and Securities (UCITS) directive.

A spokeswoman for AFG told IPE today since only Luxembourg and Ireland oppose the implementation of so-called management company passports in the draft directive, AFG does not see why this element should be omitted when, for instance, a proper product passport is not.

In a statement released this morning, the organisation said it welcomed the EC's proposal to review the UCITS directive, but argued the management company passport is an "essential" measure and should be included in the next wave of reform.

"After technical examination by the Committee of European Securities Regulators (CESR), the Commission will put forward a proposal to include a "management company passport" in the draft directive," said AFG.

The passport is essentially designed to allow the centralised control of funds, so firms can create funds in another country without having to form a locally incorporate management company.

The European Fund and Asset Management Association (Efama) announced last week it welcomed the EC's declaration regarding the management company passport and the mandate to seek CESR for technical advice.

However, Efama is understood to be disappointed the commission has dropped the 'passport' approach.

IPE understands the EC has yet to crystalise the delivery of a practical solution to concerns regarding the management company passport and further work is therefore needed, though the Commission wanted to avoid further delays in the adoption of the proposal.

Yet the AFG believes the EC's desire to see proposals adopted by the European Parliament and the council before its term of office expires in spring 2009 could be achieved.

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