FEFSI chief warns of over-regulation

SWITZERLAND - The secretary general of the European Federation of Investment funds and Companies, or FEFSI, says the European funds market is moving towards “over regulation”.

Steffen Matthias told the IFM conference in Geneva that the EU’s ever-increasing regulations are proving a burden for the fund management industry, especially for small firms.

The industry should work together to “stop this tendency to over-regulate”, he said in his opening address.

He pointed out that the fund management market was subject to a number of authorities such as the European Commission, as well as finance ministers and CESR, the Committee of European Securities Regulators.

While on the international level he mentioned IOSCO and the OECD. Firms are also subject to national and international regulation but in the EU there was not yet a level playing field – “we are far from this,” he said.

“The real issue is that we want to create a European supermarket. Is full harmonization the issue? Some say yes, but others would say it is their absolute nightmare.”

Matthias cited the transparency directive as an example. “Now CESR has come up with a new idea: we have to employ someone whose job is only to make sure we are really independent. I think this is going too far.”

Matthias split regulation into three categories: expensive but necessary; cheap/expensive - but questionable benefit; meaningful but expensive in implementation.

Less burdensome regulation is top of the body’s agenda – but he added that self-regulation is not an option.

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