EUROPE – MEPs are calling for European Union member states to permit the transfer of pension fund asset management to be transferred to other undertakings.

They are calling on the countries “in accordance with the pension fund directive, to permit the full or partial transfer of the asset management function of pension funds to other undertakings”.

The comments come in a draft motion for a Parliamentary resolution in response to the European Commission’s Green Paper on asset management. It was drawn up by German MEP Wolf Klinz of the European Parliament’s Committee on Economic and Monetary Affairs.

The report acknowledges that asset management – which in this context means UCITS investment funds – is “an appropriate and promising instrument for ensuring sustainable retirement provision”.

But there were discrepancies between the UCITS and MiFID directives which left “scope for interpretation and requires clarification and consolidation”.

He pointed to regulatory inconsistencies between UCITS and other investment products, and called on the Commission and the Committee of European Securities Regulators and the Committee of European Insurance and Occupational Pensions Supervisors to “ensure comparable transparency requirements, notification requirements and equal treatment of competing products”.

Investor protection and product diversity had “not yet all been achieved to a satisfactory level”.

The report says the number and size of European funds is “sub-optimal” – and that greater consolidation “would bring lower costs and/or higher net returns”.

Investments available for UCITS should be extended to include listed real estate investment trusts, private equity and funds of hedge funds. The draft also highlights “regulatory arbitrage” between jurisdictions.

As the UCITS directive was not included in the Lamfalussy process, there is no specific committee on asset management at the implementation or regulatory convergence levels.

The deadline for MEPs to table amendments to the draft is February 1.