EU finance ministers have agreed a negotiating position on measures intended to reduce barriers to cross-border investment and strengthen supervisory convergence, including changes affecting asset managers.
The Council’s position on the Market Integration and Supervision Package (MISP), a central component of the European Commission’s Savings and Investments Union (SIU) agenda, seeks to reduce regulatory fragmentation and compliance costs for financial firms operating across the EU.
For asset managers, the proposals include measures to simplify procedures for groups operating across multiple member states and a new depositary passport. This would allow investment funds to appoint a depositary in a different EU member state from the one in which they are established, potentially increasing competition and choice. Under the Council’s approach, however, the passport would be optional for member states.
The package also provides for asset management coordination colleges to promote greater consistency in supervision across the bloc.
The Investment Company Institute (ICI) welcomed the agreement, describing it as an important step towards a more integrated European market for investment funds.
“The Council’s text takes important steps to promote greater market integration and supervisory convergence while recognising the value of national supervisory expertise and established cross-border business models of the asset management industry,” said Tracey Wingate, ICI chief global affairs officer.
ICI said the legislation should promote competitiveness and investor choice while removing barriers that prevent investment funds from scaling and serving investors across the EU.
The Council’s position also envisages transferring supervision of the most significant cross-border trading venues and post-trading entities, including central securities depositories and central counterparties, from national authorities to the European Securities and Markets Authority (ESMA).
The package would establish a full-time ESMA executive board to manage operations and make entity-specific decisions concerning directly supervised operators, while retaining a separate board of supervisors for regulatory decisions, strategy, budget and supervisory convergence.
The measures form part of the EU’s broader effort to channel household savings into productive investment and make European capital markets more competitive. The Council has cited an estimated €10trn in household savings held in low-yield bank deposits across the bloc.
The Council’s negotiating position will be finalised ahead of formal adoption. Negotiations with the European Parliament can begin once the parliament has adopted its own position.
