MFA submitted a letter calling on the European Commission (EC) to better integrate EU capital markets. The letter describes how duplicative reporting, inconsistent member state rules, and disproportionate regulatory burdens have prevented EU capital markets from fully harmonising. MFA’s proposed reforms would improve regulatory alignment both across member states and with other key jurisdictions, enhance capital formation, and support a more globally competitive EU financial system.
MFA’s specific recommendations are to:
- Tailor regulations based on fund size to reduce barriers and support the growth of smaller AIFMs
- Align short sale and derivatives reporting rules more closely with the UK and U.S. to reduce fragmentation and compliance costs
- Harmonise AIFM rules across member states and allow greater reliance on home-country authorisations, including for U.S. and UK AIFMs
- Return Annex IV reporting to its original purpose of monitoring for systemic risk, and coordinate revisions with changes to Form PF in the U.S.
- Promote innovation in emerging technologies like tokenisation and distributed ledger technology to modernise EU markets
- Clarify how EU marketing rules apply to non-EU fund managers to improve cross-border capital flows
- Focus supervisory oversight on higher-risk activities
