Achieving fit-for-purpose regulations will drive economic growth and support the EU Savings and Investments Union.
Brussels, Belgium — MFA encouraged the European Commission to enhance EU securitisation markets in a comment letter submitted today. The letter urges the EC to right-size the definition of securitisation, remove duplicative due diligence requirements, and align the securitisation framework with other jurisdictions. These enhancements will improve the attractiveness of EU securitisation markets to investors, including EU and global investment managers. The letter is in response to the European Commission’s Consultation on the Functioning of the EU Securitisation Framework, which seeks input on how to reinvigorate securitisation markets.
“Reforming the EU securitisation framework will enhance EU capital markets and drive economic growth and competitiveness throughout the continent,” said Bryan Corbett, MFA President and CEO. “A fresh regulatory approach that recognises internationally accepted standards, promotes harmonisation and cross-border activity, and removes duplicative, burdensome regulation will contribute to the development of the European Savings and Investments Union.”
In the letter, MFA advocates for reforms that improve the appeal and competitiveness of EU securitisation markets. This will enhance market participation and capital flows from both domestic and international investors, fully unlock the potential of the securitisation markets, stimulate EU economic growth, and contribute to the development of the EU Savings and Investments Union. Additionally, it offers the benefits of reducing risks on banks’ balance sheets, increasing the capital available to borrowers and for investments, and diversifying alternative investment fund investment portfolios.
Alternative investment funds (AIFs) are already robustly regulated under the Alternative Investment Fund Managers Directive (AIFMD). The current securitisation regulatory framework is not right sized and deters investment. Improving EU securitisation regulations will attract more AIFs and other market participants. AIF investment strategies generate steady returns for their beneficiaries, including pension funds.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of €5 trillion (Q3 2023). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.
About MFA
Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 member fund managers, including traditional hedge funds, credit funds, and crossover funds, that collectively manage over €3 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.
